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What is the 2019 Loan Charge?

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    From Schedule 1 Finance (no 2) Bill, Part 2 para 4.

    For the purposes of (1)(i) the "relevant period" consists of the time of the relevant transaction, the time of the relevant step, the times around each of those two times, and any other times between those two times.

    Now aside from the grammar that makes me wince, what on earth does that mean and how should it be interpreted.

    A transaction usually takes place at one distinct time.

    A relevant step is likely to a very short period.

    "Times around each of those two times"? What?

    This whole schedule is an example of how HMRC is trying to make everything a vague as possible so that they can eventually "clarify" matters once that actually have a view about what they're trying to stop.

    Perhaps I'm particularly cynical this afternoon, but I find this lack of accuracy and lack of clear definition maddening.

    I was trained to believe that the rule of law was paramount because it was always accurate and clear and defined. Here we have one example (I could have picked many, many more) of a new way of writing law that leaves Civil Servants free to apply pretty much any interpretation they want to HMG policy.

    Quis custodiet ipsos custodies.

    Nobody it seems.
    Best Forum Adviser & Forum Personality of the Year 2018.

    (No, me neither).

    Comment


      Originally posted by webberg View Post
      From Schedule 1 Finance (no 2) Bill, Part 2 para 4.

      For the purposes of (1)(i) the "relevant period" consists of the time of the relevant transaction, the time of the relevant step, the times around each of those two times, and any other times between those two times.

      Now aside from the grammar that makes me wince, what on earth does that mean and how should it be interpreted.

      A transaction usually takes place at one distinct time.

      A relevant step is likely to a very short period.

      "Times around each of those two times"? What?

      This whole schedule is an example of how HMRC is trying to make everything a vague as possible so that they can eventually "clarify" matters once that actually have a view about what they're trying to stop.

      Perhaps I'm particularly cynical this afternoon, but I find this lack of accuracy and lack of clear definition maddening.

      I was trained to believe that the rule of law was paramount because it was always accurate and clear and defined. Here we have one example (I could have picked many, many more) of a new way of writing law that leaves Civil Servants free to apply pretty much any interpretation they want to HMG policy.

      Quis custodiet ipsos custodies.

      Nobody it seems.
      From Hansard this week...

      “In the past nine years, there have been 23 retroactive tax changes where there has been unfairness, error or unduly onerous taxation…..It is deeply unfair that people who…… find very large tax bills winging their way towards them”
      Jacob Rees-Mogg, (Con), NE Somerset

      “As a matter of principle, it is not the position of Her Majesty’s Treasury to apply tax changes retrospectively….”
      Mel Stride, Financial Secretary to the Treasury and Paymaster General

      Comment


        Originally posted by BrilloPad View Post
        From Hansard this week...

        “In the past nine years, there have been 23 retroactive tax changes where there has been unfairness, error or unduly onerous taxation…..It is deeply unfair that people who…… find very large tax bills winging their way towards them”
        Jacob Rees-Mogg, (Con), NE Somerset

        “As a matter of principle, it is not the position of Her Majesty’s Treasury to apply tax changes retrospectively….”
        Mel Stride, Financial Secretary to the Treasury and Paymaster General
        I was in the HoC to hear that exchange and had to be removed as apparently laughing hysterically and rolling around on the floor was disturbing the school parties there to learn about how democracy works.
        Best Forum Adviser & Forum Personality of the Year 2018.

        (No, me neither).

        Comment


          I bet there'll be a lot of people who don't report their loans, either deliberately or because they aren't aware of the charge.

          Comment


            Originally posted by stonehenge View Post
            I bet there'll be a lot of people who don't report their loans, either deliberately or because they aren't aware of this charge.
            Who can remember what happened 15 years ago?

            2 years ago I tried to get bank statements from 7 years ago. It is IMPOSSIBLE.

            Once 6 years has gone, HMRC are going to struggle....

            Comment


              Originally posted by BrilloPad View Post
              Who can remember what happened 15 years ago?

              2 years ago I tried to get bank statements from 7 years ago. It is IMPOSSIBLE.

              Once 6 years has gone, HMRC are going to struggle....
              Exactly.

              Beggars belief that HMRC are only now tackling schemes they've been investigating for nearly 2 decades.

              Comment


                Originally posted by stonehenge View Post
                I bet there'll be a lot of people who don't report their loans, either deliberately or because they aren't aware of the charge.
                What are the penalties for non-disclosure?

                Comment


                  Originally posted by webberg View Post
                  From Schedule 1 Finance (no 2) Bill, Part 2 para 4.

                  For the purposes of (1)(i) the "relevant period" consists of the time of the relevant transaction, the time of the relevant step, the times around each of those two times, and any other times between those two times.

                  Now aside from the grammar that makes me wince, what on earth does that mean and how should it be interpreted.
                  This is the close companies' gateway and so nothing to do with 99% of contractors. It is aimed at the super-rich and as I say, it's not going to be relevant to almost all contractors.

                  Originally posted by webberg View Post
                  A transaction usually takes place at one distinct time.
                  Yes

                  Originally posted by webberg View Post
                  A relevant step is likely to a very short period.
                  A relevant step is normally is discrete thing (like paying money) and doesn't happen over a period.

                  Originally posted by webberg View Post
                  "Times around each of those two times"? What?
                  The relevant step and relevant transaction must be carried out by two different people. So while they could both happen at the same time, they can also be separated by a lot of time.

                  The legislation here basically asks "were you trying to do anything dodgy when you did things?" The adding of "when you did things" limits the time that you have to consider that dodgy-ness. Otherwise, you might have to go back and ask whether you were doing something dodgy thirty years ago? So that's actually a helpful change compared to the draft Finance Bill.

                  Originally posted by webberg View Post
                  This whole schedule is an example of how HMRC is trying to make everything a vague as possible so that they can eventually "clarify" matters once that actually have a view about what they're trying to stop.
                  No, it is actually trying to be quite specific while covering a wide range of schemes that they know about and even more that they worry about. I think that the difficulty that HMRC have is trying to block tax avoidance schemes for people who ignore tax legislation is stupid. My personal view is that ever increasing perscriptive legisaltion (like the the close companies' gateway you quote) is not the way to go. It just doesn't work when interacting with other pieces of legislation that is even more complex.

                  Comment


                    Originally posted by Iliketax View Post
                    This is the close companies' gateway and so nothing to do with 99% of contractors. It is aimed at the super-rich and as I say, it's not going to be relevant to almost all contractors.
                    Have to disagree with this statement.

                    Most contractors finally left schemes and went back to limited companies.

                    The promoters followed and we have a lot of schemes that bounce payments between limited companies, one of which is close.
                    Best Forum Adviser & Forum Personality of the Year 2018.

                    (No, me neither).

                    Comment


                      Originally posted by starstruck View Post
                      What are the penalties for non-disclosure?
                      Death by overly convoluted tax legislation?

                      HMRC will declare the sentence to be retroactive so will use their time machine to kill you off 20 years ago.

                      Comment

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