What is the 2019 Loan Charge?

[demby]

[QUOTE=bhand5;2403403]i've written to my local MP this evening in the hope that he can speak against this new "retrospective" legislation being made Law. it might be worth others doing the same? .....

Adapted your letter and sent to my MP

[difficulttimes]

Closure notice for loan charge?

Does anyone know if you have an open enquiry does the loan charge mean that this will be closed if you pay the tax and NI or regardless of paying it your enquiry will continue to remain open?

[DotasScandal]

i've written to my local MP this evening in the hope that he can speak against this new "retrospective" legislation being made Law. it might be worth others doing the same?

Sir Nicholas,

I've not written to my local MP before so i ask that you please excuse any lack of etiquette i might display in the following mail.

I have been working as an IT contractor for nearly 15 Years now within the financial services sector. In the beginning, i started out with a limited company but after a few years was advised by my accountant to take part in what is now deemed as a tax avoidance scheme.
At the time, i thought i was being clever by taking advise from my accountant who was advising me about these efficient tax planning methods but now i have come to learn that this was a huge mistake! With the new Finance bill that is due to be passed this summer (https://home.kpmg.com/uk/en/home/ins...ion-legis.html) i find my self in a situation where i'm liable for something like £180K come April 2019!
This will most likely cause me to lose my house through bankruptcy and prevent me from ever getting a job within the financial sector again.

I think that it's extremely unfair that new legislation can be passed that can retrospectively force people (some 40,000 affected i have read) to pay tax, penalty charges and interest on something that was considered a legal there before.

I understand that there is still a glimmer of hope to prevent this legislation from being passed by doing what i'm doing now (hoping that my local MP can lobby against this ludicrous change in law!).

I can see now with hindsight that i was silly to take part in these schemes but i'm apparently not alone (some 40k). In my defense, i was advised to do this by my accountant at the time (who i try not to blame as no one could have had the foresight that a new law would be passed that had retrospective consequences). However, i am aware of the PPI saga that's still ongoing with the banks and cant help but feel that this is a very similar situation but has no chance (with 40K people) getting the same kind of traction!

I am asking you to stand up for me and all the others that have been caught up in this debacle and put a case forward in the commons to put a stop to this retrospective law being passed. I absolutely agree that laws should be put in place to prevent schemes like this in the future but not to change the rules for people that thought they were doing things within the law at the time and retrospectively penalize.

I look forward to hearing back from you on this and to learn whether you will be standing against this new finance legislation that is due to be passed this summer.

Good effort, but ultimately you'll find that all they do is "forward your concerns to the Treasury". Maybe down the line you'll receive a response from David Gauke, kindly forwarded by your MP, lecturing you how you should be paying you "fair share" like those "honest taxpayers" who know their place and do not indulge in a game reserved for the rich.
At the end of the day, ALL MPs wash their hands of us.
Ask any member of NTRT or Big Group if you're unsure.

[DotasScandal]

Cornering them at their surgery, however, is another matter, and a better use of your time.
More difficult to dismiss someone looking them in the eye.
Been saying this since 2013, and I haven't changed my mind.

[webberg]

Does anyone know if you have an open enquiry does the loan charge mean that this will be closed if you pay the tax and NI or regardless of paying it your enquiry will continue to remain open?

It will remain open.

[webberg]

Good effort, but ultimately you'll find that all they do is "forward your concerns to the Treasury". Maybe down the line you'll receive a response from David Gauke, kindly forwarded by your MP, lecturing you how you should be paying you "fair share" like those "honest taxpayers" who know their place and do not indulge in a game reserved for the rich.
At the end of the day, ALL MPs wash their hands of us.
Ask any member of NTRT or Big Group if you're unsure.

I would not necessarily agree with the above.

We now have a stable of around 30 MPs who we regularly communicate with and via whose offices we are meeting with the senior executive of HMRC in a few weeks' time.

MPs do get the Teflon brush off from HMRC so you have to persist beyond that by going back and knocking down their (deliberate?) attempts to mislead the MP.

[difficulttimes]

Settlement v 2019 charge

It will remain open.

That's what I thought - so the debate of settling v 2019 charge is somewhat trivial if your enquiry will continue to remain open and they (HMRC) will push for it to be taxed in the year it was raised? Not sure how that would work though if you have paid an APN, then paid extra for the 2019 year and then may have to pay more for interest accured but then your loan charge is against the 18/19 year and not the year you benefited from the loan? If it isn't closed then we will continue to have more years of uncertainty...

[swamp]

Settlement with HMRC and writing off of loans before 2019 charge will result in enquiry being closed and no loan charge applying.

It may result in future IHT charge in some cases though.

Plus the settlement terms offered by HMRC are poor at best right now.

[webberg]

Settlement with HMRC and writing off of loans before 2019 charge will result in enquiry being closed and no loan charge applying.

It may result in future IHT charge in some cases though.

Plus the settlement terms offered by HMRC are poor at best right now.

Settlement with HMRC should result in no 2019 tax charge although reading the legislation here does not make that crystal clear.

Writing off the loan is not necessary and in some cases may produce a further tax charge.

If you want to settle, then I would suggest leaving the loan as it is until after 5/4/19.

[Silverskin]

My understanding at the moment is as follows. (And is subject to an ongoing discussion with HMRC).

Loans will be charged to the tax in 2019 unless:

1. They have been repaid in cash and the money has not been returned to you.

2. They were included in a CLSO (not an informal settlement, but the CLSO extra statutory agreement)

3. A loan release after 5/4/19 may attract a further charge - although I've not managed to get HMRC to explain how.

Hi,
I find point 1 intriguing. If the loan is repaid why is it not acceptable that, that money is returned to the borrower provided that the relevant tax is paid on that distribution/income? HMRC can't be suggesting that people pay the loan back and walk away as clearly no-one would do it. There has to be an implicit understanding that those funds could be distributed assuming this is done legally otherwise there is no incentive to pay the loan back. If the beneficiaries choose to distribute the funds to the original borrower why are they not permitted to do this, provided that these distributions are taxed and further tax avoidance mechanisms are not being employed?

Thanks