AML 2019 Loan Charge

[ssg787]

Clarification

There is no interest with loan charge.

Download the PDF. It covers interest, settlement etc.
https://forums.contractoruk.com/hmrc...-guide-v5.html

Are you saying in some circumstances settling the loan charge on all accumulated loans due as a single lump sum may be better than the accumulated interest and penalties impact of loans spread over earlier years? (in my case reaching over a number of years as far back as 2009)? I have not done the math, should I?

Separately, how is interest calculated? Is this a flat number by year or by month? What happens with the late payment penalties - the 5% plus 5% plus 5% HMRC likes to throw at late payers..?

[dammit chloe]

Are you saying in some circumstances settling the loan charge on all accumulated loans due as a single lump sum may be better than the accumulated interest and penalties impact of loans spread over earlier years? (in my case reaching over a number of years as far back as 2009)? I have not done the math, should I?

Separately, how is interest calculated? Is this a flat number by year or by month? What happens with the late payment penalties - the 5% plus 5% plus 5% HMRC likes to throw at late payers..?

It can be. If you haven't worked this tax year then you have quite a lot of allowance and lower tax band to play with that you may not have in the original years. It is a very individual situation and the laws are very unclear about many aspects, almost like they are making them up on the hoof. There is a question over how much the Loan Charge actually "settles".

Yes, you should do the math and get professional advice.

[ssg787]

And yet

I'm looking at taking this campaign to the next level and start writing to the newspapers to raise awareness. Starting with the Evening Standard then will look at alternatives like the Metro and daily Mirror.

The full epidemic of this and the effect of this can send shockwaves and the likes of politicians will have to stand up and act. It hasn't been highlighted by parliament that in fact it's the middle/working classes effected by this and indeed has made people vulnerable.

If it all possible, I could do with a few people to come forward if we get an interview request including the guy who has to cater for his disabled wife. We can go anon or give our real names it upto you. I need good facts. There's another column that says 200,000 people have registered for CLSO 2 weeks before the deadline so we could be looking at far more. You can email me at [email protected]

It's noteworthy the parliamentary petition just had a little over 3k signatures though..not sure there is much sympathy for the contractor community in the country at large

[ssg787]

Is there a catch?

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

That applies if you stick around and take the LC
If you settle and pass away still owing say 80% of the balance, is the slate still wiped clean or is that payment obligation inherited by the spouse or indeed children?

[ssg787]

Sympathy

I've actually spent time with a QC in the past week to discuss and basically, there is a potential challenge to the LC 2019 based on it being contrary to European Human Rights, however, there is apparently some debate over whether or not it is completely retrospective. If it were, then the challenge would likely succeed, but they are focusing the legislation on a specific area - filling in a technical gap where parliament has previously indicated they were going to act to stop or defeat a particular arrangement (unbeknownst to some of us...) - meaning that there is a chance it would be unlikely to be regarded as "abusive of human rights" by the European Court.

Unfortunately, I feel like this leaves me with no option but to register for settlement - but I'm still hoping to fight and still praying that there is an overturn on the decision. Surely someone, with even half a brain and a shred of human decency realises the gravity of changing a law with retrospective effect.

Some days I feel totally at a loss, and other days I think, no way is this going to happen - but whether I feel hopeful or despairing, I still keep coming back to how utterly and unbelievably f**ked (sorry, but there is no other way to say it!) this whole situation is!!!! it feels like a really, really bad joke or nightmare.

I'm drafting an email to my MP as we speak (although he is a Tory) - despite the fact that every time I "put myself out there" in relation to the matter, I feel more heartburn as I don't want more attention!! I kinda feel like given my position, that's only me being slightly paranoid and what have I got to lose? so I'll do it - send the letter to the MP, i've signed the petition - and I'll keep hoping and praying and thinking that at the end of the day, everything will surely be alright one way or another...

Have felt myself in the same boat most days and sadly my view is that QCs specialise in weasel words and it was 'Counsel's opinion' that was persuasive in signing up to these schemes in the first place. What is morally right isn't relevant - why else does HMRC employ occupational psychologists and tactics that deliberately undermine our mental health - unfortunately law is all that matters and the judiciary in this country have allowed this to happen.

[ssg787]

Status

Actually, it's the other way round. How can you be self-employed if you have a ltd co (incorporated).

Self-employed means being a sole trader (unincorporated).

https://www.gov.uk/set-up-sole-trader

That's why the AML setup (ltd co + self-employed) is a bit dubious.

But for clarity you can be deemed self employed and operate through a LLP with the required number of partners, yes?

[ssg787]

I thought

This is one of the many issues with this punitive approach from HMRC; the loan still stands and there is nothing to stop it being recalled. Paying HMRC doesn't mean the loan is dealt with. You will need to purchase a deed of release. I've read figures of 5% of the total loan amount to do this.

Not what you wanted to hear I'm sure.

I thought an earlier post indicated that AML accepted settlement with HMRC would result in the loans being written off?

[rshome]

Settlement Pack

Hi,

Can we just send the loan amounts to HMRC without filling in the settlement pack spreadsheet?

Also if we decide to settle, when would we have to start paying back? From April 2019? Or immediately?

I'm hoping now that my divorce is done, I MAY be able to save a little bit of cash in the next 8 months.. No where near enough to cover the full amount i will no doubt have to pay, but it would be a start.

[Iter]

I think HMRC are asking the question in the packs if a one off lump sum can be paid in 30 days , I guess that would be after signing the settlement contract. It all depends on your individual circumstances. They are also trying to establish if a payment plan would be req and how much can be afforded.... if I offered £100 a month would they have any other alternative. Surely they would rather receive any payment and settlement of some kind rather than making someone bankrupt

[QUODM]

AML Loans that were written off

AML made great fanfare of having written off the loans between Dec2010-March2011 internally before moving onto a different scheme in Apr2011. I don't remember exactly if this was a slightly different period for the change in EBT law (confused since I know the law was retroactively backdated to Dec2010).

I was confused to see those loans on my list from PTS then? But my understanding was they were written off, I was told by AML they were (still have email) and they were written off pre March 2016 (which is the first of 2 loan balance dates for declaration with LC) and therefore shouldn't need to be declared on the loan charge declaration.
I am sure HMRC would say otherwise but this seems indisputable (if AML did actually write them off and not just lie to us).

Anyone else discussed these written off loans with AML/PTS or have any thoughts?