New Finance Bill 2017-18

[regron]

Not going to even try and interpret this and what it means for schemes, the loan charge and how they plan on circumventing the SC decision on Rangers !

https://www.gov.uk/government/public...lanatory-notes

https://publications.parliament.uk/p...0134/18134.pdf

[webberg]

Schedule 1, part 5, para 13 (c)

Pure, unadulterated retrospection.

[Iliketax]

Not going to even try and interpret this and what it means for schemes, the loan charge and how they plan on circumventing the SC decision on Rangers !

https://www.gov.uk/government/public...lanatory-notes

https://publications.parliament.uk/p...0134/18134.pdf

1. Close companies' gateway applies from 6 April 2018. Complicated. Gives a new answer to those people who ask if their company can lend their warchest to another company that they own for a BTL. That answer is PAYE / NIC when the BTL is bought. Please don't ask why as there is no real logic to it. That's just the way it is. Think of it as a new general anti-avoidance rule.

2. Information on April 2019 loan charge. You need to give HMRC war and peace by October 2019. Same for self-employed. Lender now has an obligation to give you information within 30 days (but no penalties or anything if it doesn't).

3. Redirected earnings. The technical note says the fancy idea that Rangers stops anything is just not right and this makes it clear.

4. End user not responsible for PAYE on April 2019 loan charge.

There's also a technical note that confirms employees don't have to pay NIC if employer can't pay. But that employees will have to pay tax (either by self-assessment or because there is a reg 81 direction).

So pretty much as expected.

[regron]

2018 = Let the fun and games commence !!!

[luxCon]

1

2. Information on April 2019 loan charge. You need to give HMRC war and peace by October 2019. Same for self-employed. Lender now has an obligation to give you information within 30 days (but no penalties or anything if it doesn't).


4. End user not responsible for PAYE on April 2019 loan charge.

There's also a technical note that confirms employees don't have to pay NIC if employer can't pay. But that employees will have to pay tax (either by self-assessment or because there is a reg 81 direction).

Iliketax,
Thanks for the post.


- Could you kindly clarify who the End User on point 4. above is? If its us the person who got the loan from Trustee what does "End user not responsible for PAYE " mean?


- On point 2 above, Say come October 2019 we have to provide details of any loan on Self Assessment?

If so does tax liability then get calculated as part of the 18/19 tax year?
If so, say I have loans totaling 200k over 4 years pre-2011. Will HMRC calculate tax at the Additional Rate tax rate (45% over 150k for 2018) on my 200k loan plus whatever else income on that tax year above the 150k Additional Rate?

Thanks

[ChimpMaster]

Trying to make sense of this is like trying to learn an alien language.

Can anyone summarise how the loan charge will work in practise? i.e. who is responsible for reporting what? Is reporting via Self Assessment or will HMRC write to individuals? etc.

[BrilloPad]

Trying to make sense of this is like trying to learn an alien language.

Can anyone summarise how the loan charge will work in practise? i.e. who is responsible for reporting what? Is reporting via Self Assessment or will HMRC write to individuals? etc.

HMRC will make up the rules as they go along.....

[webberg]

Trying to make sense of this is like trying to learn an alien language.

Can anyone summarise how the loan charge will work in practise? i.e. who is responsible for reporting what? Is reporting via Self Assessment or will HMRC write to individuals? etc.

I think you need to allow a little time to digest this?

[ConfusedEasily]

1. Close companies' gateway applies from 6 April 2018. Complicated. Gives a new answer to those people who ask if their company can lend their warchest to another company that they own for a BTL. That answer is PAYE / NIC when the BTL is bought. Please don't ask why as there is no real logic to it. That's just the way it is. Think of it as a new general anti-avoidance rule.

2. Information on April 2019 loan charge. You need to give HMRC war and peace by October 2019. Same for self-employed. Lender now has an obligation to give you information within 30 days (but no penalties or anything if it doesn't).

3. Redirected earnings. The technical note says the fancy idea that Rangers stops anything is just not right and this makes it clear.

4. End user not responsible for PAYE on April 2019 loan charge.

There's also a technical note that confirms employees don't have to pay NIC if employer can't pay. But that employees will have to pay tax (either by self-assessment or because there is a reg 81 direction).

So pretty much as expected.

It says:

The government has therefore introduced legislation in Finance Bill 2017-18 which prevents section 689 from placing the liability to pay the loan charge onto the UK end client or intermediary where the employer is offshore. Section 689 will not apply to require a UK entity to operate PAYE in respect of the loan charge.

What is your Scheme provider was based in the UK, paid you from the UK and paid loans from the UK. And gave you a contract from the UK?

[Iliketax]

Could you kindly clarify who the End User on point 4. above is? If its us the person who got the loan from Trustee what does "End user not responsible for PAYE " mean?

Easiest to explain with an example: You update a bank's IT. The bank pays an agent. The agent pays an offshore employer. The offshore employer pays money to a trust. The trust lends money to you. By end user, I meant the bank.

- On point 2 above, Say come October 2019 we have to provide details of any loan on Self Assessment?

You would do self-assessment as normal and the income would be included in 2018/19 tax year. In addition to that, you'd have to fill in a separate form that sets out lots of details about you, your scheme and the loans. It is this separate return that is new.

If so does tax liability then get calculated as part of the 18/19 tax year?

Yes

If so, say I have loans totaling 200k over 4 years pre-2011. Will HMRC calculate tax at the Additional Rate tax rate (45% over 150k for 2018) on my 200k loan plus whatever else income on that tax year above the 150k Additional Rate?

Yes. Although as it is self-assessment, you will have to calculate and pay that tax.