The GAAR advisory panel has published a new opinion on disguised remuneration arrangements using dual payments, signalling increased HMRC scrutiny of multi-channel remuneration structures.
The General Anti-Abuse Rule (GAAR) advisory panel has published a new opinion concerning disguised remuneration arrangements using dual payments, which has been added to the GAAR collection page on GOV.UK. For accountants advising on complex remuneration structures, this development warrants close attention.
What is disguised remuneration?
Disguised remuneration schemes typically involve arrangements designed to provide employees or office holders with financial benefits whilst attempting to avoid, defer or reduce income tax and National Insurance contributions. These schemes often use intermediaries, loans, trusts or other vehicles to obscure what is fundamentally employment income. HMRC has pursued such arrangements vigorously for over a decade, with mixed results in the courts and tribunals.
The GAAR panel's new opinion specifically addresses dual payment structures—arrangements where individuals receive compensation through multiple channels, potentially designed to split remuneration between taxable and non-taxable pathways or to create technical arguments about source and characterisation.
The GAAR's role
The GAAR is codified in the Finance Act 2013 and is HMRC's primary legislative tool for challenging tax arrangements that are abusive. An arrangement is considered abusive if it cannot be regarded as a reasonable course of action in relation to the relevant tax provisions, having regard to all the circumstances. Before HMRC can issue a counteraction notice, it must refer the arrangement to an independent advisory panel, which provides a non-binding opinion on whether the arrangement is abusive. Practitioners and taxpayers often rely on published GAAR opinions to assess the riskiness of similar arrangements.
Why dual payments matter
Dual payment arrangements have become more prevalent as employers and advisers seek to structure remuneration in ways that they argue fall outside conventional PAYE and National Insurance. For example, some schemes have involved paying individuals partly through salary (taxable and subject to National Insurance) and partly through loans or benefits-in-kind (claimed to be outside employment income). Others have used phased payments or split structures between a company and a trust to suggest different tax characterisations.
The panel's published opinion on dual payments will provide HMRC with advocacy support for counteracting such schemes, and it serves as a warning signal to practitioners that such structures are now on HMRC's radar at the highest level.
Practical implications
Accountants should:
- Review existing arrangements: If your firm has clients using multi-channel remuneration structures, especially those involving loans, trusts, or artificially separated payments claimed to have different tax treatment, flag them for reassessment.
- Tighten client advice: Where clients are tempted by schemes that split remuneration to "reduce tax", explain the GAAR risk. A published panel opinion strengthens HMRC's position and increases the likelihood of a successful counteraction notice.
- Document substance over form: Where remuneration is genuinely complex (e.g. performance-based bonuses, retention schemes, or genuine secondment arrangements), ensure the commercial rationale is documented and the tax treatment flows logically from the substance, not vice versa.
- Monitor your language: Be cautious of advice framed around "tax efficiency" of dual payments. GAAR cases often turn on whether an arrangement has a genuine commercial purpose beyond tax reduction.
Next steps
Practitioners should read the full GAAR panel opinion on the GOV.UK GAAR Collection page. If you advise clients on remuneration structures, factor this opinion into risk assessments, particularly for schemes already subject to HMRC enquiry. Where clients have used dual payment arrangements, early voluntary disclosure under the Disclosure Improvement Notice (DIN) regime may be prudent.
The GAAR has matured significantly since 2013, and published panel opinions now form a body of guidance on what HMRC considers abusive. Dual payments, in particular, will be harder to defend going forward.
Further reading
- UK tax & accounting resource library — the Acts, regulations and standards referenced in our coverage.
- Accountancy, tax & regulatory bodies — HMRC, Companies House, ICAEW, ACCA and the rest, with what each one does.
- Find an accountant — AOPA member firms across the UK, searchable by town and service.
- How to find a good accountant — what to check before you appoint one.