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In an owner-managed business it was sometimes argued that the rewards received from a third party such as an EBT arose to the individual in their capacity as a shareholder and not in their capacity as an employee. If that were the case then part 7A would have no application to them, as it is predicated on the requirement that the arrangement relates to the rewards etc of employment. In order to counter this argument Finance Act 2018 introduced a 'close companies' gateway' to the disguised remuneration rules. It largely replicates the pre-existing gateway for employment related rewards (see E4.1052) but there are some important differences. In many cases an arrangement may be caught by both the existing and new gateways. That is not a problem. They are alternatives and only one has to be satisfied before the arrangements is brought within Part 7A. There is no double charge if both gateways are satisfied.

With effect in relation to relevant steps (see E4.1057) taken on or after 6 April 2018 the charge to tax under the disguised