AML 2019 Loan Charge

[JackH1]

HMRC and Credit Rating

Does anyone know by entering a prospective repayment loan (Time to Pay) with HMRC (For which many of us will have to) Will have an effect on our credit rating?

[phil@pmtc]

Does anyone know by entering a prospective repayment loan (Time to Pay) with HMRC (For which many of us will have to) Will have an effect on our credit rating?

No, it will not.

[ASW]

What does future hold?

4 weeks since notification from KHT. Apart from the. 2-3 hours sleep each day I get - this is on my mind the remainder of the day. At least it’s good for the weight as now 2st lighter. Not sure what the future holds - but serious question - would the tax burden pass onto my spouse?

[Loan Ranger]

4 weeks since notification from KHT. Apart from the. 2-3 hours sleep each day I get - this is on my mind the remainder of the day. At least it’s good for the weight as now 2st lighter. Not sure what the future holds - but serious question - would the tax burden pass onto my spouse?

I will answer the question dispassionately.

The loan charge is not intended to apply to someone who has died.

https://davidpett.tax/2018/02/06/dis...n-the-meantime

[Pipjb]

Hello from me

Hello all.

After having read all 53 pages of posts I now feel the need to add my own.

Obviously, I am in the same boat as most posting on here, and like most have lost vast amounts of sleep in the last month since I became aware of the ‘loan charge’ and what it potentially means.

I have been trying to get to grips with it all and not being helped much by you know who…

Just to clarify my pay structure is: My company does work for company X through agency Y, my company invoices agency Y, agency Y pays my company, I send AML/SPM my timesheet, AML/SPM send my company bill, my company pays AML/SPM bill, AML/SPM pay me retainer (as self-employed) and loan, job done.

I have a friend in exactly the same situation and we seem to get different info. We both have been in touch with the very helpful (cough) PTS rep. My friend was told that what needs to be disclosed in up to 06-Apr-16, not so bad as we both started mid 2015. My conversation was different and because I am self-employed but operate through my limited company the date had shifted to 28-Mar-17, much worse. To clarify, those dates are being used for the £250 + 5% plan cost calculation so no LC applies.

So to me that implies that HMRC will ask AMP/SPM (or the trust I guess) to disclose all open loans, and that SPM think all loans after 28-Mar-17 are NOT under consideration!

So, that gives me a question; if I go down the CLSO route what do I disclose, up to 28-Mar-17 and hope for the best or all the way up to March this year (when I stopped using SPM)?

One other point I would like to make and put out there for feedback:

How the hell can HMRC say that because we have no intention of paying back the loan then it is a DR and subject to the LC!!! I for one would quite happily sign a declaration to say that upon my death I would pay back the loans in full out of my estate! Therefore, it is a loan pure and simple! No LC! And the way I am going death is an option!

[JackH1]

No, it will not.

That's good to know!

[Iliketax]

So, that gives me a question;

OK. You are going to hate me for this...

You really should take your own independent professional tax advice. The focus being on independent.

Obviously, I am in the same boat as most posting on here,

Based on what you say, I think you may be in a substantially worse position than many.

Just to clarify my pay structure is: My company does work for company X through agency Y, my company invoices agency Y, agency Y pays my company, I send AML/SPM my timesheet, AML/SPM send my company bill, my company pays AML/SPM bill, AML/SPM pay me retainer (as self-employed) and loan, job done.

Just to be clear:

1. On the basis that you are an employee/director of your company then, as you've described it, the payments by AML/SPM to you are within the employee disguised remuneration rules that have been around since December 2010. The fluff around self-employment does not come into it. Your company has an obligation to operate PAYE/NIC. When you take your independent tax advice you should make sure that it covers the GAAR (general anti-abuse rule) and its specific penalty regime. https://www.rossmartin.co.uk/penalti...gaar-penalties. GAAR penalties are up to 60% of the tax. Oh, there would also be employee's and employer's NIC.

2. If you have a genuine self-employed business (and from what little you have said, it doesn't sound like you have) then from 6 April 2017 the self-employed DR rules will apply to the payment you received. Conditions A to D have all been satisfied (the payment by your company to AML/SPM would be a qualifying third-party payment if you really do have a self-employed trade). Condition E is that there is a tax advantage and it sounds like it has been sold to you on the basis that there was one (as otherwise why on earth would you do this). Again take independent tax advice (did I say "independent"). as GAAR would be relevant and so may the "requirement to correct" rules (where the 100% penalty is the minimum penalty - https://www.gov.uk/guidance/requirem...ffshore-assets). I've mentioned RTC as I'm assuming that there is an offshore aspect to all of this. Just for completeness, the April 2019 loan charge would apply to any pre-April 2017 loans. But you should not pay tax under both employee/self-employed rules.

How the hell can HMRC say that because we have no intention of paying back the loan then it is a DR and subject to the LC!!!

From what you have described, the payments to you are caught by DR so that the April 2019 loan charge doesn't really change anything. The key bit is to make sure that you get independent professional advice on the wider GAAR/RTC issues. RTC has a 30 September 2018 deadline. But to answer your question, that's because Parliament has said that.

One extra bit, the vast majority of tax advisers will not have come across GAAR, RTC or the self-employed DR rules. So choose your adviser well. And make sure that they have absolutely nothing to do with the people who sold/promoted/ran your scheme.

This is also worth reading: https://forums.contractoruk.com/hmrc...t-options.html

[Fred Bloggs]

I have to say, without pouring fuel on the fire it seems Pipjb is in a pretty lousy situation. I hope he/she manages to sort the mess out somehow. I get the impression he/she is still in the scheme. Oh dear.

[GreenMirror]

4 weeks since notification from KHT. Apart from the. 2-3 hours sleep each day I get - this is on my mind the remainder of the day. At least it’s good for the weight as now 2st lighter. Not sure what the future holds - but serious question - would the tax burden pass onto my spouse?

I hope you have reached out to a tax adviser? Phil@dws is handling mine - a huge weight off my mind.

If you need further help feel free to PM me.

[Loan Ranger]

Do not take anything the scheme provider says at face value.

At the end of the day, it will be YOU who ends up in the shít if they're wrong.