HMRC has published a new Spotlight with an update on contractor loan tax avoidance schemes as a result of a recent Tribunal decision. ‘Spotlights’ are designed to provide warnings about certain tax avoidance schemes which HMRC thinks taxpayers should be aware of. These are just some of the schemes which HMRC believes are being widely offered to help those using them to avoid tax.

HMRC advise that the First-tier Tribunal dismissed all the arguments put forward by an IT contractor to persuade them that his contractor loan tax avoidance scheme worked and the money he received was not taxable. In Philip Boyle v HMRC the tax tribunal judge decided that the money paid over to Mr Boyle as loans was ‘in substance and reality income from his employment’ and therefore taxable.