Contractors have until 30th September to settle loans or benefit trusts with HMRC

(2 minutes to read)

Contractors with an outstanding loan or benefit trust are being reminded by the FCSA that they are at risk of a very significant tax bill if they don’t act now.

For those contractors who do have an outstanding loan or benefit trust, they have until 30thSeptember to register to settle with HMRC.

The FCSA warns that this is because HMRC’s 2019 loan charge is ‘starting to bite’. Under the charge, any contractor loan that is outstanding on 5thApril 2019 will be treated as taxable remuneration, and contractors will be obliged to pay the tax and NICs incurred.

The amount to be charged depends on the specifics of every case, but according to an online petition, a contractor working for 5 years on a salary of £30,000 could be liable for a sum of around £40,000.

The only way to safeguard against the loan charge is to repay the loan or settle with HMRC; contractors wishing to settle will need to register with HMRC by 30thSeptember in order to ensure that settlement can be reached prior to the loan charge coming in April 2019.

Still thinking about if you should join Dolan Accountancy?

Give us a call on 01442 795100 or email jaime.thorpe@dolanaccountancy.com

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FCSA’s chief executive Julia Kermode said, “The financial consequences are significant for contractors and I don’t think that HMRC has done enough to publicise the loan charge, nor its impact on contractors. I am very concerned that there are large numbers of people who will be affected by these loan charges who are, as yet, completely unaware, and may miss the opportunity to settle before it is too late.

“The legislation is very broad in scope so it is unlikely that there will be many exceptions, if any. My advice is to be very wary and sceptical if scheme promoters tell you that theirs is not caught by the loan charge and seek independent professional advice.”

To find out more about contracting please contact James on 01442 795 100 or email james.trowell@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, ContractorUmbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of ContractorUmbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, ContractorUmbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use CashPlus free of charge for the first year, saving you £69.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

Dolan Accountancy

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