HMRC announced in July that it was giving 16,000 users of a complex £430 million corporation tax avoidance scheme involving offshore loans six months to pay tax and interest charges it says are due, or risk further charges and penalties should the dispute go to court. (See:
HMRC gives settlement chance to contractor loan schemes - Shout99, July 2014)
HMRC says that the tax owed will begin to accumulate interest at a rate of three per cent 30 days after demand notices are received.
NoPalaver, who provide accounting services to contractors, said that many middle-ranking IT contractors became involved in the scheme without being aware of how 'aggressive' it was. The average user of the scheme owes £11,000 per year in tax and interest.
NoPalaver suggests that HMRC's 'Time To Pay' scheme, under which the tax authority allows those who owe tax to negotiate extended payment terms, is a tool HMRC should use for the mid-earning IT contractors who wish to repay the tax they owe from the 'contractor loan' scheme.
The Time To Pay scheme saw widespread use during the credit crunch and recession as numerous businesses struggled to pay large lump sum tax bills.
Graham Jenner, Director at NoPalaver, said: "We hope that HMRC recognises that most of the people in this particular scheme are not wealthy jetsetters attempting to avoid hundreds of thousands of pounds in tax.
"These are everyday people, many of whom were misled by scheme promoters, never really understood the implications of the scheme, and regret ever getting involved with it.
"While we and other advisers like ourselves recommend contractors steer well clear of aggressive tax planning schemes, we do sympathise with those who had the wool pulled over their eyes by scheme promoters who told them that there was little or no risk involved.
"This is an opportunity for HMRC to show some sympathy towards the huge number of these people who are fully prepared to pay back the tax they owe. The Time To Pay scheme is the perfect tool for the job, if HMRC is prepared to use it."
--
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
-
Susie Hughes © Shout99 2014
|
