Contractors whose employers paid them through loans from offshore trusts are being urged to speak to HMRC as soon as possible or risk receiving massive tax bills.
Up to 50,000 contractors in the UK are believed to have benefitted from the lower income tax rates applied under loan advances, instead of being paid salaries.
Those yet to have settled outstanding loans dating back to when the schemes first arose in 1999 could be facing a hefty tax bill.
Anyone who is affected by these loan arrangements will need to pay a loan charge to the Revenue on the outstanding balance by 5 April 2019.
HMRC has confirmed that payment arrangements are available for those who would struggle to pay back what is owed.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA), said:
“Anybody who used a loan scheme, or even thinks they may have been enrolled on one, should seek advice from a qualified accountant.
“It is important to check if you are still enrolled, as HMRC will only offer you help if you are no longer using loan schemes.”
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