Stop notice 42

Arrangement details

The remuneration received by users that is attributable to the services provided by them to end clients/agencies is artificially separated byVHR UK/company X (offshore) into 2 elements. One of those elements is paid as a salary with Income Tax and National Insurance contributions (NICs) paid viaPAYE, the other is claimed not to count as employment income and is paid in another manner that is not subjected to Income Tax andNICs. This secondary element is paid by virtue of an option grant agreement, sometimes referred to as a ‘benefit in kind’ and therefore not subjected to Income Tax andNICs. It isHMRC’s view that the total remuneration received by the user is attributable to the services they provide to end clients/agencies and therefore Income Tax andNICsshould be paid on the entire amount.