What is the 2019 Loan Charge?

[Laxmi]

Twitter Activity

Hi all.
We tried this before to awaken some MPs to the injustice of Retro tax.
We're trying again, hopefully, this time we will have MPs doing their
research & voting to squash this injustice.
Please get onto twitter and help the good fight:

The list so far is:

@dotasscandal
@HMRCon
@Uk_Tax_Gone_Mad
@HMRCVictim
@lfcynwa1974
@NoToRetroTax
@apn_hater
@retrotaxobscene
@RuinedByRetro
@BeenGauked
@retrotaxvictim
@nearlybankrupt
@HMRobbinCs
@jujnjury


list of mps to add
MPs on Twitter: Information, statistics and analysis about the members of UK Parliament using Twitter

Hashtags to use
#noretrotax
#2019charge
#apn
#retrotax
#TaxAmnesty

If you're with WTT then follow the thread:
WTT Big Group › Forums › General Tax Discussion ->
twitter unofficial campaign/self help - spread the word

[webberg]

Re the above suggestions for a twitter campaign.

As a representative of WTT, can I make it clear that we are not organising or running this campaign via Twitter.

Whilst we are supportive of the motives behind the proposal, a public campaign such as this is not our preferred route to finding a resolution, on the basis that the inevitable uncoordinated nature of posts from many sources could lead to a loss of focus on the key messages that we consider are effective routes to that resolution.

We wish all those involved, (WTT clients, WTT Big Group members and others), the very best of luck in achieving their objectives, but this is an initiative that we cannot support at this time.

[BrilloPad]

Re the above suggestions for a twitter campaign.

As a representative of WTT, can I make it clear that we are not organising or running this campaign via Twitter.

Whilst we are supportive of the motives behind the proposal, a public campaign such as this is not our preferred route to finding a resolution, on the basis that the inevitable uncoordinated nature of posts from many sources could lead to a loss of focus on the key messages that we consider are effective routes to that resolution.

We wish all those involved, (WTT clients, WTT Big Group members and others), the very best of luck in achieving their objectives, but this is an initiative that we cannot support at this time.

[starstruck]

I'm aware from forums that 2019 loan charge will be PAYE and NI on total loan amounts all in one tax year. However I am trying to find the documentation that says that. Does anyone have a link?

I can only find this old document which says:

"Collecting tax on disguised remuneration payments
2.Many of the changes result in a charge being levied under Part 7A. In the majority of cases this means that the charge is collected through PAYE from the employer who was party to the avoidance scheme. NICs would also normally be collected from the employe
3.However, the government will amend the PAYE regulations to allow, where appropriate, for the tax and NICs to be collected from the employee where it cannot reasonably be collected from the employer. A consultation on these amendments will form part of the wider consultation over the summer."

https://www.gov.uk/government/public...technical-note

I assume there is a note out there somewhere that says it will be PAYE+NI via self-assessment. Or has the consultation happened already?

[webberg]

I'm aware from forums that 2019 loan charge will be PAYE and NI on total loan amounts all in one tax year. However I am trying to find the documentation that says that. Does anyone have a link?

I can only find this old document which says:

"Collecting tax on disguised remuneration payments
2.Many of the changes result in a charge being levied under Part 7A. In the majority of cases this means that the charge is collected through PAYE from the employer who was party to the avoidance scheme. NICs would also normally be collected from the employe
3.However, the government will amend the PAYE regulations to allow, where appropriate, for the tax and NICs to be collected from the employee where it cannot reasonably be collected from the employer. A consultation on these amendments will form part of the wider consultation over the summer."

https://www.gov.uk/government/public...technical-note

I assume there is a note out there somewhere that says it will be PAYE+NI via self-assessment. Or has the consultation happened already?

Consultation is over and we have law.

The law goes for a second reading in the House of Lords today and will go through the remaining stages (which are rubber stamping) pretty quickly.

Look at Sch 11 of the Finance Act 2017 - 2019.

[Iliketax]

3.However, the government will amend the PAYE regulations to allow, where appropriate, for the tax and NICs to be collected from the employee where it cannot reasonably be collected from the employer. A consultation on these amendments will form part of the wider consultation over the summer."

https://www.gov.uk/government/public...technical-note

I assume there is a note out there somewhere that says it will be PAYE+NI via self-assessment. Or has the consultation happened already?

After that note, HMRC published this one: https://www.gov.uk/government/public...chnical-update

This said:

5. Proposals on how the tax and NICs from a DR employment income charge will be collected from the appropriate person are not included in this technical update. There will be a technical consultation on the detail of those changes later in 2017.

That consultation has not happened yet and there are no draft PAYE regulations. So we are still waiting to see what the government chooses to do where (i) the employer no longer the exists, (ii) the employer cannot afford to pay it, and (iii) there is someone who could be regarded as the host employer that had nothing to do with the loan scheme.

[regron]

After that note, HMRC published this one: https://www.gov.uk/government/public...chnical-update

This said:



That consultation has not happened yet and there are no draft PAYE regulations. So we are still waiting to see what the government chooses to do where (i) the employer no longer the exists, (ii) the employer cannot afford to pay it, and (iii) there is someone who could be regarded as the host employer that had nothing to do with the loan scheme.

In a nutshell, they have f*****d up with the Rangers case and are now scrapping around, to try and re-write legislation to pass the buck to employees. That I keep hearing, will be hard to make happen. Here's hoping !!!! The game of chess continues !!!

[starstruck]

So when people say you can calculate your loan charge liability by taking total loans and working out PAYE and NI on them as if they were income in one year (added to any other income that year) - is that just an educated guess? It is talked about here as being a fact, which I was just trying to quickly verify, hence my quesiton. Might it end up being some other calculation?

[webberg]

The calculation may be as simple as you suggest but there are some potentially complicating factors.

For example, if you have £100 of unpaid loans, then will you be asked to pay tax/NIC on that £100 or will you instead be treated as having received £100 after tax/NIC? Big difference.

If this is a new tax on a new source, then what happens if you are non resident in 2018/19 and don't complete a return?

What happens if you have paid APNs?

As has been mentioned, we now have a rats nest of legislation, extra statutory offers, case law, legislation that will kick in later, technical consultations on PAYE regulations, etc.

[ChimpMaster]

I found this to be a really good read on the whole subject.

Part 7A Loan Charge – How will April 2019 affect your clients? – Part One | C3Insight

Some good examples on page 2 and some interesting points about the Employer paying PAYE and NICs on the loan value, but then the employee having to repay this to the employer within 90 days.