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Contractors troubled by retrospective loan charge

A report published recently by Contractor UK found that close to 70% of contractors in the UK were experiencing mental health problems caused by the retrospective loan charge.

This charge is connected with disguised remuneration schemes where contractors receive payment through loans instead of salaries, which are not subject to taxation. However, the findings of the report were that those who had taken such loans out innocently, rather than as deliberate tax avoidance, were being targeted by the charge as well, and that this was causing them real stress.

The retrospective loan charge came into force on April 5 and it means that around 50,000 contractors who used such loan schemes and did not pay income tax or national insurance as a result are now being hit with retroactive financial demands.

The report found that 38% of those surveyed felt stressed due to this, 24% felt that they were being overcharged by HMRC, 20%feared that they could not afford the charges, and 21% were worried about losing their homes as a consequence.

According to Accountancy Age, Contractor UK stated that:

“While contractors are expected to pay the full amount, the companies that advertised these loans will receive no penalty. Over half (56%) feel that these companies should, at least in part, pay the charges contractors have been faced with.”

It makes sense to get advice from contractor accountants in Liverpool, London, Birmingham or whatever city you are based in if you have concerns about these charges.

Posted by Mark
April 23, 2019
Research & Statistics

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