“Contractor Loan” planning has been around for some years. We have never much liked it.
Last year HMRC took on and defeated a particularly egregious example of the planning in the Boyle case (see our earlier comment and article) and, flushed with success, have now published details of their “Settlement Opportunity”. It does not offer much by way of compromise or concession: HMRC “concede” that no NIC will be payable if the Opportunity is accepted – but it is somewhat doubtful whether NIC is due anyway. The main advantage of accepting is therefore to bring closure and certainty. If cash resources do not permit of immediate settlement, HMRC will discuss instalment payments.
We suspect that in many cases accepting the offer will be the best way forward, though in some variants of the scheme it may be possible to put forward technical arguments to carry on the fight if you have the stomach for it.
For more, please get in touch with your usual BKL contact partner or use our enquiry form.