AML 2019 Loan Charge

[Gusman1859]

panama paradise

Will be interesting to see what link AML has with Panama/ Paradise?

Guaranteed links.

[porrker]

Will be interesting to see what link AML has with Panama/ Paradise?

Guaranteed links.

Fill your boots

https://offshoreleaks.icij.org

[WTFH]

Rather than looking for AML, take a look at Perree Limited and Knox Worldwide.

Then the list of offshore companies just grows and grows...
Birdsville
Cascade
Pulse Professional
Contracting Options
Falcon Management
PSC Resourcing
PSC Services
Integra Resourcing
Lion Resourcing
SmartPay (various flavours)
...etc

[Boydskeet79]

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.

[Albert49]

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.

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.

[howcanigetyoualoan]

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.

Where did you hear that (specifically) AML are asking for 5% to write off the loan?

[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.

[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.

[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).

[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.