Spotlight is HMRC’s publication which highlights and summarises avoidance schemes that HMRC considers do not work and explains what users of the schemes should do to regularise their tax position. HMRC has a special webpage on which you can find all of the Spotlights Tax avoidance schemes currently in the spotlight.
The latest Spotlight covers contractor loan schemes and is Spotlight 42. HMRC announced in July 2016, Spotlight 33, that it didn’t believe that these schemes work.
The latest scheme was advertised as if it did work and HMRC made a complaint to the Advertising Standards Authority (ASA). The ASA agreed with HMRC and ruled that the claims made by Williams Gordon, the promoter of the particular contractor loan scheme, are misleading and must be withdrawn.
The Williams Gordon website claimed that you could “take home up to 92% of your pay” and that the scheme was “fully compliant with the necessary HMRC legislation and with all current IR35 policies”.
The ASA also ruled that the Williams Gordon website “misled by omission” - by failing to mention the many government tools and policies aimed at the avoidance they were promoting.
The Williams Gordon website also fails to highlight that the contractor loan scheme offered is a form of tax avoidance which HMRC believes doesn’t work.
HMRC has said that it will enquire into all users of the scheme who will be affected by the loan charge if they don’t settle their affairs before 5 April 2019. As well as any extra tax due, penalties may also be chargeable.