HMRC Consultation : Tackling Disguised Remuneration

[difficulttimes]

You can spend all day picking holes in this bs legislation. We all know as well that it will only be DOTAS schemes that will be targeted even though they say all. It will be too difficult to find the other ones and I'm pretty sure they won't be sticking their hand up. If it was that easy to pinpoint non-DOTAS schme users they would have picked this up with the AP legislation but they realised that this wouldn't be possible so let's go for the easy ones that declare it on their SATR. AP and only DOTAS schemes is the biggest farce with that stupid legislation and has been the cause of all those withdrawals.

[AtW]

Residency is determined by the years when the loans were received, even though the charge arises in tax year 2018/19.

I can't get my head around this one.

Why?

It's obvious that something like this is necessary as otherwise it would be a massive hole that would allow some people to come into this country, make lots of tax free money and then leave without any consequences.

I've read big part of the document, made a lot of sense to me, they've taken care of real innocents - people who are getting proper loan from employer to pay up front fees for stuff like season tickets.

[DonkeyRhubarb]

I know of quite a few non-DOTAS loan schemes where most users have been put under enquiry. Yes, they're harder to identify because there's no SRN on the return but HMRC haven't missed that many.

I bet HMRC are treating this as an opportunity to clobber people they couldn't hit with APNs.

[Tomo1971]

My (basic) understanding is that an APN can be applied against an open enquiry for (at the moment) a year where a DOTAS registered scheme was used.

The proposed legislation means that ANY outstanding loan you have, be it DOTAS, Non DOTAS (I think) that was received from 1999 onwards (from a contractor scheme) is now to be taxed, NI'd, charged Interest, IHT and whatever HMRC dream up before 2019.

So before, HMRC had to play (sort of) by the rules - they've now thrown that away and say any loan outstanding (from a contractor scheme) is now caught, from 1999 onwards.

I'm happy to be corrected as it will enhance my understanding....

Thank you all.

So, if my thinking is correct, as a user of these schemes, one would have paid tax and NI on a basic [PAYE] salary.

What HMRC is saying is due, is that tax and NI on the loan.

Therefore, If i were to add that years PAYE earnings to the loans for that year and work out the tax I would have paid if they had been true earnings and then take off the tax and NI that I did pay [on the PAYE element] - that should be what HMRC will chase me for?

[EBTContractor]

^ that's my understanding too

[dezze]

Something to be aware of - I think someone said that the loan amounts across the years are rolled into one, and taxed as if they were all paid out together. I don't know for sure if this is 18/19 or 19/20 - others will know better. Therefore, you don't calculate the tax year by year....unless I misunderstood.

[DonkeyRhubarb]

Something to be aware of - I think someone said that the loan amounts across the years are rolled into one, and taxed as if they were all paid out together. I don't know for sure if this is 18/19 or 19/20 - others will know better. Therefore, you don't calculate the tax year by year....unless I misunderstood.

Correct.

The charge is based on the total outstanding loans on 5/4/19 (the first day of the 2019/20 tax year).

The whole charge then falls in the previous tax year 2018/19.

[eek]

Correct.

The charge is based on the total outstanding loans on 5/4/19 (the first day of the 2019/20 tax year).

The whole charge then falls in the previous tax year 2018/19.

Ouch

[dezze]

Ouch

Yep - HMRC are really going all out to destroy many that will be impacted by this.

As an aside, are scheme promoters still pushing loan schemes? If they are, won't the scheme users automatically be caught?

[DotasScandal]

Yep - HMRC are really going all out to destroy many that will be impacted by this.

Kinda like using a nuclear bomb to crack an egg - quite in character for HMRC.
And why? because "someone" doesn't like contractors, and that "someone" liked even less that contractors did dare challenge their APNs (the nerve!).
And decided to throw his toys ouf of the pram.
It will be interesting to see how the Judiciary like these new "proposals".