You may or may not have been aware that HMRC has been diligently pursuing a number of 'off-shore' tax saving schemes widely taken up by contractors over the last decade. They have been seeking to apply a piece of legislation known as BN66. In February 2010, the Royal Court of Justice ruled the retrospective effect of BN66 is not unlawful.
Which in plain English means that HM Revenue and Customs can now go back in time and retrospectively apply a piece of tax legislation which will affect thousands of contractors who either once used, or are still using, an offshore scheme/company as a way to avoid paying UK taxes. The Isle of Man has been a popular source of such schemes. HMRC can now go back as far as 1987 (which is when BN66 was imposed), so even if a contractor used a scheme in 1987 for one day or one year, they may now have to pay both fines and backdated taxes.
This news further supports the fact that contractors should think very carefully before using offshore schemes as a way of avoiding paying UK taxes.