UHY Ross Brooke Chartered Accountants

HMRC win Contractor tax loan battle

HMRC have recently issued a “Spotlight” publishing their view on the various Contractor Loan Schemes following the decision in P Boyle (TC1303).

Mr Boyle provided his services through an offshore company and extracted money from that company in the form of loans which he argued were not taxable.

The tribunal dismissed his arguments saying that the money paid to Mr Boyle was “in substance and reality income from his employment” and therefore taxable.

This tax tribunal decision means that the contractor has to pay tax on the loans.

Mr Boyle also argued that if he had received income from his employment, it should have been taxed under PAYE by the offshore company and that he should not have to pay. The judge dismissed that argument as well. She also decided that even if the money Mr Boyle received under the scheme was not income from employment, he would still have to pay tax as a result of specific rules to prevent tax avoidance known as the ‘Transfer of Assets Abroad’ rules.

Share This Post

Related insights

Talk to us

Newbury: 01635 555666
Abingdon: 01235 251252
Swindon: 01793 610008
Hungerford: 01488 682546