A group of contractors who used tax avoidance schemes have branded looming fines “grossly unfair” and a breach of human rights in an official legal challenge.
The tax office has targeted around 50,000 self-employed people with a “loan charge”, set to hit in April, which those liable claim will see them forced into bankruptcy.
The dispute arises from the contractors’ use of complex arrangements, popular and widely accepted to be legal in the early 2000s, in which much of their salary was paid in the form of supposedly tax-free loans.
Well, they were actually legal. What is not illegal is legal, recall? Then the rules were changed. Retrospectively.
Following the successful case against Scottish football club Rangers last year, the Government introduced a new law and HM Revenue & Customs has deemed any outstanding loans liable for tax.
The contractors will also be hit by the loan charge, which rolls all the loans received into a single tax year meaning the bill could be more than the actual tax liability. It also does not clear the original unpaid tax bill.
But Moar Tax is to be collected so that’s fine, isn’t it.