HMRC has issued a final reminder about the settlement opportunity for individuals who engaged in contractor loan schemes in tax years up to 5 April 2011. The chance to sign up for the settlement opportunity will close on 30 June 2015, with no further deadline extensions.
HMRC has issued a final reminder about the settlement opportunity for individuals who engaged in contractor loan schemes in tax years up to 5 April 2011. The chance to sign up for the settlement opportunity will close on 30 June 2015, with no further deadline extensions.
According to HMRC, contractor loan schemes were promoted on the basis that they allowed contractors and freelancers to convert fees for working in the UK into a loan to avoid tax. However, following litigation against one of these schemes, the courts decided that the scheme didn’t work and that these loans were taxable.
Launched in July 2014, the contractor loan settlement opportunity (CLSO) gives those who used contractor loans schemes before April 2011 the opportunity to resolve their tax dispute without potential litigation. HMRC is looking to collect the tax and interest from all users of the scheme, and says that if contractors using these schemes fail to come forward and take up the opportunity, they risk having to pay additional tax charges and penalties, as well as potential litigation costs should their case reach the tax tribunal.
Jennie Granger, HMRC’s director-general for enforcement and compliance said: ‘Contractor loans are a form of tax avoidance that do not work and are unacceptable – it’s not fair that the majority of us pay what we should, including contractors to fund public services that we all use but others don’t. HMRC remains relentless in its work to tackle avoidance and will continue to use its full range of powers to this end. The CLSO gives this group a chance to put their affairs in order by paying the tax they owe and put avoidance behind them.’ Customers who tell HMRC that they want to come forward under these terms by 30 June will need to settle by 30 September 2015.
HMRC has issued a final reminder about the settlement opportunity for individuals who engaged in contractor loan schemes in tax years up to 5 April 2011. The chance to sign up for the settlement opportunity will close on 30 June 2015, with no further deadline extensions.
HMRC has issued a final reminder about the settlement opportunity for individuals who engaged in contractor loan schemes in tax years up to 5 April 2011. The chance to sign up for the settlement opportunity will close on 30 June 2015, with no further deadline extensions.
According to HMRC, contractor loan schemes were promoted on the basis that they allowed contractors and freelancers to convert fees for working in the UK into a loan to avoid tax. However, following litigation against one of these schemes, the courts decided that the scheme didn’t work and that these loans were taxable.
Launched in July 2014, the contractor loan settlement opportunity (CLSO) gives those who used contractor loans schemes before April 2011 the opportunity to resolve their tax dispute without potential litigation. HMRC is looking to collect the tax and interest from all users of the scheme, and says that if contractors using these schemes fail to come forward and take up the opportunity, they risk having to pay additional tax charges and penalties, as well as potential litigation costs should their case reach the tax tribunal.
Jennie Granger, HMRC’s director-general for enforcement and compliance said: ‘Contractor loans are a form of tax avoidance that do not work and are unacceptable – it’s not fair that the majority of us pay what we should, including contractors to fund public services that we all use but others don’t. HMRC remains relentless in its work to tackle avoidance and will continue to use its full range of powers to this end. The CLSO gives this group a chance to put their affairs in order by paying the tax they owe and put avoidance behind them.’ Customers who tell HMRC that they want to come forward under these terms by 30 June will need to settle by 30 September 2015.
