"...does not apply by reason of a relevant step taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons."
Thursday, April 7, 2011
MP's can still benefit from 'disguised remuneration' trusts
I was shocked to read a note in AccountancyAge online this morning claiming: "MPs excluded from tax avoidance legislation".
That would be outrageous. I've checked the Finance Bill in question and cannot find the words originally quoted in the article*. However what it does say is almost as bad.
We're talking here about the legislation to tax what is called 'disguised remuneration'. It often, but not always involves payments and loans to and from Employee Benefit Trusts (EBTs) and Employer Financed Retirement Benefit Schemes (EFRBS). I wrote about this last month:HMRC turn the Spotlight on the newest EBT related tax avoidance schemes.
The legislation appears in the Finance Bill 2011 and this also sets out various exemptions - intended, one assumes, to ensure that innocent transactions are not caught by widely drawn anti-avoidance powers. Amongst the exemptions is this one set out in Schedule 2 which introduces section 554(8). It says that the anti-avoidance legislation:
I do hope there is an innocent explanation for this exclusion. It would seem to have been a late addition to the Bill as it's not referenced in the explanatory notes to the Finance Bill. These only go as far as section 554(7).
Maybe someone (who?) wanted to avoid the possible complications that would ensue if the IPSA should ever decide to put trust arrangements in place and to lend MPs money re their expenses before they have been verified. Maybe. I still wonder who asked for the exemption to be drafted and why it was needed over and above all of the other exemptions that apply for everyone else. IF MP's are getting special treatment it would be outrageous - not for the first time of course.
*EDIT: Following my intervention AccountancyAge have revised the article to reflect the quoted words I referenced above.