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.