HMRC has updated its Spotlight publication to comment on contractor loan arrangements which have the effect of reducing taxable income. HMRC states that it is of the view that such arrangements, some of which have been in place and known to it for many years, do not achieve the intended tax saving.

There are a large number of contractors who participated in such arrangements who are currently in dispute with HMRC and this latest Spotlight is no doubt intended to pressurise such contractors to accept HMRC’s view of the fiscal effect of the arrangements they entered into.

Spotlight 26 can be read here.