AML 2019 Loan Charge

[SymonA]

Hi all,
It's my first post on the forum but I managed to go through the most of the pages in this topic and I must say I haven't realised before the scale of this case ;O
I was part of the AML scheme for 3 years, first with AML (via Unified Solutions) and then with Smartpay.
I received the "standard" email about the Loan Charge and the Settlement and was about to sign up to use PTS services on Monday. After all I was ready to accept the fact that all in all - I earned the money and didn't pay tax. I do feel mislead by AML but I simply felt hopeless and didn't see any other alternatives.
I had this hesitation moment and I thought to myself - there must be other people out there having the same problem. I was shocked when came across this forum and read all the posts.

I registered myself to LCAG and want to hear all the options I've got including Big Group - not sure what's their strategy other than they don't recommend settling with HMRC.
One thing I know - I don't want to deal with AML anymore so even if I go for the settlement, I don't want to use PTS services.

Therefore, Mr. @webberg, could you please PM me so I can contact you and discuss the options?

[Boydskeet79]

I managed to get my breakdown per year by emailing

enquiries@khtlimited.com

I was with AML and Knox House Trust. I didn't pay a penny!

Thanks, I'll give that a go.

[rshome]

Thank you, your advice and help is truly appreciated.

Now I just need to get AML to cough up the information without charging me £750! I seem to be going in circles, I ask AML and they say Knox House has the info. I ask Knox House and they say PTS has it. PTS say they need to get it from AML and that will cost me £750!!

They have confirmed my total loan amount, but refuse to give me the breakdown by tax year unless I cough up the money. Could I just put all the loans in one financial year (I was in the scheme for 12 months over two years) in settling with HMRC? I know that might mean paying more tax, but I'd rather pay more tax than give PTS £750.

I managed to get my breakdown per year by emailing

enquiries@khtlimited.com

I was with AML and Knox House Trust. I didn't pay a penny!

[webberg]

Thank you, your advice and help is truly appreciated.

Now I just need to get AML to cough up the information without charging me £750! I seem to be going in circles, I ask AML and they say Knox House has the info. I ask Knox House and they say PTS has it. PTS say they need to get it from AML and that will cost me £750!!

They have confirmed my total loan amount, but refuse to give me the breakdown by tax year unless I cough up the money. Could I just put all the loans in one financial year (I was in the scheme for 12 months over two years) in settling with HMRC? I know that might mean paying more tax, but I'd rather pay more tax than give PTS £750.

If you have the gross and you know when you worked via that scheme and at what day rate or whatever, it should be simple enough to backsolve to get a decent guess at annual amounts.

HMRC will not be too fussed about the annual allocation so long as they get the gross.

Give me the above data and I'll do it for you for 10% of the fee you've been quoted

(Joking - you can do it yourself for nothing except 30 minutes of time).

[Boydskeet79]

Thank you, your advice and help is truly appreciated.

Now I just need to get AML to cough up the information without charging me £750! I seem to be going in circles, I ask AML and they say Knox House has the info. I ask Knox House and they say PTS has it. PTS say they need to get it from AML and that will cost me £750!!

They have confirmed my total loan amount, but refuse to give me the breakdown by tax year unless I cough up the money. Could I just put all the loans in one financial year (I was in the scheme for 12 months over two years) in settling with HMRC? I know that might mean paying more tax, but I'd rather pay more tax than give PTS £750.

[webberg]

OK that explains things a lot clearer and now makes sense in my head, thank you.

I guess my big fear though, is can AML / Knox House / whoever now turn round and say they want the £700 loan repaid?!

I have no issue paying the tax now due on the loan. Bit scandalous that HMRC can change laws and back date them, but that is what it is and I'm relatively OK with paying the tax. But I now fear getting a request to repay the loan and getting a double whammy.

I'm not a lawyer and I cannot say therefore if the loan is enforceable.

We have in the past used a law firm to resist demands for repayment from our clients (not AML users) and I suspect that there are a lot of grounds - legal- moral- reputation- etc on which repayment can be challenged.

It is a fact that many lenders will agree to write off loans if you settle with HMRC (because it removes the risk that they might be liable for the tax?). You will need to ask AML.

Unfortunately there are firms around who are looking for outrageous fees for this simple act (because you the borrower are between a rock and a hard place and have limited choices) or who have tried to wash their hands (on the surface at least) of any connections.

You will not know until you ask.

[Boydskeet79]

Unfortunately you have this sequence mixed up.

You were an employee/partner/worker for AML.

AML hired your services to the end client.

AML invoiced the end client for the work done and received say £1,000.

AML paid you a small amount, say £100, kept £200 as a fee and contributed the rest (allegedly) to a trust.

The trust loaned you say £700.

So you received £800 before tax in the form of £100 of salary and £700 loan.

You have not repaid that loan.

If you do, then the trust has £700 of cash. Depending on the terms of the trust, they can distribute that cash to you (taxable) or hold it to your name (taxable) or reinvest it in your name (taxable).

OK that explains things a lot clearer and now makes sense in my head, thank you.

I guess my big fear though, is can AML / Knox House / whoever now turn round and say they want the £700 loan repaid?!

I have no issue paying the tax now due on the loan. Bit scandalous that HMRC can change laws and back date them, but that is what it is and I'm relatively OK with paying the tax. But I now fear getting a request to repay the loan and getting a double whammy.

[webberg]

I've tried reading through all the posts on this thread and there is some great information. But one question that still remains in my mind is, why are my loans considered outstanding?

In my very simple brain, if AML (or the trustee) loaned me £1,000 and then I paid AML (or the trustee) £1,000 via my agency, how do I owe AML £1,000? What did they do with the £1,000 if they didn't use it to pay off my loan? They certainly didn't loan me anymore money than they received via the agency, so how do I have outstanding loans?

I was with AML for around 18 months in 2008/9 and I'm shocked to realise (huge naiveity on my part) that I still have outstanding loans with them and as such am subject to the loan charge.

Unfortunately you have this sequence mixed up.

You were an employee/partner/worker for AML.

AML hired your services to the end client.

AML invoiced the end client for the work done and received say £1,000.

AML paid you a small amount, say £100, kept £200 as a fee and contributed the rest (allegedly) to a trust.

The trust loaned you say £700.

So you received £800 before tax in the form of £100 of salary and £700 loan.

You have not repaid that loan.

If you do, then the trust has £700 of cash. Depending on the terms of the trust, they can distribute that cash to you (taxable) or hold it to your name (taxable) or reinvest it in your name (taxable).

[WTFH]

So they basically took the £1k, used it for whatever they wanted and left me with a £1k loan? So on paper, they get paid £2k (£1k from agency and outstanding loan of £1k) for the £1k loan?!

And yea, if I could just pay 5% off the loan value to have it written off, why would we all not do that? As then the loan wouldn't be outstanding and HMRC couldn't ask for back dated tax.

Basically, they took £1k of untaxed income off you, then a different company - the Trust - lent you about £850, on which you paid no (or very little) tax. What you were probably told at the time was that you would never have to repay the loan, so they wouldn't end up with £1,850.
So, that's what AML/Smartpay/Knox House did

From HMRC's point of view, you received money which was disguised income on which you paid no tax on (or very little). They would now like their tax for that money.

I think you need to speak to a professional on this.

[Boydskeet79]

The flow of money was Agency - AML - Trustees (in a EBT) - You (as a loan) , you paid no tax on the money from the trustees as it was a loan, if they tried to get you to pay back the loan you would probably win a legal fight , hence why they are willing to write off the loan for 5% of its value.

So they basically took the £1k, used it for whatever they wanted and left me with a £1k loan? So on paper, they get paid £2k (£1k from agency and outstanding loan of £1k) for the £1k loan?!

And yea, if I could just pay 5% off the loan value to have it written off, why would we all not do that? As then the loan wouldn't be outstanding and HMRC couldn't ask for back dated tax.