AML 2019 Loan Charge

[luxCon]

I would like to know this too. I have been quoted a minimum figure of 45% if I pay personally.
Or the option of a minimum of 70%, up to nearer 100%, if I pay it from my LTD company as this will include, PAYE, NI, BIC - basically nearer 100%!!!!!

I really cant pay 100%, or 70%, but could live with £33k on the basis that at £400/day over 18 months is circa £144k loan.

Thanks

Can you tell us what the total loans where that resulted in 33k? I have about £160k loans over about 3 years - luckily employment was sketchy.

Everyone's circumstances are slightly different.

You need to get hold of your Self Assessment tax Returns for each year with a loan. Take those with the value of your loans to an accountant with basic skills in tax calculation and ask to calculate each year's tax liability as if the loan for the year was an additional income on top of that year's income. Or use a web based tax calculator for an estimate.

So, as an illustration - if you had a loan of say 40k for tax year 2009, with 11k of other income on Tax Return, your settlement liability is around 10.5k (give or take) and accrued interest on that (20% odd) if you had an open year.

Best find a tax accountant

[jazzyg]

What was your loan amount

See my post further up. 18 months for me too. @ £400 a day they wanted £38k from me.

Hi What was your total loan amount?

[catanonia]

Hi What was your total loan amount?

Please read the posts above.

[jsd]

HMRC Contractor Loan Settlement Opportunity - Deadline 31st May 2018

I received a similar email this morning from the Knox Trust (Principle Contractors/SP Managment) telling me all about CLSO. When i spoke to PCL back in 2015 the marketing manager never told me that there was ever a risk of retrospective legislation from HMRC, just that it was all legal and fully compliant and that they have a dedicated 'compliance dept' that constantly monitors HMRC. Now looks like they're hanging out the contractors to dry and trying to make even more money from us via PTS/Vanquish...........in my opinion all of this was mis-sold to me as i wasn't told about any risks going forwards. Be good to find out if anyone has gone down the CLSO route or are just keeping quiet and risking HMRC dont get in touch come 2019..

[webberg]

There really is no great secret here.

As indicated above, if the loans are made to you from a lender and you settle on terms that say it is income, then add the loans to your other income for that year the money was paid, calculate the tax according to the various band limits and deduct what has been paid.

The difference is what you owe.

Add interest which from early 2009 has been around 3% +/- little bit.

Where life becomes more difficult is if your Own Co was in the loop. In other words the cash flow was:

end client > agency > promoter intermediary > Own Co > promoter > lender > you

Arguably Own Co (which probably paid a small salary to you?) was liable to PAYE on the amount paid to promoter.

This is where the rather scary percentages you mention are coming from.

You need to be very careful here about which legal entity had legal and beneficial entitlement to money at what time.

[Loan Ranger]

Use this calculator.

https://www.uktaxcalculators.co.uk

Worked Example

Tax year 2008/9.

You received a salary of £15k. You paid £1,793 in tax on it.

You received loans of £80k. Plugging total £95k into the calculator, gives tax of £28,626.

Settlement would be £28,626 less what you've already paid £1,793. Ie. £26,833

If it's a protected (open) year, interest on top would be approximately 26% ie. £6,976

-------------------------

Tax Year...........Accrued Interest
2001/2....................72%
2002/3....................66%
2003/4....................60%
2004/5....................52%
2005/6....................46%
2006/7....................38%
2007/8....................30%
2008/9....................26%
2009/10...................23%
2010/11...................20%
2011/12...................17%
2012/13...................14%
2013/14...................11%
.

PS. interest and other handy stuff is included in the PDF
https://forums.contractoruk.com/hmrc...g-vs-lc19.html

[Ineedabeer]

Why is AML/Knox suddenly on our case ..

I recieved the 2 mails last week. I worked via AML in 2012 and 13, have always done my own Self Assessment and have never had any queries from HMRC re AML loan payments.
I'm trying to step back and rationalise what is going on here. I've read through this thread and have a couple of further questions (apologies if I 've missed the boat somewhere)...

i) What is the motivation for AML/PTS/Knox to suddenly inform us about this (other than the fees they will rake in if we register with PTS to disclose loan details and manage the settlement)?
I have several friends working for other companies using this form of renumeration who haven't heard anything about the Loan charge.

ii) The mail from Knox contains the following para...
At the time you received your loans, AML had Tax Counsel’s Opinion that the loans were not taxable. When the Disguised Remuneration legislation was introduced in 2010, HMRC only sought to tax relevant payments made after the introduction of the new rules. However, HMRC is now going back and seeking to tax any loans made since 1999, over 10 years before the Disguised Remuneration rules even applied.
If the DR Legislation was introduced in 2010, it would appear to be negligent on the part of AML that they were marketing and administering this payment method beyond 2010. Would you agree?

iii) Another para from the Knox mail...
If you do nothing and your loan remains outstanding, HMRC could at some point in the future make a request under the Exchange of Information rules for the Trustees to disclose the information held regarding your loans. Doing nothing will not avoid the 2019 Loan Charge
Interesting that it says that HMRC 'could' as opposed to 'will' make a request.... I guess this gives some relief for those who decide to adopt an ostrich approach. I think I saw a post in the thread which said that AML/PTS will be notifying HMRC of all employees who recieved loans. Why would they want to or need to do that?

I'm certainly not registering for anything yet, and plan to wait and see what happens for the time being.

[wibski]

Silly Question

Its probably as the title suggests, but has anyone gone for the Vanquish (or AN Other) option and if there any further information on the mechanics of this work ?

Presumably its just a case of handing over a few £k's and staying "on the run" from HMRC ?

[wibski]

Silly Question

Its probably as the title suggests, but has anyone gone for the Vanquish (or AN Other) option and if there any further information on the mechanics of this work ?

Presumably its just a case of handing over a few £k's and staying "on the run" from HMRC ?

[Laharnaman]

Exactly the same situation here my friend...

I emailed PTS asking for the options. I also pointed out that PTS 'should' have access to all the trustee fund payments made out to me over the years. It is completely unexpected that HMRC should retroactively demand tax on those monies paid as loans. I always took the (naive) view that I would stop using the scheme immediately if they changed the law--but since I was not breaking any tax law, I was entitled to minimize the tax I pay in any legal way I can.

Imagine they reinstated the death penalty and decided it should be 'retrospective'. It smells like a horrible abuse of the law does it not?

Not clear about how effective PTS will be; they are very likely the same individuals who are running AML. I hope they do the right thing.

The AML (Knox House Trustees) sent me another email yesterday with a link to register my interest to settle. If i was to register my interest before the 31st May i could do this in two ways 1)directly via HMRC or 2) via PTS.

I'm dubious about the PTS option and they may impose fees for the privilege of contacting HMRC on my behalf. As AML/PTS have all my historic loan amounts for all years concerned, it would be easier for them to register my interest. If i contact HMRC directly myself i need all the information i.e. loan amounts and i dont have these and cannot get them from AML/PTS.

Its all a mess and im losing the plot!