Settling is more expensive that paying the 2019 loan charge

[Silverskin]

There is no real magic in the numbers...

Thanks very much for this information. So as a general rule of thumb it sounds like closed years should probably be settled in the 2018/19 loan charge whereas older open years would likely benefit from settlement whereas more recent open years may not. All depends on the calculation of course. Part of the issue will be having all the tax return information dating back 17 years.

[Silverskin]

....

First calculate the tax/NIC position for the open years assuming interest will be applied from the due date (31st January following year end) to the date of settlement.

Do we know what the interest rate would be applied and whether it's compounded?

[jbryce]

I have been watching and reading this forum for many years now and have decided it was time to come out in the open and give a little bit of advice to all those considering making settlement under the new Disguised Remuneration Rules.

So, let me get this straight, you have been watching this forum for many years yet this is the first time you've felt an urge to reply?

This, like the rest of your post, does not ring true.

Sorry - Mr. redcode - you'll need to try a little harder.

[Silverskin]

Open = a year for which HMRC have sent you an enquiry or discovery assessment
Closed = HMRC haven't enquired within 1 year of receiving your self assessment and the year is now beyond the 4 year discovery window

If you don't know which years are open or closed, you can find out by submitting a SAR (subject access request) here: https://online.hmrc.gov.uk/shortforms/form/DPU_SAR

Thanks. In terms of the SAR am I effectively filling in Part C, requesting to know if I currently have any open years assigned to me? Presumably a given year can only be one or the other?

[webberg]

Do we know what the interest rate would be applied and whether it's compounded?

Presently 2.75% (last changed from 3% in August last year).

No compounding.

[Silverskin]

Fixed rate?

Presently 2.75% (last changed from 3% in August last year).

No compounding.

Thanks Webberg. Does the rate vary year on year or are you saying that it's 2.75% for every year the loan has been outstanding?

[webberg]

Thanks Webberg. Does the rate vary year on year or are you saying that it's 2.75% for every year the loan has been outstanding?

It's 2.75% now and has been since August last.

Prior to that it was 3% for a long time (early 2009?)

https://www.gov.uk/government/public...interest-rates

[Silverskin]

It's 2.75% now and has been since August last.

Prior to that it was 3% for a long time (early 2009?)

https://www.gov.uk/government/public...interest-rates

Thanks. Crikey, are you saying that for loans dating back to 2000 (as an example) you'd be looking at year on year interest being accrued at a rate of between 5.5% and 8.5% for the period 2000 and 2009?!!

If that's the case it's hard to see how settling any pre-2009 loans would be the right thing to do.

[Silverskin]

Thanks. Crikey, are you saying that for loans dating back to 2000 (as an example) you'd be looking at year on year interest being accrued at a rate of between 5.5% and 8.5% for the period 2000 and 2009?!!

If that's the case it's hard to see how settling any pre-2009 loans would be the right thing to do.

Well that was a conversation stopper! Is there any confirmation/clarification that taking the loan charge definitely avoids interest? I guess in principle if you're effectively treating the consolidated loans as income in the 2018-19 tax year it would make sense that interest wouldn't be applied. But how sure are we about that?

Cheers

[Jarzinhio]

Question for webberg

It's 2.75% now and has been since August last.

Prior to that it was 3% for a long time (early 2009?)

https://www.gov.uk/government/public...interest-rates

Hi webberg

I can't find your previous post now but you said there maybe a chance that HMRC will ignore closed years or was it closed years prior to a certain date? You said it was difficult but not impossible.

I have 12 years so looks like only option at the moment. So I have assessments for under appeal for 08/09, 09/10, 10/11, 11/12 and 12/13 all under appeal. So these count as Open. I also have the years before that which beginning at 03/04,04/05,05/06,06/07,07/08. So I assume HMRC will come for these at 2019 or maybe they wouldn't? Also I have 13/14, 14/15, 15/16 and 16/17 which they have not come for yet. Do you think if I said to them I'll settle the five years under appeal they'd call it quits and say "that's it we won't assess any further only years after 2017 ?" They won't will they as they'll ask the question if I have any other years and if I say no and then it would be blatant lying which would catch up with me in the end I assume!