HomeFWJ TakeawayResourcesHMRC contractor loan schemes settlement opportunity

Contractor loan schemes are considered by HMRC to comprise tax avoidance schemes promoted by tax advisers solely for the purpose of avoiding tax on income paid by an employer to the contractor, often through a chain of trusts, which is never repaid.

On this basis the “loan” is actually income and must be declared to HMRC on your tax return. A settlement opportunity offered in 2011 expired in 2016 and another offer then expired on 5 April 2019.

Contractor loan schemes work in a similar fashion to Employee Benefit Trusts and are therefore, in the eyes of HMRC, disguised remuneration tax avoidance scheme. On this basis contractor loan schemes fall foul of the Finance Acts 2017 and are subject to a disguised remuneration loan charge since 5 April 2019.


At Francis Wilks & Jones we have considerable experience of negotiations with HMRC and should you have issues relating to contractor loans or any other type of disguised remuneration or tax dispute, we can help.

Contact us in confidence