Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Remuneration definition

What does Remuneration mean? Remuneration is the pay an individual receives for work, typically basic salary and, depending on context, variable elements such as bonuses, commission, overtime and allowances. It is a descriptive expression used across employment, company and tax law, with its precise scope set by the relevant statute, contract, policy or scheme rules rather than by a single universal legal definition. In pensions practice—particularly defined benefit schemes—the pension accrued is usually linked to pensionable remuneration (often called pensionable salary or pay). Whether remuneration includes or excludes bonuses, commission, overtime, car or location allowances, shift premia and other fluctuating emoluments is determined by the...

UK disguised remuneration and pensions: Part 7A ITEPA 2003—gateways, relevant steps, exclusions, and implications for EFRBS; HMRC Spotlight 58

Published by a LexisNexis Pensions expert

Practice notes

What is disguised Remuneration?

For many years, HMRC has worked to ensure that rewards arising from employment are correctly brought within income tax and National insurance contributions (NICs), deducted by employers through the Pay As You Earn (PAYE) regime. To support this objective, the Finance Act 2011 introduced the disguised remuneration rules, designed to address the use of Employer Financed Retirement Benefit Schemes (EFRBS), Employee Benefits Trusts and other forms of ‘disguised remuneration’, so that receiving benefits is no more advantageous than taking a wage.

The legislation places a PAYE duty on the employer and/or trustees of pension arrangements to collect income tax and the related National Insurance Contribution (NIC) charges. It also serves as a clear warning to employers and the promoters of tax avoidance schemes that contrived pay structures intended to avoid, defer or lessen income tax Liabilities will face robust challenge.

When the draft provisions were published in December 2010, they attracted significant criticism because of their broad scope and the risk that they would capture innocent arrangements that did not involve tax avoidance...

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Wyn Derbyshire

gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also...

Web page updated on 22/05/2026

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