Why you should beware of any Contractor Loan Scheme

Several umbrella companies are still offering ‘Contractor Loan Schemes’ also known as ‘Disguised Remuneration Schemes’ to doctors. Often these arrangements are claimed to be ‘Approved Tax Schemes’ and offer doctors the opportunity to pay as little as 10% of their gross pay in tax and national insurance contributions.

However, the phrase ‘Approved Tax Scheme’ usually means that the tax scheme or arrangement has been approved by a tax barrister working for the scheme promoter. These schemes have never been approved by HMRC.

HMRC are clamping down on these tax avoidance schemes and have made it very clear they intend to challenge any company considered to be actively encouraging tax avoidance.

Remember, if a tax scheme appears to be ‘too good to be true’ it probably is!

If things go wrong then it will be you that is facing the HMRC and instead of making a tax saving you could find yourself with a large tax bill.

Get specialist professional help

You may have been advised to be paid under such an arrangement by an agency or a scheme promoter. Remember agencies are not tax advisers and are unlikely to help you if a tax avoidance scheme fails. They may also not be impartial as they may receive commissions from the scheme promoter.

We will be pleased to talk through the scheme with you and advise you whether it is likely to be acceptable to HMRC.

If you are under investigation by HMRC as a result of being paid through a tax scheme we can help resolve the matter and put an end to the enquiry.