HMRC announced a new settlement “opportunity” open to around 16,000 tax avoidance scheme users of contractor loan schemes.

According to HMRC, the schemes, used by a small minority of contractors involve complex arrangements with individuals signing a contract of employment with an offshore employer. The contractor then receives their pay through the offshore company or trust as what is claimed to be a non-taxable loan, rather than income. Users of the scheme have until January 2015 to take up the settlement opportunity on which they will pay the tax and interest due on the sums they received as loans under the scheme.

This settlement opportunity applies to schemes used before the Disguised Remuneration rules were introduced in April 2011. HMRC is writing to all users who are being offered the settlement opportunity, explaining how they can resolve their case. More information is available at www.hmrc.gov.uk/avoidance/contractorloans.htm.