HMRC banishes ‘rank’ contractor loan scheme advert

A lack of detail has undone an advert by a contractor loan scheme provider who directly targeted IT contractors with “IR35” and other compliance claims.

Williams Gordon Ltd, which ran the ad on its site in July, gave ‘insufficient’ evidence to defend all three complaints against it, filed by HMRC to the Advertising Standards Authority.

The first was from the ad saying; “Take home up to 92% of your pay” and “receive a monthly market rate gross salary equivalent payment, that will be subject to tax and NI deductions.”


In the absence of “sufficient information” about the arrangement, and how it complied with standard income tax/NI payments, Williams Gordon (WG) was told the ad was “misleading.”

In upholding this first of HMRC’s complaints, ASA also found that WG did not substantiate the ad, as case law they say supports the arrangement was not cited, provided or explained.

The Revenue’s second complaint was over WG’s supposed compliance credentials. “We are fully compliant with the necessary HMRC legislation and with all current IR35 policies.”

'Misled by omission'

As well as stating “you remain tax compliant”, the provider added that its experts offer contractors “the highest return…in a legal, robust, documented and defendable way.”

These claims were misleading to the taxman, additionally they “misled by omission” because WG failed to make reference to relevant schemes or charges which might apply.

Even if the alluded to Disguised Remuneration rules didn’t apply (as WG claimed but HMRC rejected), the scheme could be caught as well by the GAAR, so users would still be stung.

Lack of detail, evidence

In upholding the Revenue’s second complaint, the ad regulator explained: “Williams Gordon had not provided sufficient detail about the way in which the scheme worked

“[It had also not] provided any evidence to support the position that omitting information about the DR scheme, the loan charge and/or GAAR would not mislead traders”.

Trying to respond positively to the accusations, WG offered to amend its site to read “compliant with all UK tax legislation”, but the ASA said the tweak wouldn’t be enough.


The third complaint of HMRC stemmed from it taking issue with WG’s ‘Corporation Tax’ page claims (it was linked to from the advert), in essence because it said they smacked of tax avoidance which it would challenge.

“[We can help] if your current year’s profits will be liable to [CT] and you want to reduce/not incur the tax,” WG wrote, after touting the same on overdrawn director loan accounts.

Having explained that its planning for PSCs was in conjunction with a “Finance Company partner,” WG said their “product combines [CT] Relief, with non-taxable personal payment.”

But the arrangements are within “any reasonable definition of tax avoidance,” ASA decided. And even if now closed, HMRC could have probed the scheme for disclosure under DOTAS.


The ad ruling adds: “We therefore considered that Williams Gordon should provide documentation to show that the arrangement did not involve tax avoidance.

“We noted that Williams Gordon had provided a letter from HMRC to a named business, headed “Disclosure of Tax Avoidance Schemes - Arrangements using a foreign currency loan”, but had not provided any further detail or documentation reflecting the wider context and relevance of the letter”.

So again, in the absence of “sufficient evidence” to show the scheme did not involve avoidance, or fall under DOTAS, the ad watchdog agreed that the claims are “misleading.”

With all three HMRC complaints against it upheld, the provider was told the advert must not run again in its current form, which is likely because the arrangement is “defunct” anyway.


WG was also told to hold sufficient evidence for future ad claims and disclose relevant information in its ads, such as the risks for contractors of entering into an arrangement.

“Williams Gordon’s website ‘misled by omission’ -- by failing to mention the GAAR and the loan charge on disguised remuneration loans outstanding on 5th April 2019,” said the FCSA.

Chief executive Julia Kermode added: “There was a similar ASA ruling last year about a ‘HMRC approved’ scheme; [it’s] good to see them taking action.”

However, it’s not just Williams Gordon who has to take action. “The ASA ruling sets an example, so other avoidance promoters can’t make the same claims about similar schemes,” claimed a HMRC spokesman, adding: “These types of schemes are rank and don’t work.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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