BIG GROUP

[webberg]

For further clarity, is this the case even if settlement of the tax has been agreed ?

Good question.

I would say that if you have settled AND had the loans written off, then there is nothing to declare.

If you have settled but the loan has NOT been written off, then I'm much less sure. I think in that instance, some form of protective declaration is sensible.

I'm regularly criticised for saying that the legislation that allows for relief where a loan charge arises is unclear on what happens where the loan is released AFTER 5th April 2019 and AFTER the settlement is agreed.

I believe that if the legislation is clear and no charge can arise on a loan released AFTER settlement, then HMRC should include that in their settlement contract. They do not. They resist doing that.

Until they do include such wording, I remain of the view that the law is unclear.

[pateen]

I've been in a PCC partnership type arrangement for 5 years with AML, however only 2 of those years are where I created and had my own company in that type of scheme.

I understand however that BG will not argue for PCC schemes where you had your own company as the legal charge will be against yourself
Does this approach also apply for the years where I was involved in PCC schemes where I didn’t have my own company?

[webberg]

I've been in a PCC partnership type arrangement for 5 years with AML, however only 2 of those years are where I created and had my own company in that type of scheme.

I understand however that BG will not argue for PCC schemes where you had your own company as the legal charge will be against yourself
Does this approach also apply for the years where I was involved in PCC schemes where I didn’t have my own company?

Your understanding is incorrect.

The use of what we call a "double limited" scheme (i.e. end client > Own Co > Promoter > individual) presents a number of difficulties and potential conflicts with the arguments used against the more "conventional" loan schemes.

We do have a range of potential analyses which might apply to the double limited arrangements, based on which version is used. Some are stronger than others but none of them achieve the sort of confidence level we have in our core resolution strategy.

That would not stop us running the arguments, if necessary to Tribunal, but you would have to be aware that the outcome would be much more finely balanced. I'm not therefore going to pretend that in many cases, settlement of the double limited years might be a better option.

[nucastle]

For clarity.

If you have had loans (or other forms of credit) as part of a disguised remuneration scheme that are outstanding as at 5th April 2019, then you are legally obliged to disclose them.

We understand that there will be a check box on a SATR.

I suggest that even if you have a statement from HMRC that a return has not been required in earlier years, the existence of the loan would count as a change of circumstances and a return is probably required.

It may be that HMRC is unaware of your circumstances and miss you out in assessing. The danger is that if you decide not to declare and it later comes to light, I would expect little sympathy from the agency.

Webberg, can you confirm where the 'other forms of credit' being caught by 2019LC (or equivalent) has been stated? Obviously if it's a professional opinion, that is fine. If it's something stated in an official manner, can you point us in the right direction.

I know for sure that a number of LLP scheme members are still not clear about whether their overdrawn capital account payments are caught by this, and this appears to be tempting others into taking up these 'LLP acquisition' schemes under the impression that this will solve their problems.

[webberg]

Finance (No 2) Act 2017, Sch 11, para 2 (1).

In this Part of this schedule, "loan" includes
(a) any form of credit:
(b) a payment that is purported to be made by way of a loan

I am indeed aware of claims that the payment made is not within the definition of a loan or that the loan is no longer outstanding (at 17th March 2016) and as such is not within the definitions.

I have held off expressing my opinion of these situations in a public forum but I have covered this ground in our Big Group forum.

To date I've been wary of expressing what would have to be a necessarily brief opinion, without the benefit of detailed reasoning, because it leads to a lot of questions and misunderstandings (perhaps because I have explained poorly). I'll risk that however and cover some of the common issues that have cropped up.

Money that changes hands based on a signed document that has the words "loan agreement" are definitely in the definition.

Where money changes hands with that document around, but where the parties handling the funds are doing so outside the written terms, perhaps not a loan. (Not saying not taxable as income, but perhaps not a loan).

Where money changes hands and there is no loan agreement, you need to consider the intentions of the parties. In what capacity did each party pay/receive money? What were their expectations?

Where money changes hands and is said to be via a dividend or asset sale, did the shares/assets exist? Did the payer actually undertake the transaction? Prima facie, I would argue that in the absence of proof to the contrary, a dividend or proceeds from an asset sale are not within the "form of credit" phrase.

Where a loan is said to have been written off, I think you have to consider whether the loan was in a foreign currency or not.

If they were said to be in a foreign currency, then you need to convert that to sterling and deduct from it, repayments made in money.

A write off is not money and therefore probably does not count towards reducing the loan, perhaps to NIL.

Where the loan was in sterling and then is said to be written off or repaid (perhaps at a lower value), I think there is a better chance on it not being included, but it will very much depend on the circumstances.

That's where I am at the moment.

[nucastle]

Finance (No 2) Act 2017, Sch 11, para 2 (1).

In this Part of this schedule, "loan" includes
(a) any form of credit:
(b) a payment that is purported to be made by way of a loan

I am indeed aware of claims that the payment made is not within the definition of a loan or that the loan is no longer outstanding (at 17th March 2016) and as such is not within the definitions.

I have held off expressing my opinion of these situations in a public forum but I have covered this ground in our Big Group forum.

To date I've been wary of expressing what would have to be a necessarily brief opinion, without the benefit of detailed reasoning, because it leads to a lot of questions and misunderstandings (perhaps because I have explained poorly). I'll risk that however and cover some of the common issues that have cropped up.

Money that changes hands based on a signed document that has the words "loan agreement" are definitely in the definition.

Where money changes hands with that document around, but where the parties handling the funds are doing so outside the written terms, perhaps not a loan. (Not saying not taxable as income, but perhaps not a loan).

Where money changes hands and there is no loan agreement, you need to consider the intentions of the parties. In what capacity did each party pay/receive money? What were their expectations?

Where money changes hands and is said to be via a dividend or asset sale, did the shares/assets exist? Did the payer actually undertake the transaction? Prima facie, I would argue that in the absence of proof to the contrary, a dividend or proceeds from an asset sale are not within the "form of credit" phrase.

Where a loan is said to have been written off, I think you have to consider whether the loan was in a foreign currency or not.

If they were said to be in a foreign currency, then you need to convert that to sterling and deduct from it, repayments made in money.

A write off is not money and therefore probably does not count towards reducing the loan, perhaps to NIL.

Where the loan was in sterling and then is said to be written off or repaid (perhaps at a lower value), I think there is a better chance on it not being included, but it will very much depend on the circumstances.

That's where I am at the moment.

Appreciate this Webberg. Will pass this on and digest myself.

[webberg]

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[TheLodge]

Petition to stop Apr2019 Loan Charge

Nothing to lose in signing this and aiming for the 100,000 signatures.

I’d like to ask you to take a couple of minutes to sign the petition below. This relates to the 2019 Loan Charge seeks to historically tax a significant proportion of UK freelance workers for employment arrangements they used over the last twenty years. This is estimated to affect around 100,000 workers across all sectors

https://petition.parliament.uk/petitions/218582

[vips]

Any advice please

dear friends,

Can someone please tell me a good third party which I can use to settle the taxes with hmrc? I used AML for 4 years.. My bad..

regards

[webberg]

dear friends,

Can someone please tell me a good third party which I can use to settle the taxes with hmrc? I used AML for 4 years.. My bad..

regards

At risk of blowing my own trumpet, we can do that for you as can Phil at DSW.

The settlement process should be capable of being run by any adequately competent accountant or adviser and here I'm sure Google is your friend.

Decide where you need help, how much help you need and then talk to a few advisers.