\u201cto complete your tax return to show any loans you have received as earnings\u201d<\/em> and settle their tax bills, which often amount to tens of thousands of pounds.<\/p>\nSpotting an avoidance scheme<\/h2>\n Whether you are a contractor yourself, or a recruitment agent looking for a payment mechanism for your candidates, all we can say is to steer clear of anything that looks like a contractor loan scheme.<\/p>\n
Joe Taffurelli, Operations Manager at Liquid Friday and FCSA board member, explains:<\/p>\n
\u201c HMRC will always target low-hanging fruit and are actively investigating these sorts of loan-based schemes. As a worker, a huge tax bill will ultimately come back to bite you. As a recruitment agency, you risk transfer of debt and penalties, not to mention the commercial damage of being splashed across the financial broadsheets. I believe this story is just the tip of the iceberg and we will see more and more cases like this come out in the media.\u201d<\/em><\/p>\nContractor loan schemes, often registered off-shore in the likes of the Isle of Man or Malta, attract workers with the promise of taking home 80 – 90% of their income without being taxed. A high proportion of the wage is paid out as a loan to circumvent tax laws.<\/p>\n
\u201cStealing the good name of umbrellas that comply\u201d<\/h2>\n Graham Webber, of tax enquiry specialists WTT Consulting, is representing 2000 contractors who say they were coerced into being paid through loan schemes. \nHe said: \u201cHMRC has scored some very minor victories against such schemes. In terms of striking them down in court, almost nothing has happened as such firms open, trade for a couple of years and then close, with those behind the company opening a new one: phoenixing. Such firms are stealing the good name of umbrella that do comply with the law\u201d.<\/em><\/p>\nDr Iain Campbell, the secretary general of the Independent Health Professionals Association is currently undertaking a survey of just how many NHS professionals are signed up to loan-based schemes. He warns workers using such companies that they are \u201cstoring up a disaster for yourself down the line”.<\/em><\/p>\nThe outstanding tax is just the start. From April 2019 a new HMRC loan charge will add a significant penalty to any tax due. If you have been paid through a loan-based scheme you must register with HMRC by 31st May 2018 and agree to a settlement by 5th April 2019 to avoid the charge.<\/p>\n
The safest way? FCSA accredited only<\/h2>\n The Times Money report cited just one recruitment agency who are trying to get one over on their competition by letting their workers use loan-based payment schemes. Don\u2019t let your agency be the next to crop up in such a negative context. \nManage your reputational and commercial risk by directing your candidates away from loan schemes towards compliant umbrella companies.<\/p>\n
The best way to do that is to only have accredited members of the FCSA as preferred suppliers.<\/p>\n
The FCSA is the UK\u2019s largest independent trade association for umbrella and contractor accounting companies. It works tirelessly to raise the standards of the supply chain in an otherwise unregulated sector.<\/p>\n
You can find a list of FCSA accredited member companies here.<\/a> \nLiquid Friday are one.<\/p>\n","protected":false},"excerpt":{"rendered":"Public sector nurses and social workers are still being encouraged by certain recruitment agencies to take their wages through the dodgiest of dodgy payment schemes. HMRC tax bills are now landing on the doormats of thousands of contractors – with some facing bankruptcy as a result. Named and shamed If you run a recruitment agency, […]<\/p>\n","protected":false},"author":3,"featured_media":2279,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[26,27,43],"tags":[15,25,36],"acf":[],"yoast_head":"\n
Nurses next in HMRC firing line - contractor loan schemes hit the headlines again - Liquid Friday<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n