In 2007 and 2008, HMRC consulted with professional advisers with
particular expertise regarding the treatment of foreign nationals
coming to work in the UK and UK residents leaving the UK to work
abroad. Many of the advisers’ clients have complex
remuneration packages. Some are members of Long Term Incentive
Plans or participants in other deferred remuneration schemes. The
aim of the exercise was to establish principles for determining the
tax year that earnings, delivered by these arrangements, are
“for”.
The guidelines set out on the following pages were adopted
by HMRC with effect from 28 February 2008. They are intended to be
comprehensive but do not claim to cover every plan and set of
circumstances that will arise.
| EIM40011 | Approach to determining the year that earnings are “for” |
| EIM40012 | Annual bonuses awarded for meeting corporate, team or personal targets |
| EIM40013 | Bonuses and deferred remuneration plans – the effect of conditionality and employer’s discretion |
| EIM40014 | Long Term Incentive Plans and Deferred Remuneration |
| EIM40015 | The year that awards from Long Term Incentive Plans and other deferred remuneration arrangements are “for” |
| EIM40016 | Staged vesting |
The guidance sets out general principles and indicates the views HMRC is likely to take in specified circumstances. It is intended to aid and inform fact finding and decision making. It is not a substitute for obtaining all of the relevant information and exercising good judgment by applying the principles to the facts. This is not an easy task as you may be required to balance one set of conditions against others. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
HMRC published the following statement on 18 September 2008:
“For the avoidance of doubt HMRC was
able to confirm that where Tax Returns were submittedprior to 18 October 2007 on the basis of the
established HMRC position (which regardedconditionality as the determinant factor over
any specific performance period) they will notseek to challenge the Returns on that point.
Furthermore, if after 18 October 2007 anyindividual submitted a Tax Return for 2006/7
(or earlier) in accordance with the HMRCguidance given on 18 October 2007 HMRC will
not seek to challenge the Return on this point,but if the individual wishes to change the
basis and adopt the position clarified on 28 February2008 HMRC would not object to a taxpayer
amendment provided that this is made within theavailable window.”
