• Skip to main content
  • Skip to primary sidebar

DFC Accountants

Accountancy and Business Services in Cardiff, Wales

  • home
  • privacy statement
  • how we can help
    • accountancy
    • bookkeeping
    • VAT
    • payroll
    • taxation
    • share dealing losses
    • exit or succession planning
    • solutions for you
  • digital tax
  • meet the team
  • wealth management
  • advisory
  • news & updates
  • Login
  • contact us

22/11/2018 – Loan schemes

28th November 2018 by

The law of unintended consequences came into play when the government changed the off-payroll working (IR35) rules for public sector contracts. Those contracting to public bodies such as NHS trusts suffered reductions in their take-home pay, and were tempted into using disguised remuneration schemes to make up the losses.

These schemes are variations of contractor loans which were closed down by anti-avoidance legislation years ago, but doctors and other health service staff are still being sold these complex and illegal schemes. We are warning clients who work in the public sector that schemes with tag lines such as “fully compliant 90% take home pay solution”, are illegal and if the promoter claims the scheme is approved by HMRC, it most certainly isn’t.

What is worse for the promoters and users of those schemes, is the general advisory panel of the general anti-abuse rule (GAAR) has recently ruled that a contractor loan scheme and a scheme involving employee loans, are both abusive arrangements. This means that HMRC can now issue counteraction notices to users of those schemes.

These notices may lead to the taxpayers being liable for a GAAR penalty, and will trigger the issue of an accelerated payment notice (APN) to demand payment of the avoided tax. The penalty and tax payment can both be enforced without the scheme having to be examined at a tax tribunal.

If you have already used a loan scheme, and is subject to the 2019 loan charge, you should read the updated guidance from HMRC. If you should need any further information please contact our office.

Written by the Tax Advice Network

Filed Under: Uncategorised

Primary Sidebar

Contact Us

02920 448 120
julie.burrows@dfcaccountancy.co.uk
Address:
2 Alexandra Gate
Ffordd Pengam
Cardiff, Wales, CF24 2SA

News & Blog

  • Changes to VAT return wording – 08/04/2021 8th April 2021
  • VAT Partial exemption concession – 08/04/2021 8th April 2021
  • New rules for accounting records – 06/04/2021 6th April 2021
  • NMW rates – 01/04/2021 1st April 2021
  • New tax year – 01/04/2021 1st April 2021

© 2021 DFC Accountants Ltd · Site by The Clever Web Company

Address: 2 Alexandra Gate, Ffordd Pengam, Cardiff, Wales, CF24 2SA
Email: julie.burrows@dfcaccountancy.co.uk