Extract taken from the HMRC website (11th September 2013) with regards to the latest crackdown on contractors involved in so-called “loan schemes”. Could this see the start of more demand letters on contractors that may have used these types of schemes?
“HM Revenue & Customs (HMRC) is challenging arrangements used by contractors and other professionals to avoid tax by entering into a contract of employment with an offshore employer, while providing their services in the UK. Under these arrangements, the users receive a substantial proportion of the fees for their services in payments which are said to be loans. But HMRC does not agree that these arrangements succeed in avoiding tax. Individuals using these schemes may have received letters opening enquiries into their recent returns. Over the coming months, HMRC will be sending tax assessments to those who have used these schemes between 2008 and 2011.
If you receive an assessment you can either:
• accept the assessment and pay the tax due
• appeal against the assessments and begin the process to have your case heard by an independent tax tribunal
If you can’t reach an agreement with HMRC Further information about the rules on assessing and how to appeal is being issued with the assessments.”