Thousands of IT Contractors could be facing fines as BN66 ruled not unlawful

On the 28th January, the Royal Court of Justice ruled the retrospective effect of BN66 is not unlawful.

This decision could affect thousands of IT contractors who have used or are using offshore schemes or companies as a way of avoiding paying UK taxes. Even if you have used a scheme for just one day, you could now be facing both fines and backdated taxes as the HMRC can go back as far as 1987, the year that BN66 tax legislation was imposed.

This sends a clear warning that if you live, work or are paid for work you do in the UK that there is no way to avoid UK taxes. Running your own UK limited company is the most tax efficient way of working legally and you should think very carefully before trying to beat the system by using an offshore scheme.

BN66 relates to those commercially exploiting taxable aggregate in the UK. For further information, please visit http://www.hmrc.gov.uk or contact your accountant.

Emma Nicholson, Contracts Manager