MP’s are claiming that HMRC’s estimate of the number of healthcare professionals who will be affected by the upcoming loan charge is too low.
The Loan charge will apply to all outstanding Disguised Remuneration and Contractor Loans on 5 April 2019.
HMRC estimate that it will affect 50,000 taxpayers and that around 1,500 (3%) of these are doctors and nurses and 1,000 (2%) are social workers. However, Ed Davey, the Liberal Democrat MP and chairman of the parliamentary panel investigating the loan charge, has said the true number could be higher.
It seems the introduction of the off payroll working rules for the public sector in April 2017 may have caused many contractors working in the NHS to be pushed towards joining loan schemes because NHS trusts are automatically treating them as subject to the new rules, resulting in them being taxed as employees. Often, they have only dealt with a salesman, do not really understand how the scheme works, and have not fully investigated what the potential tax implications are despite being asked to sign rafts of paperwork.
In view of its retrospective nature, following a cross party amendment tabled by Ed Davey, the Chancellor must review the effects of the loan charge and provide the House of Commons with a report by 30 March 2019. Given the timing of this report, just after the due date for Brexit and just before the loan charge takes effect, it seems unlikely that the report will have much of an impact.
HMRC’s Settlement opportunity remains open for anyone who wishes to discuss settlement of their loan scheme before 5 April.
Links to our guides:
Disguised Remuneration & Contractor loans
A guide to everything you need to know about disguised remuneration schemes, the loan charge, and how to reach a settlement with HMRC.
FAQs for disguised remuneration settlement
This guide looks at Frequently Asked Questions for settling Disguised Remuneration schemes. The FAQs relate to EBTs, EFRBS and contractor loan schemes (employed and self-employed).
Disguised remuneration final settlement opportunity
A detailed guide to the November 2017 final settlement opportunity for all disguised remunerations schemes.
