Statutory demands relating to disguised remuneration schemes

We have recently successfully assisted several clients who had previously utilised arrangements involving Curzon Capital Limited. The arrangements involved payments being routed through a trust and received as “loans”.

HMRC considers these payments to be disguised remuneration, meaning income tax and National Insurance contributions may be due. Many individuals have already reached settlement with HMRC on this basis.

New demands from third parties

Some former participants in these arrangements have been contacted by a company claiming that the “loan debt” has been assigned to it by the original trustees. This company initially sought payment in exchange for extending the loan period. However, more recently, individuals have received a statutory demand seeking repayment of the alleged loans. HMRC has issued Guidance for taxpayers who receive such correspondence.

Take action

A statutory demand is an important legal document which requires action to be taken within strict time periods. Failing to act promptly can lead to significant consequences for the recipient of such a demand, including potential bankruptcy proceedings.
If you have participated in disguised remuneration or similar arrangements and:

• received correspondence from an unfamiliar company seeking payment in return for extending the loan period, or
• been served with a statutory demand in relation to such arrangements

you should seek specialist legal advice immediately in order to protect your position and understand the options available to you. In many cases, it will be possible to successfully challenge the statutory demand, but it is important that you take action and do not ignore the demand.