The deadline for HMRC’s Contractor Loan Settlement Opportunity (CLSO) was recently extended to 30 June 2015. In anticipation of the deadline and to focus attention on the Contractor Loan Schemes (CLSs), HMRC have begun issuing protective assessments for the 2011 tax year. The purpose of the assessments, no doubt, is to motivate more contractors to use the CLSO before it expires.
In addition to these initiatives, HMRC are sending out information notices to the participants of contractor loan schemes that were operated in later years.
What does this mean?
HMRC’s aim is to raise revenues as quickly as possible and the new Accelerated Payment Notice (APN)/Follower Notice (FN) legislation will force participants to pay the tax even if they do not agree it is due. HMRC successfully persuaded the First-tier Tribunal in 2013 that the loans were in the nature of employment income and this decision will almost certainly lead to FNs being issued if participants do not take up the CLSO.
HMRC are particularly focused on cracking down on users of CLSs involving an offshore promoter/ employer.
Gabelle are experienced in assisting clients that have received FNs/APNs or assessments in relation to their participation in a CLS. Our negotiations with HMRC have resulted in the total settlement (including tax, interest and penalties) being reduced by up to 40% in some cases and we have also negotiated additional time to settle the liability, with no additional interest.
Gabelle can advise on all aspects of the disputed tax linked to the CLSO. Among the favourable terms applied under the CLSO, is the exclusion of National Insurance from the settlement figure.