What is the 2019 Loan Charge?

[DotasScandal]

Its worth trying to get HMRC on the phone and getting this squared

I would strongly advise against that.
If you think "getting them on the phone" will get anything "squared", you're in for lots of disillusions down the road.
At best, bod will give you erroneous information in good faith.
At worst, bod will make things up on the fly, not log your call, and if you try to refer to the conversation at a later time, HMRC will deny you ever called.

INSIST on everything IN WRITING.
You'll thank me later.

Remember how the "promoters" would be careful never to put anything legally bindind / compromising in e-mails or letters, always asking to go over things on the phone (cause that's "quicker", y'know) - so that there is never a trace and they can deny everything if things don't go in their favor?

Well, HMRC is similar - only 100x more dishonest.

[MrO666]

Its worth trying to get HMRC on the phone and getting this squared. Who knows what policy they may have in place, though - they may well have decided to put things on hold whilst they get the legislation through for 2019. The key to remember though is that the 2019 charge will push all of the "loan" income through the single year, which could put your partner into the highest tax bracket for those loan amounts (45%).. so its definitely worth updating your SA and sorting the loan income in the years they were received.

It does seem fairly unjust that HMRC would agree to the numbers and settlement and then refuse, especially as it was agreed months ago and HMRC's incompetence caused the delay.

With regards to the tax, the whole loan income was declared and agreed for the single tax year (12-13) so that's not an issue. This is where I'm confused, because if I've understood the planned HMRC approach correctly, then they won't receive a penny more than what has already been agreed, as the full loan value was declared within the relevant tax year.

The letter she received states that HMRC's approach to Schemes is under review and that no settlement can be made until that process is complete. It also states that the review may take a long time.

This is beyond crazy, she agreed to pay HMRC in full in a single payment 12 months ago, yet they have repeatedly failed to actually complete the process.

[DotasScandal]

All I can say is: welcome to our world!
You trust HMRC and play their little mind games at your own risk. The lot currently in charge of HMRC are textbook psychopaths - dishonest, unaccountable, and erratic. This is not your Grandpa's Revenue anymore.

[MrO666]

All I can say is: welcome to our world!
You trust HMRC and play their little mind games at your own risk. The lot currently in charge of HMRC are textbook psychopaths - dishonest, unaccountable, and erratic. This is not your Grandpa's Revenue anymore.

I've been through all of this before with my own scheme usage and settled everything without an issue.

I just can't understand why when a scheme user declares all loan values and agrees to pay tax, NI and interest on them, HMRC then decides that they won't bother actually taking them up on it......it's mental.

I guess one option open to her would be to amend her Self-Assessment to include the loans, then when they process it they will issue an updated tax bill (which will be the same as what HMRC have already agreed to....in writing) which she can then pay in full. That way when they start knocking again in the future, they can just be pointed at the amended SA and tax payment, which would then close it all down as there would be nothing outstanding (which could be confirmed via the letters she already has from HMRC).

Sound reasonable ?

Surely HMRC must more or less be at the point of meltdown.

[elpinar]

Apologies if this is the incorrect forum but here goes anyway......

My partner had agreed full settlement with HMRC regarding 12-13 loan scheme usage. She provided evidence to HMRC of the full loans received and then HMRC sent a letter confirming what the income tax and NI charge would be (plus interest). This has been ongoing for a year, as her accountant provided numbers and agreed to settle in February 2016.

She received another letter from HMRC at the start of Jan 2017 again asking if she would like to settle, to which her accountant responded saying yet again that yes, she would. Anyway, on Friday she received a letter from HMRC saying that they will now not settle as HMRC are reviewing how they deal with schemes.

So two questions:

1) Is it worth appealing and providing full evidence that she agreed to the numbers and to settle 12 months ago, and that it's entirely HMRC's incompetence which is the sole reason for this not having happened ?

2) I assume this new approach is in relation to the Loan Legislation which is on it's way. If so, then seeing as she has already declared the full loan value to HMRC, am I correct in thinking she wouldn't really have anything to fear anyway, as even when this full legislation comes into force all it will do is apply the full tax and NI charge to the total loan value, which is exactly what she had agreed anyway. So she should just put the money into a CTD and wait for the final bill.

Any ideas ?

Who did she deal with at hmrc.....I too have agreed a settlement and got sent a payment reference and a one page payment form with a date by which I have to pay it .....pm me if you want and we can talk if that helps as the person I dealt with said he would happily help others

[zimbtar]

Spotlight 36 - schemes claiming to avoid the new loan charge (14/02/17)

https://www.gov.uk/guidance/disguise...e-spotlight-36

More of the same..

[creativity]

So if I were to say have a low 'loan' amount due by 1st April 2019 (<£11k) and I were to take no salary or dividends during 18/19 tax year I wouldn't have to pay any tax at all on the loans - and get all the loans closed in the process?
If that's the case then that's what I'll do! Therefore:
<£11k loan = no charge
£43k = £6,400.
Approximate thresholds but you get the idea.
Therefore I will ensure I have enough savings for 12 months and withdraw zero dividends and zero salary for the appropriate tax year. Probably make the wife 100% shareholder for the year too.
Have I the right handle on this?
Not a bad deal for the lower earners, if they can survive a year with no salary or dividends...

[webberg]

That deals with the tax but how would you get the "loan closed"?

[creativity]

Good point - the loan wouldn't be closed, but the tax will be paid so or all intent and purposes that's the end of the saga.
Unless hmrc come back in 30 years time (or however long the original loan term is) for more (IHT?). But realistically its ended...

[creativity]

Also, from what I have read, HMRC will negate any APNs already paid.
Therefore if you've paid <~£11k (tax free threshold whatever that is for 2019) in APNs and you earned effectively nothing for the previous tax year, HMRC will have to refund your APNs as the total is less than your tax free allowance?
Is this correct? Sounds like a respite for those who currently have low loan amounts....