AML 2019 Loan Charge

[falling apart]

Is anyone on here aware of the Loan Charge Action Group?

[THISISWRONG]

Feeling lost

Hi, I have been following this for some time, having previously used AML on and off over an 18 month period.
I have had no enquiry from HMRC. My accountant introduced me to AML and I took his advise and that of AML in taking the planning.
I have a few queries:

1. Is nobody actively trying to get this law changed or blocked with a legal challenge? is there any hope?????

2. What is the likely % of tax you have to pay?
I have noted one person saying he earned £400/day for 18 months, which is circa £140k who paid £33k in tax, which seems pretty good and I can afford to pay if it circa 25%. But having spoken to PWC I have been told to expect a tax payment of circa 65% - i cant afford this!

3. At the time, I could have taken the money as a Dividend and paid circa 30% tax. My accountant introduced AML, who advised me on the planning as being 100%. Im not a risk taker and would never have done this if the risk was high. If I could unwind the planning, pay the money and draw it as a dividend, I would.
A tax advisory firm said they would argue this point with HMRC and try to negotiate I pay the tax at a dividend rate in the year I took the money (over 6 years ago).
Is this possible?

4. I believe AML lied to me. My accountant has documented it also. Is AML insured, possibly professional indemnity, so that a case can be brought against them?
PWC have said the planning they did for me in 2010/11 should never have been recommended.

5. If this is going back 20 years, there are clearly going to be people who have no idea about this and aren't going to come forward.
How can HMRC find out about them and pursue them?

6. I did 2 types of planning with AML. AML have said that only 1 is caught, and Council opinion is the other planning in 2010 is not caught.
Should I trust this?

I would like to speak WTT and any other advisor who has experience.
PWC want a huge fee to deal with this and all I think they will do is the minimum to gain a fee.

I cant PM them, as I haven't the priveledges - so if anybody can PM with pointers that would be greatly appreciated.

[ColTigh]

OK, so following some discussions with an accountant on the phone over the weekend, I have been left a little confused by the whole process. I am hoping to speak to other accountants this week, but in the meantime can anyone explain in simple terms the difference between choosing to settle with HMRC and the Loan Charge option?

I assume the former is a method to pay back the amount over an agreed timeframe, whereas the latter is the HMRC approach to garnishing PAYE payments from April 2019. However, hope someone can explain in clearer terms.

Again - apologies for asking a naive question.

[LOL17]

OK, so following some discussions with an accountant on the phone over the weekend, I have been left a little confused by the whole process. I am hoping to speak to other accountants this week, but in the meantime can anyone explain in simple terms the difference between choosing to settle with HMRC and the Loan Charge option?

I assume the former is a method to pay back the amount over an agreed timeframe, whereas the latter is the HMRC approach to garnishing PAYE payments from April 2019. However, hope someone can explain in clearer terms.

Again - apologies for asking a naive question.

My understanding is that if you choose to settle the loans are treated as income in the tax year you received them. However, if you opt for the loan charge all the loans will be lobbed into the current tax year which means you'll almost certainly end up in the additional rate tax band and lose your personal allowance. I imagine for most if not all contractors caught up in this settling with be the least expensive way of dealing with this.

[Runster]

OK, so following some discussions with an accountant on the phone over the weekend, I have been left a little confused by the whole process. I am hoping to speak to other accountants this week, but in the meantime can anyone explain in simple terms the difference between choosing to settle with HMRC and the Loan Charge option?

I assume the former is a method to pay back the amount over an agreed timeframe, whereas the latter is the HMRC approach to garnishing PAYE payments from April 2019. However, hope someone can explain in clearer terms.

Again - apologies for asking a naive question.

I would speak with WTT - a firm of HMRC dispute advisors. . You may have a case against your accountant. Do you have his advice in writing?

[LOL17]

AML 2019 Loan Charge

Just signed up to the forum as in the same predicament myself. I would like confirmation from AML as to the total loan amount - what email address should I use as AML has wound up?

Good luck getting that information. There's no way of contacting AML now. Well there is but they like to be called PTS these days.

I spoke with PTS this morning who said they could provide me with a total loan amount which is of no use to me as I used AML in 4 different tax years. However, if I engage PTS (£750 plus 15% of any savings they can make on my settlement figure) then they can get more detailed information from AML/themselves.

[ColTigh]

I would speak with WTT - a firm of HMRC dispute advisors. . You may have a case against your accountant. Do you have his advice in writing?

Only receiving advice at the moment, so not going to go ahead with the services of this particular accountant. I have a phone discussion booked in with WTT, so waiting to learn more soon.

[webberg]

1. Is nobody actively trying to get this law changed or blocked with a legal challenge? is there any hope?????

2. What is the likely % of tax you have to pay?

3. Is this possible?

4. I believe AML lied to me.

5. How can HMRC find out about them and pursue them?

6. Should I trust this?

I would like to speak WTT and any other advisor who has experience.

1. Challenging the law is via a Judicial Review. Possible but a high hurdle. There is a sub group within Big Group called the Loan Charge Action Group who I see are active in these threads and I suggest you call/contact them. You do not need to join Big Group to do that.

2. You need to calculate the position year by year. Just add the loans to the other income and deduct any tax already paid. Interest runs at 3% a year but only if you have had an enquiry opened by HMRC.

3. No. The settlement terms are fixed and HMRC is usually very reluctant to change them. Such requests usually result in a take it or leave it. There is no benchmarking against what you might have paid if you had used a different means. Any tax adviser promising a reduction should be asked to risk all of their fee on achieving that reduction.

4. Proving a "lie", legally, is difficult. You should beware making such statements in public.

5. They don't have to. It is your legal obligation to report the details as part of your tax return.

6. No. HMRC claim that all disguised remuneration schemes are avoidance and they will enquire into them all. How successful that will be of course is debatable.

The details of WTT Consulting can be found via any Google search. I'm sure other advisers are just as accessible.

[webberg]

My understanding is that if you choose to settle the loans are treated as income in the tax year you received them. However, if you opt for the loan charge all the loans will be lobbed into the current tax year which means you'll almost certainly end up in the additional rate tax band and lose your personal allowance. I imagine for most if not all contractors caught up in this settling with be the least expensive way of dealing with this.

EVERYBODY SHOULD BE CLEAR ON THIS.

The ONLY way to settle the position for earlier years is by agreement with HMRC. That might be via the formal settlement "offer" available now or by some other form of agreement.

The DR charge is not something that you can "opt" for as an alternative to settlement.

The DR Charge will appear unless you have settled before 5th April 2019.

If you settle after that date, there is a mechanism by which the amount paid on the charge is credited against the earlier liability.

Do not for a moment consider that you have a choice here between settlement and DR Charge.

There are those here who think that once HMRC has raised the DR charge, they will not pursue the position for earlier years. I respectfully disagree with that view.

[ChimpMaster]

EVERYBODY SHOULD BE CLEAR ON THIS.

The ONLY way to settle the position for earlier years is by agreement with HMRC. That might be via the formal settlement "offer" available now or by some other form of agreement.

The DR charge is not something that you can "opt" for as an alternative to settlement.

The DR Charge will appear unless you have settled before 5th April 2019.

If you settle after that date, there is a mechanism by which the amount paid on the charge is credited against the earlier liability.

Do not for a moment consider that you have a choice here between settlement and DR Charge.

There are those here who think that once HMRC has raised the DR charge, they will not pursue the position for earlier years. I respectfully disagree with that view.

Hi Webberg

I have highlighted 2 lines in bold.

For the first, if you agree a settlement figure under CLSO2 but do not actually pay HMRC until > 05/04/2019 (either if using TTP or for whatever reason), do you still have to report on the LC?

For the second, I probably misunderstand the sentence - but if HMRC raise a DR charge, this would include all years (where the individual has had a loan), so what do you mean by "earlier years"?