What is the 2019 Loan Charge?

[BrilloPad]

Death by overly convoluted tax legislation?

HMRC will declare the sentence to be retroactive so will use their time machine to kill you off 20 years ago.

One should follow commandment 11. Do not get caught.

[Iliketax]

Have to disagree with this statement.

Most contractors finally left schemes and went back to limited companies.

The promoters followed and we have a lot of schemes that bounce payments between limited companies, one of which is close.

You see more contractor schemes than I do. But the ones I've seen are, in my opinion, slam-dunk in the original disguised remuneration rules. The ones that I've seen that I do not think are is where the loan that is taken is so large that it clearly has nothing to do with an employment.

But if you are going to have to get to grips with the close companies' gateway, good luck. It is the hardest "gateway" into a piece of legislation that I know.

[BrilloPad]

You see more contractor schemes than I do. But the ones I've seen are, in my opinion, slam-dunk in the original disguised remuneration rules. The ones that I've seen that I do not think are is where the loan that is taken is so large that it clearly has nothing to do with an employment.

But if you are going to have to get to grips with the close companies' gateway, good luck. It is the hardest "gateway" into a piece of legislation that I know.

IMO WTT/BG are going to see many more schemes coming up each year.

[Iliketax]

What are the penalties for non-disclosure?

Specific ones? Have a look at 35F and 35G https://publications.parliament.uk/p...7.htm#sch1-pt4

And then there are the normal self-assessment ones for not doing your tax return properly, not paying the tax due on time, deliberately withholding information, etc: https://www.rossmartin.co.uk/penalti...t-from-201011(

If the tax on which the penalties are based is more than £25,000 you can also get your name in the newspaper of your choice (plus others as well): https://www.gov.uk/government/public...tax-defaulters

[Iliketax]

IMO WTT/BG are going to see many more schemes coming up each year.

I guess I'm going to be seeing more GAAR Advisory Panel opinions and more GAAR penalties then. Anyone who takes part in contractor schemes is nowadays is going to be completely stuffed.

[BrilloPad]

I guess I'm going to be seeing more GAAR Advisory Panel opinions and more GAAR penalties then. Anyone who takes part in contractor schemes is nowadays is going to be completely stuffed.

Last Saturday night I got a call from someone using schemes until a month ago. I have helped quite a few over the years, particularly montpelier people.

I was asleep. Withheld number. Refused to give name, even their CUK username.

I asked them to call back tomorrow. "I might not be here tomorrow". Took me 40 minutes to chat.

Now I know other people have got issues. However I have 2 disabled kids. And other issues too.

When I found out he was meeting webberg on Monday I told him to do whatever webberg said. Even where I disagreed with one piece of advice.

After taking advice (many thanks to the mod - you know who you are) I have decided to advise anyone using schemes since 2008 to go the WTT/BG.

CUK does a huge amount of unpaid work to notify people to the dangers. Which should be done by HMRC(IMO).

However some people cannot be helped. Its a great pity. Which sums up my problem. I am just way too nice. I need to find some sort of training to make me a nastier person.

[webberg]

Last Saturday night I got a call from someone using schemes until a month ago. I have helped quite a few over the years, particularly montpelier people.

I was asleep. Withheld number. Refused to give name, even their CUK username.

I asked them to call back tomorrow. "I might not be here tomorrow". Took me 40 minutes to chat.

Now I know other people have got issues. However I have 2 disabled kids. And other issues too.

When I found out he was meeting webberg on Monday I told him to do whatever webberg said. Even where I disagreed with one piece of advice.

After taking advice (many thanks to the mod - you know who you are) I have decided to advise anyone using schemes since 2008 to go the WTT/BG.

CUK does a huge amount of unpaid work to notify people to the dangers. Which should be done by HMRC(IMO).

However some people cannot be helped. Its a great pity. Which sums up my problem. I am just way too nice. I need to find some sort of training to make me a nastier person.

Thank you for the vote of confidence. I think I may have met the gentleman concerned and if it's the same person, we are guiding him towards the HMRC settlement plan. Not my first choice, but any other route will remove what remains of his self esteem.

[webberg]

You see more contractor schemes than I do. But the ones I've seen are, in my opinion, slam-dunk in the original disguised remuneration rules. The ones that I've seen that I do not think are is where the loan that is taken is so large that it clearly has nothing to do with an employment.

But if you are going to have to get to grips with the close companies' gateway, good luck. It is the hardest "gateway" into a piece of legislation that I know.

Sorry - second thoughts.

I remain concerned.

[Iliketax]

However, I then put it alongside a series of enquiries from HMRC on arrangements in which a contractor who owns his own company is supplied to a client by another (offshore) company. Invoiced funds go into Own Co and are then paid to offshore service co. Offshore co, via a trust or other mechanism, lends money to contractor. We call these double limiteds.

From what you have said, if the contractor is an employee then there is a connection to her employment with "Own Co" and so that seems to mean that the lender is P and so the employee DR rules apply. You don't need the close companies' gateway to tax that loan. HMRC also has GAAR and that's a much more powerful tool for them.

In this area, I think HMRC are still smarting from their failure to win in Arctic Systems and this legislation could be another means to plug that perceived gap.

I can't see how the close companies' gateway is trying to get around Arctic Systems. If the government wanted to do, there are lots of easier ways.

Arguably the HMRC policy and track they set out on in 2000 with Rangers and which has now been abandoned in favour of the DR charge (without being announced)

2000? That was before Dextra was even at the special commissioners. The Inland Revenue did not have any public policy or "track" in 2000 on loan schemes.

The December 2010 changes were (almost) all about prospective loan schemes. That was very well publicised at the time. So there is nothing hidden when DR came in. The March 2016 changes were all about old loans. Again, that was well publicised. So I'm confused about what you mean by "without being announced".

[nobody123]

What about schemes that weren’t loan orientated? E.g receiving dividend via a trust.

I assume you don’t need to mention this in your tax return as they are simply not Loans...