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Loan status if interest is charged and paid at year end

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    Loan status if interest is charged and paid at year end

    Need to check the details but I'm sure loans i have received have been subject to interest which is claimed at year end and stated on my P60. Whatever the amount does this still mean its an EBT loan and liable for tax? I originally thought it was only interest free loans that were being chased.... but then I'm a trusty type

    On my P11D for 14-15 for instance it states the loan amount , 5 figures, and also the amount left after interest charged, 3 figures, which is a lot less. This is all declared on the P11D which HMRC get a copy of so the loan has been declared,on the right form as a benefit, and open to HMRC so they can't claim it wasn't. Is that a reasonable and correct assumption ? Or is the same as everyone and I can still expect a tug at some stage ?

    I don't send of a SA form as HMRC told me a couple of years ago not to bother anymore unless something materially changed...which it hasn't. So the P11D and P60 is their record. I will look for good advice from a tax consultant when I can find a good one although there are a few locally to me in Basingstoke but just interested what the view is here ?
    Last edited by topgazza; 15 September 2015, 01:45.

    #2
    The issue is not whether the loans are interest bearing or not, but rather that the loan should be taxed as income (in HMRC's opinion).

    Consequently the fact that interest has been deducted at a commercial rate etc will be of little significance if HMRC can PROVE that it's really income from an employment.

    HMRC has not done that as yet. It looks like Murray Group litigation will not get them there either.

    However they have a number if reserve arguments to run (transfer of assets abroad looks like it's next out on the track) and again, whether the legal form is a loan or some other instrument, makes little difference.
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      #3
      Fair enough, thanks.

      It seems simple to me. They should change the law then. Obviously thats a massively complex thing to do given the huge number of companies that use the various schemes so I guess that why they haven't done it. But retrospective ?

      That just isn't right of course.....

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        #4
        Think you'll find you're pushing on open doors there.
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