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December 13, 2013
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EFRBS Settlement Opportunity for Employers

Users of EFRBS (Employer Financed Retirement Benefit Schemes) have until 31 December 2013 to notify HMRC if they wish to use the EFRBS Settlement Opportunity.

The settlement opportunity applies to contributions made by employers in the period 6 April 2006

If employers do take advantage of the settlement opportunity, the settlement should be concluded by 30 June 2014.

Under the EFRBS Settlement Opportunity there are two possible routes:

1.  No corporation tax deduction is claimed at the time of the contribution to the EFRBS by the employer.  The deduction will be available for the accounting period in which relevant benefits are paid to the employees.

2. Alternatively, if PAYE and NICs are now applied in a backdated fashion as at the date of the contribution to the EFRBS, then a corporation tax deduction will be allowed to the employer company at that time.

In exchange HMRC agree to drop the enquiry into the use of the EFRBS and will only consider penalties in 'exceptional circumstances'.

Users of EFRBS should carefully consider the terms of the settlement opportunity before making a decision regarding how to proceed.

News & Views from PD Tax - December 2013

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