What is the 2019 Loan Charge?

[DotasScandal]

Still waiting for some stats on contractor's earnings.

[AtW]

Still waiting for some stats on contractor's earnings.

"According to research by Professional Representation Network, the average annual earnings of the Top 100,000 contractors in the country is now approximately £80,000 per annum, compared to a national average income of £27,000."

Top contractors earning three times the UK’s national average wage | Onrec

£80k would be top 4%

[Tomo1971]

Can we not just pay the loans back at say £10 a week for the rest of our lives?

[dezze]

What is the 2019 Loan Charge?

"According to research by Professional Representation Network, the average annual earnings of the Top 100,000 contractors in the country is now approximately £80,000 per annum, compared to a national average income of £27,000."

Top contractors earning three times the UKâ€[emoji769]s national average wage | Onrec

£80k would be top 4%

Before of course Employer's NI, Pension, Holiday Pay, Sick Pay, Maternity Leave & Pay, Paid Expenses, Bonuses, Fees for running a business etc. Also, the permanent staff doing the same sort of work will generally be on a lot more than 27k.

[cliffordthedog]

Before of course Employer's NI, Pension, Holiday Pay, Sick Pay, Maternity Leave & Pay, Paid Expenses, Bonuses, Fees for running a business etc. Also, the permanent staff doing the same sort of work will generally be on a lot more than 27k.

It might be useful to start putting an estimate on the value of these benefits and costs.

One that has recently surprised me is the value of pension pots (Cash Equivalent Transfer Values) created by companies for their staff. Very large retail financial institution in the UK typically has a pot for £350k for someone in their mid forties earning £35k pa. Anyone who's been through a divorce know's how much these pension pots can dwarf other assets.

[DotasScandal]

It might be useful to start putting an estimate on the value of these benefits and costs.

One that has recently surprised me is the value of pension pots (Cash Equivalent Transfer Values) created by companies for their staff. Very large retail financial institution in the UK typically has a pot for £350k for someone in their mid forties earning £35k pa. Anyone who's been through a divorce know's how much these pension pots can dwarf other assets.

Precisely.
If we are to look at contractor realities, let's look at them in earnest.
No "1%"-themed soundbites or made-up HMRC-style smear.
We hear that Big Group has commissioned one of the Big Firms for just that.
Watch this space.

[steveb555]

Precisely.
..........Watch this space.

I keep nipping back to watch this space.....and other spaces in this forum, but its gone eerily quiet lately.

[dezze]

I think the conversation for many has moved to Big Group. For any caught up in it, I strongly recommend it.

[MrO666]

Loan Legislation

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 ?

[CDJ]

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 ?

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.