Employers that have used employee benefit trusts (EBT) to avoid tax have until March next year to settle with HMRC.
The offer of favourable settlement terms, which started in April 2011, has raised £800m in tax and NICs from 700 employers who previously used the trusts to avoid income tax and NI as tax avoidance vehicles, HMRC said.
The Revenue said it will pursue employers through court if they don’t pay tax owed.
HMRC also said that some individuals using EBTs to avoid tax have tried to use another tax settlement offer, the Liechtenstein Disclosure Facility (LDF), to try to pay less tax. Under the LDF, individuals with undeclared offshore assets can regularise their tax affairs.
HMRC and the Liechtenstein government have changed LDF so that users of EBTs, which are registered with the Disclosure of Tax Avoidance Scheme (DOTAS), cannot take advantage of the full terms of the LDF settlement offer.
“Time is running out for anyone who used an EBT to avoid paying tax and still hasn’t settled with HMRC through the settlement opportunity,” said Jennie Granger, HMRC’s director general of enforcement and compliance.