What is the 2019 Loan Charge?

[Laxmi]

CLSO2

Loans are taxed in the years they were received.

Works out better for closed years, where there is no late payment interest.

For open years, the older the loans are, the more interest you'll have to pay.

Approximate interest on open years:

Tax Year __ Interest
2001/2 _____ 71.8%
2002/3 _____ 65.3%
2003/4 _____ 59.2%
2004/5 _____ 51.8%
2005/6 _____ 45.2%
2006/7 _____ 37.8%
2007/8 _____ 29.8%
2008/9 _____ 25.0%
2009/10 ____ 21.0%
2010/11 ____ 18.0%
2011/12 ____ 15.0%
2012/13 ____ 12.0%
2013/14 ____ 9.0%


LC19

All the loans are treated as taxable earnings in 2018/19.

Unlike CLSO2, there's no interest on open years.

The tax can be reduced by minimizing your other income in 2018/19, so that more of the loans fall into the nil or basic rate bands.

You can make pension contributions and get tax relief on the charge.

If the loans are over 150k does that reduce the 3 years of carry forward or just the final year ?
I think the interest rates above are not correct, 2008 7.5 range after 2009 if sent to 3 to 2.5 and it's simple interest not compound.

[Laxmi]

Clos2 vs LC

Ok, that changes my high level calculations then. So if you agree to settle under CLS02 you get interest added but you don’t under the Loan Charge, but could pay higher rate of tax (40 and 45% as opposed to 20 and 40%) is that right?

I guess there will be a fine line between the 2 on what our total liability is then?

You may still get interest charged if hmrc win the litigation side plus the LC does not close you e enquires.

Im Confused about NIC for Clos2, if The Schemes were self employed does the 6 Year limitation not Apply?

[Laxmi]

CLOS2

I wish settled with clos1, but I called the promoter who stated it didn't apply to self employed schemes.
I don't understand how hmrc can treat the settlements differently with one no IHT, with two IHT. IHT does not apply to income. So if it's income tax it as income, don't reclassify it to them charge IHT. I think it will depend on the type of trust.

I wonder how hmrc think they can target non residents with a new tax on a new source, unless they admit it's retrospective.

[Loan Ranger]

If the loans are over 150k does that reduce the 3 years of carry forward or just the final year ?
I think the interest rates above are not correct, 2008 7.5 range after 2009 if sent to 3 to 2.5 and it's simple interest not compound.

Just the final year.

The interest rates have been independently verified as being pretty accurate.

Eg. for a tax liability in 2007/8 of £10,000, the interest would be approx £2,980.

ps. I've posted updated interest rates, to include Feb 2018, here:
https://forums.contractoruk.com/hmrc...ml#post2532837

[Loan Ranger]

Im Confused about NIC for Clos2, if The Schemes were self employed does the 6 Year limitation not Apply?

I know of one person who is in the process of settling, and HMRC are insisting on voluntary restitution of the class 4 NICs for 2008/9 even though that year is statute barred.

[MyxALot]

You may still get interest charged if hmrc win the litigation side plus the LC does not close you e enquires.

Im Confused about NIC for Clos2, if The Schemes were self employed does the 6 Year limitation not Apply?

CLSO is extra-statutory. It's HMRC saying "pay us £x and we'll contractually agree to go away" (although as with all contracts, the devil is in the detail).

Therefore they can make the offer on any basis they choose and include/exclude any factors when deriving what x comes to. You get one decision: accept or refuse.

Attempting to get HMRC to apply legal and tax rules to this offer is fruitless, as they won't admit that they're in the wrong and have now got the LC to use as the 'coercer' in the deal.

Depending on what you believe, HMRC are either supremely confident they will be able to apply the LC to the 40,000+ or they are secretly sweating and praying that individuals take their dismal CLSO2 offer so that they don't spend the next 10 years in litigation with their errors on show for all to see.

[Realist]

https://en.wikipedia.org/wiki/Godwin%27s_law

I think you'll find Godwin's law relates to Hitler.

My reference was to the criminal Junta that ran Germany in the 1930's, 40's juxtaposed with the current criminal Junta that runs the UK in the present tense.

If that Junta decides to bankrupt me next year, it is going to cost them. Further I would encourage ALL to tweet Theresa May and inform her that if she goes ahead with her criminal actions then you will be rocking up to claim homelessness in her constituency and you will be pitching your tent on her lawn!

Never pay a bully, never give way or feel frightened of a bully. You have to make the bully frightened of you!


With the additional plans to attack contractors next year, this country stands to lose billions in lost contracts and work moving overseas. Large project will not be sustainable for companies that will have to hire and fire staff, unless the current Junta decide to do away with redundancy payments.

If people do not recognise a personal attack and stand up for themselves, then they can only count themselves as partially to blame for the resultant situation.

Also do not trust Big Group or any of their offshoots, they are just greedy lawyers, looking to cash in on your personal misfortune and resultant neurosis.

[regron]

I think you'll find Godwin's law relates to Hitler.

My reference was to the criminal Junta that ran Germany in the 1930's, 40's juxtaposed with the current criminal Junta that runs the UK in the present tense.

If that Junta decides to bankrupt me next year, it is going to cost them. Further I would encourage ALL to tweet Theresa May and inform her that if she goes ahead with her criminal actions then you will be rocking up to claim homelessness in her constituency and you will be pitching your tent on her lawn!

Never pay a bully, never give way or feel frightened of a bully. You have to make the bully frightened of you!


With the additional plans to attack contractors next year, this country stands to lose billions in lost contracts and work moving overseas. Large project will not be sustainable for companies that will have to hire and fire staff, unless the current Junta decide to do away with redundancy payments.

If people do not recognise a personal attack and stand up for themselves, then they can only count themselves as partially to blame for the resultant situation.

Also do not trust Big Group or any of their offshoots, they are just greedy lawyers, looking to cash in on your personal misfortune and resultant neurosis.

Clearly done your research then !!

[ConfusedEasily]

I think you'll find Godwin's law relates to Hitler.

My reference was to the criminal Junta that ran Germany in the 1930's, 40's juxtaposed with the current criminal Junta that runs the UK in the present tense.

If that Junta decides to bankrupt me next year, it is going to cost them. Further I would encourage ALL to tweet Theresa May and inform her that if she goes ahead with her criminal actions then you will be rocking up to claim homelessness in her constituency and you will be pitching your tent on her lawn!

Never pay a bully, never give way or feel frightened of a bully. You have to make the bully frightened of you!


With the additional plans to attack contractors next year, this country stands to lose billions in lost contracts and work moving overseas. Large project will not be sustainable for companies that will have to hire and fire staff, unless the current Junta decide to do away with redundancy payments.

If people do not recognise a personal attack and stand up for themselves, then they can only count themselves as partially to blame for the resultant situation.

Also do not trust Big Group or any of their offshoots, they are just greedy lawyers, looking to cash in on your personal misfortune and resultant neurosis.

Oh dear.
There are many on here that give their time for free and in the case of webberg appears to have done that consistently over the last four years. ILikeTax, again, has been generous with his time. They have offered hope and realism which has genuinely helped many.

Your call to arms, while laudable and slightly weird, will help no one, and yield nothing.,

[Cityampm]

Oh dear.
There are many on here that give their time for free and in the case of webberg appears to have done that consistently over the last four years. ILikeTax, again, has been generous with his time. They have offered hope and realism which has genuinely helped many.

Your call to arms, while laudable and slightly weird, will help no one, and yield nothing.,

Given his time for free?

Webberg has built his business off the back of our misery. Sowing seeds of confusion all the while. Now he’s advocating a strategy to help maintain his revenue stream from Big Group. He calls it an “Analysis” but what it really it is a con. It is highly likely that by following their “Analysis” you will be significantly worse off, all the while he collects his sweet sweet fees.

I agree. Do not trust them and their snake oil…