Contractors Loan Charge
This is an important update about proposed legislative changes relating to the Government's objective to tax as earnings all relevant pay scheme loans that have not been fully taxed or repaid by 5 April 2019 (the "loan charge"). These changes will have retrospective effect back to 5 April 1999. The Income Tax (mainly at higher rate for most) and National Insurance to be charged all in one go on the outstanding total loans from all schemes used will be due by 31 January 2020.
This charge would apply regardless of whether the year in which the loans were received is under appeal or enquiry and no credit will be given for tax paid on any benefit in kind relating to the loan. We are in consultation with HMRC's Technical Division for guidance on several related matters, in particular, the handling of open appeals and enquiries.
Following completion of the recent Consultation process the proposals are likely to become law in the Finance Act 2017. We will be following the Bill and any changes as it passes through Parliament.
Click HERE for the latest Government update.
Do contact us if you want to discuss the present status of your case and how these changes are likely to affect you. Again, we strongly suggest that you plan and make financial provision wherever possible during this interim period.