AML 2019 Loan Charge

[webberg]

Repaying the loan will prevent the loan charge arising but will not prevent HMRC from claiming that tax is due on the £390k of loans.

Whether HMRC is correct or not has yet to be determined.

You will know only when either AML's promised litigation happens or another group goes to litigation or you roll over and accept HMRC's version of the truth.

repaying the loans may not avoid the loan charge if HMRC consider that it is part of an avoidance scheme. I suggest that initially at least the arrangement will attract that sort of attention. I'm not au fair enough with the detail to understand whether this charge can be defeated, but I suspect HMRC will be approaching this with some prejudice.

Repaying the loans and receiving back the cash in some form is certainly a taxable event.

My opinion therefore is that repaying the loan (5%) will not prevent a tax charge being claimed by HMRC - and to determine that you may need to join a litigation group. Having the money back will certainly trigger a charge.

My opinion is that if Vanquish and its supporters/promoters were in the UK and prepared to stand by their plan with real people and real money and real prospect of success, then they would have more credibility.

In the absence of such pillars, I would recommend extreme caution.

[AFLConsult]

webberg

Many thanks for the response. I think I have seen that HMRC have extended the registration deadline so am I still able to register my interest with HMRC re a settlement and try to negotiate extended terms?

Do you know if expenses such as hotels and flights can be offset against the loans as much of my work was based away from home so I was either flying or getting the train to London and staying in a hotel 4 nights a week? On one of my assignments I rented a property for 16 months as it was cheaper that paying for a hotel and travelled back home at the weekend?

Thanks

JK

[webberg]

webberg

Many thanks for the response. I think I have seen that HMRC have extended the registration deadline so am I still able to register my interest with HMRC re a settlement and try to negotiate extended terms?

Do you know if expenses such as hotels and flights can be offset against the loans as much of my work was based away from home so I was either flying or getting the train to London and staying in a hotel 4 nights a week? On one of my assignments I rented a property for 16 months as it was cheaper that paying for a hotel and travelled back home at the weekend?

Thanks

JK

Extended the deadline? I think that they have indicated that if you don't settle by 5th April 2019, they may consider a settlement later. At this time I think that is not "official" but you have nothing to lose by sending in a request.

In terms of expenses, you have a number of challenges.

First, did you claim at the time? If not, why are you claiming now and what has changed? Are you now out of time?

Second, the settlement terms generally permit no deviation from the checklist approved. Expenses are not on that list.

Third, even if you overcome 1 and 2, are the expenses allowable. Well know actor rented a house whilst he was appearing in London, away from his home. Claimed relief - lost. Why? Because the expense of the house may have put him in a position to do the job, but was not a cost which was incurred in the performance of his duties. Essentially home to work cost and not allowable.

Last, do you have the evidence?

By all means try but prepare for disappointment.

[marine1983]

Hi,

I have had through the letters with regard to me paying a settlement.

I'm a little confused by it. I owe roughly 3.7k in loan charge and around 600 in interest.

In the first paragraph they explain how they've got to the figures multiplying the months by 6, with roughly 19k in total. I was not able to provide any documentation at the time as my scheme was for the year 2008-2009, luckily I didn't stay with the scheme long.

My confusion is that they note that I've paid an APN to the sum of 3.7k which was around 2 years ago. This figure matches the calcs mentioned in the breakdown. Have they taken the APN payment as a count towards the fine, by making the account 0? Or do they also want an additional 3.7k extra?

The breakdown is not very forthcoming and doesn't show anything about the APN payment. It doesnt even let you know how to pay, it appears to be a trap to me as they also want you to do declarations about trust fund loan clearance. I'm nervous now on what boxes to tick as it could trigger IHT. My impression was that by paying and complying HMRC would leave me alone and it will be all over. They seem to want you to fall on the sword by asking loaded questions.

I hope that makes sense.

[webberg]

Hi,

I have had through the letters with regard to me paying a settlement.

I'm a little confused by it. I owe roughly 3.7k in loan charge and around 600 in interest.

In the first paragraph they explain how they've got to the figures multiplying the months by 6, with roughly 19k in total. I was not able to provide any documentation at the time as my scheme was for the year 2008-2009, luckily I didn't stay with the scheme long.

My confusion is that they note that I've paid an APN to the sum of 3.7k which was around 2 years ago. This figure matches the calcs mentioned in the breakdown. Have they taken the APN payment as a count towards the fine, by making the account 0? Or do they also want an additional 3.7k extra?

The breakdown is not very forthcoming and doesn't show anything about the APN payment. It doesnt even let you know how to pay, it appears to be a trap to me as they also want you to do declarations about trust fund loan clearance. I'm nervous now on what boxes to tick as it could trigger IHT. My impression was that by paying and complying HMRC would leave me alone and it will be all over. They seem to want you to fall on the sword by asking loaded questions.

I hope that makes sense.

Settlement calculations do not include APN amounts paid. These will appear in a later document - the settlement contract - and will be applied against the sum due. In your case, this will leave just the interest due.

Not sure what you mean by a "fine". There is no fine. There is interest but that is not a penalty or fine. HMRC will not negotiate interest but you can make a submission later if you think it is unfair in your circumstances for interest to be applied.

Dealing with the tax is one thing, but the loans are another. HMRC cannot force you to have the loans written off, but leaving them outstanding is probably not very sensible.

If the loan is written off by the trustee or lender (and some are charging frankly extortionate fees for this - vultures) then HMRC claim that IHT can arise. In the majority of cases we believe that this is incorrect.

However, if you tick the box in the settlement forms that you are having the loan written off AND IHT is due, it will be included in the calculation. Failure to pay the full amount of the calculation will render the settlement invalid.

Your choices are therefore:

1. Suck it up and pay the IHT making sure you get a loan written off
2. Elect not to tick the write off box, pay the settlement, take up write off later
3. Elect not to settle.

There are no loaded questions. HMRC are using a one size fits all checklist/call centre script approach and you have not been selected for special treatment.

If you think that you are being tricked, go and get some advice from a professional.

Make sure it's a professional with no connections with the scheme(s) you used as they will be conflicted.

[marine1983]

Settlement calculations do not include APN amounts paid. These will appear in a later document - the settlement contract - and will be applied against the sum due. In your case, this will leave just the interest due.

Not sure what you mean by a "fine". There is no fine. There is interest but that is not a penalty or fine. HMRC will not negotiate interest but you can make a submission later if you think it is unfair in your circumstances for interest to be applied.

Dealing with the tax is one thing, but the loans are another. HMRC cannot force you to have the loans written off, but leaving them outstanding is probably not very sensible.

If the loan is written off by the trustee or lender (and some are charging frankly extortionate fees for this - vultures) then HMRC claim that IHT can arise. In the majority of cases we believe that this is incorrect.

However, if you tick the box in the settlement forms that you are having the loan written off AND IHT is due, it will be included in the calculation. Failure to pay the full amount of the calculation will render the settlement invalid.

Your choices are therefore:

1. Suck it up and pay the IHT making sure you get a loan written off
2. Elect not to tick the write off box, pay the settlement, take up write off later
3. Elect not to settle.

There are no loaded questions. HMRC are using a one size fits all checklist/call centre script approach and you have not been selected for special treatment.

If you think that you are being tricked, go and get some advice from a professional.

Make sure it's a professional with no connections with the scheme(s) you used as they will be conflicted.

Thanks for your thorough answer.

Me using "fine" is just my terminology of taxed owed. I'm pissed about the retrospective nature of this. In my world its a punishment, i.e fine. I dont understand how they've managed to get this through. If I committed murder yesterday when it was legal, they sure cant then retrospectively charge me with murder today. Justice is meant to be fair and balanced.

Does anyone know if AML still exists and are willing to settle the loans? If not, my understanding is that I actually need to find 19k to clear the total balance?

I want to settle and get this over with, they made themselves out; that if you settle it will be done with. Now they want me to pay IHT, that has never been mentioned in any previous correspondence. This is why I mention loaded questions. They keep adding stuff on.

[webberg]

Thanks for your thorough answer.

Me using "fine" is just my terminology of taxed owed. I'm pissed about the retrospective nature of this. In my world its a punishment, i.e fine. I dont understand how they've managed to get this through. If I committed murder yesterday when it was legal, they sure cant then retrospectively charge me with murder today. Justice is meant to be fair and balanced.

Does anyone know if AML still exists and are willing to settle the loans? If not, my understanding is that I actually need to find 19k to clear the total balance?

I want to settle and get this over with, they made themselves out; that if you settle it will be done with. Now they want me to pay IHT, that has never been mentioned in any previous correspondence. This is why I mention loaded questions. They keep adding stuff on.

The following may sound harsh. My apologies as it's not meant to be, just a set of factual statements.

How you perceive and define a tax is subjective. A civilised society needs funds in order to pay for things that it should. In a utopian society, tax is not needed because those with the funds or abilities would volunteer money/time/expertise. Unfortunately our society is a million years from that and consequently a tax is needed. Remember also that tax rules are there to protect YOU from Government taking 100% of your income.

That part of AML that has your loan still exists in Knox House Trustees Ltd. Any Google search will find them.

If they did not, why would you need to find £19k. If the lender has gone, who would you pay that £19k to?

IHT is mentioned in HMRC's settlement announcement in November 2017. It is true that HMRC officers are not pushing this element hard (enough), but it's always been there.

[marine1983]

I agree with the basis of tax. However changing the law and then back dating is another matter.

I've emailed Knox house with regard to getting the loans written off, i've had no response from them so far. HMRC on the letter stated in their opinion that no IHT is due. (YET)

Ive sent back the agreement to settle. I've ticked the box that i'm not going to settle the loans. 30 days isnt long enough for me to do so, my only choice is to maintain the status quo.

I've also said that I will struggle to pay and try to come up with a plan. My hope is that the APN appears to cover the main tax due. The interest can be settled through the payment plan.

[webberg]

I agree with the basis of tax. However changing the law and then back dating is another matter.

To be clear, the law was not changed or backdated.

The effect of the law is that it applies to sums received in previous years and not taxed, so it retrospective effect but is not strictly retrospective law.

[fifi]

Dazed and Confused

Hi All,

Can someone help me on the AML Loan Charge and what charges / tax bill I may be facing? I have just seen the email regarding contractor loan legislation and am understandably concerned. I've received no other communication from AML since march 17, which was a letter from HMRC to AML -'acknowledgement of appeal for tax year 12-13, £8126 postponed'
so this has come as a bit of a shock. looks like lots of info on here and I'll be reading through this thread tonight.

I appreciated that year was going to be investigated and I am likely to have to pay the 8k + interest to HMRC, but is this loan charge that I also have to pay something to AML?

I'm going to find an Financial Adviser asap (any referrals in Kent area would be great) but if someone could give me a worst case based on the following that would be great (I have gathered from online bank statements payments from AML/Knox for tax year 12-13 but the rest is a guestimate as its a laborious process.

I was working under AML through smartpay from Sep 13 - July 15

Money received:

Tax Year 12-13
PAYE: £5,267
AML Personnel Limit: £6,315
Knox House Trustee: £18,748

Tax year 13-14
AML personnel limit: £9,500
Knox House Trustee: £30,000

Tax year 14-15
AML personnel limit: £3,500
Knox House Trustee: £9,500
PAYE: £22,000

Any help will be greatly appreciated and hopefully help me sleep