AML 2019 Loan Charge

[Willo76]

At least now you head is in the sunlight you can see clearly. That is a good start.

I've never heard of Questa. The PTS outfit has historic connections with AML (and Carnegie Knox) but Questa is a new one. There is nothing obvious with that name registered as a company in UK or the IOM (the usual suspects). That said, with AML often nothing is too obvious and they are these days a more diverse organisation and as such it would not surprise me to see a connection.

Have you asked them?

The "loan to replace a loan" type arrangement is - in my opinion - not going to remove the loan charge. We know that schemes involving this type of structure were doing the rounds pre April 5th this year and that opinions as to their effectiveness were mixed but weighted towards the "will not work" end of the scale.

I suggest therefore that taking a loan to pay the tax from an unknown source is hardly sensible. The suggestion that a fee of 15% of any settlement value is also interesting. The deadline for registering for that has passed and a settlement later will almost invariably see HMRC try to ramp up the value. If I was getting paid a percentage of a value set by HMRC I would be in no hurry to reduce it!

An APN is not going to be issued. You have no open years and the scheme was not disclosed.

You need to give notice - NOW - and leave the scheme.

You then need to consider the future. You may have more years contracting ahead of you, but if you work in the public sector, the end client is making a decision about your IR35 status and from April 2020 this will extend to include private sector end clients.

If you are confident that you will remain outside IR35 then any number of firms will take you on. Look at the banners around this forum.

If you are not confident this will happen, then you need to consider an umbrella - a good one and not one promising take home rates achievable only by tax avoidance -and again many advertsie here.

You perhaps need to speak with an adviser regarding your past use of a scheme. Your settlement options are now scarce for the reasons above, but perhaps not over. The alternative is to fight on via the Tribunals.

We can offer a discussion on a number of the above points - as can others who can be found in these threads.

We are WTT Consulting. There is an adviser called Phil Manley who posts here who was at DSW but who I think may have left to go it alone. I'm sure a Google search will find him. I notice also that a new kid on the block has arrived in the form of Carloyn Walsh of CWC Solutions. I don't know here or the guy who owns that company and am therefore neutral in terms of recommending or not.

We can all be found with a simple search.

We offer a free initial call. I cannot speak for the others.

Hello webberG, thank you for your advice, notice has already been served on the scheme ( for which I already feel better ( granted this is state of mind only )) & initial contact made with WTT.

Could you elaborate on what you mean by "An APN is not going to be issued. You have no open years and the scheme was not disclosed."

For clarification, I work private sector.

thanks

[mst1958]

Hello webberG, thank you for your advice, notice has already been served on the scheme ( for which I already feel better ( granted this is state of mind only )) & initial contact made with WTT.

Could you elaborate on what you mean by "An APN is not going to be issued. You have no open years and the scheme was not disclosed."

For clarification, I work private sector.

thanks

Been 'sitting on my hands' for the last couple of years waiting to see what happens! ... but recently received an email from Knox House Trust stating that I need to notify HMRC of personal liability by 30th Sep 2019 and submit a tax return including the loan charge by 31st Jan 2020 ... AND pay ALL tax due by 31st Jan 2020 ... otherwise face penalties of up to 100% of additional tax liability.
They provided a number to Cresta who I've called but only there to help anyone who has decided to settle.
I've had open enquires for 2010-2015 so HMRC already has the figures from AML - I have been awaiting the dreaded brown envelope as I assumed that HMRC would 'hit' me for the amount they think I owe. It would appear that we have to 'commit' ourselves. Not sure what to do. Have contacted WTT for advice.
According to Contractor UK both Johnson & Hunt have stated that they will back a Loan Charge review Jeremy Hunt and Boris Johnson back 2019 Loan Charge Review

[dammit chloe]

Been 'sitting on my hands' for the last couple of years waiting to see what happens! ... but recently received an email from Knox House Trust stating that I need to notify HMRC of personal liability by 30th Sep 2019 and submit a tax return including the loan charge by 31st Jan 2020 ... AND pay ALL tax due by 31st Jan 2020 ... otherwise face penalties of up to 100% of additional tax liability.
They provided a number to Cresta who I've called but only there to help anyone who has decided to settle.
I've had open enquires for 2010-2015 so HMRC already has the figures from AML - I have been awaiting the dreaded brown envelope as I assumed that HMRC would 'hit' me for the amount they think I owe. It would appear that we have to 'commit' ourselves. Not sure what to do. Have contacted WTT for advice.
According to Contractor UK both Johnson & Hunt have stated that they will back a Loan Charge review Jeremy Hunt and Boris Johnson back 2019 Loan Charge Review

It should be noted that the only reason for the last bit is that LCAG has been working really hard to apply pressure ( and Iain Dale has been on our side for some time ). If not with LCAG then why not?

[webberg]

Hello webberG, thank you for your advice, notice has already been served on the scheme ( for which I already feel better ( granted this is state of mind only )) & initial contact made with WTT.

Could you elaborate on what you mean by "An APN is not going to be issued. You have no open years and the scheme was not disclosed."

For clarification, I work private sector.

thanks

An APN can be issued only if the year is under enquiry AND the scheme was disclosed for DOTAS purposes.

Noting in your note indicates this is the case.

[webberg]

Been 'sitting on my hands' for the last couple of years waiting to see what happens! ... but recently received an email from Knox House Trust stating that I need to notify HMRC of personal liability by 30th Sep 2019 and submit a tax return including the loan charge by 31st Jan 2020 ... AND pay ALL tax due by 31st Jan 2020 ... otherwise face penalties of up to 100% of additional tax liability.
They provided a number to Cresta who I've called but only there to help anyone who has decided to settle.
I've had open enquires for 2010-2015 so HMRC already has the figures from AML - I have been awaiting the dreaded brown envelope as I assumed that HMRC would 'hit' me for the amount they think I owe. It would appear that we have to 'commit' ourselves. Not sure what to do. Have contacted WTT for advice.
According to Contractor UK both Johnson & Hunt have stated that they will back a Loan Charge review Jeremy Hunt and Boris Johnson back 2019 Loan Charge Review

Knox House (connected with AML) have, as usual, mixed fact and fiction in order to either avoid a potential liability of their own or to sell you something else.

The assumption behind their statement is that you have had loans which are caught by the loan charge. If that is true (and you don't know this and certainly Knox House don't either) then you do have an obligation to report the loans and if they are taxable, then yes, an assessment will be made and tax will fall due.

However all you have is a view from a party which is arguably potentially conflicted and who may, in some iterations of the truth, be liable for the loan charge themselves or one of their connections may be.

Supplying numbers to HMRC and waiting is not sensible. An open enquiry can be settled ONLY by agreement with HMRC or by a Tribunal. If HMRC has stopped asking questions, this does not mean that they have reached a conclusion or can issue assessments/demands. The next step is for HMRC to issue a closure notice and if you agree with their position, you will get assessed and if not, you will go to Tribunal.

The loan charge is NOT a substitute or alternative for settling or fighting your corner. HMRC claim that it is a new tax on a new source. That is nonsense of course but it's helpful to think of it that way. So even if the loan charge disappeared tomorrow, you have open enquiries and they would need to be pursued to their natural end as above.

I have been unable to find much about a "Cresta" involved in the tax of contractor loans. The nearest I can find is a company within the Equiom Trust group who may have changed their name to Cresta. Equiom were certainly involved in some loan schemes and would probably have knowledge but how much and how relevant is unclear.

Contacting WTT is sensible. Other advisers are available.

[dangermaus]

Has anybody gotten to the stage where they have contacted Knox House Trust to arrange write off or “release” from their loans?

Just looking to find out how painful and costly that part of the process is...

[mst1958]

Has anybody gotten to the stage where they have contacted Knox House Trust to arrange write off or “release” from their loans?

Just looking to find out how painful and costly that part of the process is...

I don't know if that is still available? I am totally confused with conflicting info. Below is what I received from AML/Knox House in April: IT would appear that they are trying to dodge the bullet by selling the loans to a 3rd party. I contacted the number and they're not interested in you unless you wish to settle - I didn't bother going into details but I am guessing it's another dodgy scheme that you'll have to pay for to avoid the loan charge - which HMRC have already stated 'won't work' so all your doing is storing up even more pain for later!!! IMHO.



2019 Loan Charge: Update relating to your contractor loan
Last Spring we emailed advising you of the impending 2019 Loan Charge.
The 2019 Loan Charge applies an income tax charge on loans that are due by you to us, which remain outstanding at 5 April 2019.
Knox House Trustees Limited has carefully considered what actions could be taken to mitigate the impact of this legislation. To this end, we have signed a contract with an independent finance company who will takeover the debt that is due by you to us. In return, a fee is paid by us to the finance company. As part of this contract, it has been necessary to replace the original loan agreement with a new loan.
As part of the regulatory requirements relating to the Loan Charge legislation, you will be required to report the amount of the debt outstanding as at 5 April 2019 to HMRC. When reporting you should advise them of the details of the new loan.
We have engaged a specialist firm to liaise with contractors regarding their loan arrangements. Under the terms of a data sharing agreement the necessary information has been transferred to this team to act as a single point of contact so that enquiries are handled swiftly. Please contact them on 0161 710 0249 (Phone lines will be open from 9am on Monday 8th April ) for details of your new loan agreement. Please quote your unique reference which is detailed at the top of this email.
We trust that this matter will be of interest to you and urge you to take action quickly.
Kind regards
Knox House Trustees Limited

[mst1958]

Knox House (connected with AML) have, as usual, mixed fact and fiction in order to either avoid a potential liability of their own or to sell you something else.

The assumption behind their statement is that you have had loans which are caught by the loan charge. If that is true (and you don't know this and certainly Knox House don't either) then you do have an obligation to report the loans and if they are taxable, then yes, an assessment will be made and tax will fall due.

However all you have is a view from a party which is arguably potentially conflicted and who may, in some iterations of the truth, be liable for the loan charge themselves or one of their connections may be.

Supplying numbers to HMRC and waiting is not sensible. An open enquiry can be settled ONLY by agreement with HMRC or by a Tribunal. If HMRC has stopped asking questions, this does not mean that they have reached a conclusion or can issue assessments/demands. The next step is for HMRC to issue a closure notice and if you agree with their position, you will get assessed and if not, you will go to Tribunal.

The loan charge is NOT a substitute or alternative for settling or fighting your corner. HMRC claim that it is a new tax on a new source. That is nonsense of course but it's helpful to think of it that way. So even if the loan charge disappeared tomorrow, you have open enquiries and they would need to be pursued to their natural end as above.

I have been unable to find much about a "Cresta" involved in the tax of contractor loans. The nearest I can find is a company within the Equiom Trust group who may have changed their name to Cresta. Equiom were certainly involved in some loan schemes and would probably have knowledge but how much and how relevant is unclear.

Contacting WTT is sensible. Other advisers are available.

Thanks for your reply. I have attached an email received from Knox House in April this year to a response to a post below. It seems that AML/Knox has sold the loans to a 3rd party (presumably for their own 'legal' purposes). They are claiming that I have to disclose loans to HMRC as stated above. This is the first I was aware of this but interpreting what you say this is not the case? Also as stated HMRC have requested all the info in form of enquiries from AML for all outstanding years - so I have done nothing until I get 'hit' by HMRC as at present there is nothing to contest.
I'm sure it has all been said on here before but there are several 'bones of contention' which I would argue contrevenes human rights:
1/ the retrospective nature
2/ the fact that loans for all years will be due in a single tax year benefiting from only one years allowances
3/ The scheme was declared under DOTAS and was legal - so HMRC cannot claim that they were unaware of what was happening so why leave it almost 10 years before doing anything about it? and have the cheek to charge interest and penalties?
4/ the 'punitive' interest rate of 5% (when the prevailing base rate has been below 1%) which if applied from my first year 2010 will be over 50% compounded - how can they justify charging this?

If it were simply a case of repaying tax on loans that were allegedly due at the time and given time to pay then perhaps there may have been more people inclined to 'cooperate' but the HMRC's punitive sanctions and bullying tactics on individuals to 'frighten' them into paying make me more inclined to challenge them than to roll over and pay.

[webberg]

This is the first I was aware of this but interpreting what you say this is not the case?

I'm sure it has all been said on here before but there are several 'bones of contention' which I would argue contrevenes human rights:

1/ the retrospective nature
2/ the fact that loans for all years will be due in a single tax year benefiting from only one years allowances
3/ The scheme was declared under DOTAS and was legal - so HMRC cannot claim that they were unaware of what was happening so why leave it almost 10 years before doing anything about it? and have the cheek to charge interest and penalties?
4/ the 'punitive' interest rate of 5% (when the prevailing base rate has been below 1%) which if applied from my first year 2010 will be over 50% compounded - how can they justify charging this?

If it were simply a case of repaying tax on loans that were allegedly due at the time and given time to pay then perhaps there may have been more people inclined to 'cooperate' but the HMRC's punitive sanctions and bullying tactics on individuals to 'frighten' them into paying make me more inclined to challenge them than to roll over and pay.

You have misinterpreted what I said.

If you have loans (original or replacement) then you are obliged to disclose them, unless you have a legal or practical reason not to. The grounds you mention are neither.

Your points as to the retrospective nature and the charge arising in one year, have been discussed many times in these threads. I suggest that you contact LCAG for more info and/or help in their campaign.

I don't know your situation, but if you have had enquiries, then clearly HMRC has "done something about it" and if not, then the loan charge is that "something".

If tax is due for a year under enquiry, then interest is charged if that tax value is correct. Penalties are rarer but not unheard of. If you have no enquiry, then no interest/penalty can be charged.

Where did you get "5%" from? Interest on overdue tax is presently 3.25% pa and has been just below that for the last 10 years or so. Also it's "simple" not compounded.

They do not have to "justify" anything. The law says that late paid tax attracts interest.

If you really are playing catch up here, discuss this with a professional or spend some time reviewing the threads as otherwise you are going to misunderstand some important issues.

[Willo76]

Has anybody gotten to the stage where they have contacted Knox House Trust to arrange write off or “release” from their loans?

Just looking to find out how painful and costly that part of the process is...

I was quoted £250 to sort out the paperwork/ and then 15% of settlement figure. Not interested in that and ran away from that cesspit.