HMRC have announced the details of their latest disclosure opportunity which is expected to give approximately 16,000 tax avoidance scheme users the opportunity to pay the tax they owe.
The contractor loan scheme used non-UK employers to pay untaxed income or a loan instead of paying part of an employee's salary.
HMRC are inviting those who have used the scheme to bring their affairs up to date using the contractor loans settlement opportunity which will allow taxpayers to settle their liability in the best possible terms. This opportunity is for the tax years up to 5 April 2011 and is open until 9 January 2015.
If they do, they will pay the tax and interest due on the sums they received as loans under the scheme. HMRC are warning that if participants continue to challenge HMRC in the courts, they risk having to pay additional tax charges and penalties - as well as the costs of litigation if they lose.
Jennie Granger, HMRC Director General for Enforcement and Compliance, said:
'Many people regret ever getting involved with complex aggressive tax avoidance schemes and HMRC is providing an opportunity for contractors to come forward and straighten out their tax affairs.'
'This is an important opportunity and we are working hard to encourage users to withdraw from such schemes. We also want to ensure they've understood our position. They can choose to continue to litigate for a better outcome but they risk a worse result. HMRC has a strong track record of winning tax avoidance cases in court, with around 80% of decisions in our favour. The costs for users are high, potentially resulting in penalties, charges and significant legal costs for scheme users.'
Please get in touch if you have any concerns in this area.
Internet link: Contractor loan disclosure opportunity