By Lynne Gowers on 21st September 2018

HMRC’s contractor loan charge in the news

contractor loan scheme

50,000 people, including nurses and teachers, are facing life-changing tax bills going back over 20 years, as HMRC prepares to introduce its retrospective contractor loan charge in April 2019.

This controversial measure was the focus of a BBC breakfast interview this week, featuring Paul Lewis of BBC Radio 4’s Money Box programme.

For more detail, you can listen to the Money Box episode here.

The fact that the mainstream media are talking about this shows the scale of the problem and the urgency for anyone affected to contact HMRC by the end of September to arrange a repayment plan for retrospective taxes. Otherwise, come April they face a demand for the whole amount in one hit. Find out more about 2019’s contractor loan charge.

Last opportunity to settle

The charge may impact contractors who have taken some or all of their wages as a loan since 1999, even if it was on the advice of their agency.

Anyone affected has until the 30th September to get in touch with HMRC with a view to settling the tax they owe. This provides the opportunity to set up a repayment plan over up to 5 years (depending on earnings) and avoids the possibility of costly litigation.

Be safe not sorry

As always happens with this type of measure, further schemes are cropping up which claim to circumvent the 2019 contractor loan charge.

Don’t be fooled – HMRC are clamping down aggressively on all sorts of tax avoidance arrangements, and when schemes may seem to work at the time, HMRC tend to retrospectively close loopholes -so they often don’t work for the longer term.

The companies promoting them can make very attractive promises, but then disappear overnight, potentially leaving the user with a huge tax bill.

One way of avoiding this is to always choose an FCSA accredited contractor accountant, umbrella company or CIS provider. You can find a list of them here

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Lynne Gowers Written by Lynne Gowers

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