AML 2019 Loan Charge

[Ltdoptions]

I'm assuming you mean to ask if a write off post or as part of a settlement attracts the write off charge in section 554C?

No it does not.

Part of the settlement terms say it does not apply.

However a write off PRIOR to agreement on settlement, especially now that the settlement may fall into the 2019/20 tax year, risks a confusing scenario and the (hopefully faint) possibility of paying tax on the write off AND the settlement.

You would have to hope that common sense says that if you are foolish enough to write off in 18/19 but settle in 19/20, then the earlier tax would be a credit against the settlement. However I just don't see that in legislation of HMRC statements and frankly, I don't trust HMRC.

Agreed. Even a 1% risk of them 'legitimately' double taxing is not worth it given their clear Maximise Revenues policy.

[webberg]

Is it possible to pay off a percentage? I thought it was all or nothing?

I have no idea.

The ability to repay/write off a loan in part lies in the terms of the loan and relationship between lender and borrower.

My post was about the tax consequences, not the commercial or legal.

[QUODM]

AML/KHT breaking terms of loan contract

I'm in a similar position with AML. I did actually engage to repay the loans (a process I started nearly 3y ago) as I have a clear clause in my loan contract (with KHT) that I can repay the loan by giving 2 business days notice).

Both AML/KHT repeatedly ignored this and fobbed me off and I have long email evidence that I have been in conversation for 3y and they had brushed me off on this.
Seems to me to be a clear breach of my contractual terms for loan repayment? Is there some way I can get them on breach of contract here and regard the loans voided (even if I have to pay loan charge to HMRC?) so that I don't essentially have to pay any more fees to AML/KHT

Is this something Big Group helps with if I joined?

[webberg]

I'm in a similar position with AML. I did actually engage to repay the loans (a process I started nearly 3y ago) as I have a clear clause in my loan contract (with KHT) that I can repay the loan by giving 2 business days notice).

Both AML/KHT repeatedly ignored this and fobbed me off and I have long email evidence that I have been in conversation for 3y and they had brushed me off on this.
Seems to me to be a clear breach of my contractual terms for loan repayment? Is there some way I can get them on breach of contract here and regard the loans voided (even if I have to pay loan charge to HMRC?) so that I don't essentially have to pay any more fees to AML/KHT

Is this something Big Group helps with if I joined?

Big Group is about settling/litigating the tax position.

However, in response to many requests, we now have a legal capability and we would certainly look at the situation and let you have our thoughts. If we could help, then we will subjecting to agreeing a fair fee.

[stibbok]

Consultation

Got this in my inbox today:

Contractors asked to give evidence on Loan Charge 2019

Contractors caught by April’s disguised remuneration rules are being called by the Loan Charge All Party Parliamentary Group to come forward to give evidence of their experience.

Very tight deadline - Monday, hoping we can get LOADS of responses so they understand the impact.

[ShockedConfused]

In the same boat

Hi all

Thank you for all your great posts, all 86 pages of them, took a long time to get through them all.
AML/Carnegie Knox/SmartPAY/SP-MGT

I joined AML through smartpay first in mid 2015 , as the company as i was joining didn't accept sole trader, so colleague recommend an accountant who recommend AML, I was only in this role 3 months and then job changed and a forced lay off and got transferred over to the AML scheme, which was till late 2016, at this point i was not happy with them and they wanted to transfer me over to SP management. so i left.

i was sold on the scheme as a lot of you have spoken about not having to do the paper work and invoicing, not having to worry about expenses and they would take care of the tax side of things, made life sound a lot easier. little did i know i wish i had just gone as a ltd company at the start.
would have cut out a lot of worried nights.

I got my first letter from HMRC in Late 2016 showing concerns in smartpay.

i did my usual SA for 2016 and didnt worry. as they where not asking for anything more.

come 2018 jan had a letter from hmrc reviewing my years 2015-16. Once this had been review they asked if i wanted to have any other years coincided.

[dangermaus]

Has anybody had any issues getting Knox House Trust loans written off post-settlement?

I’m still awaiting settlement figures from HMRC but want to get an idea of whether there is likely to be another hurdle to overcome after that.

Currently settling via WTT who unfortunately, despite me paying them a large sum to give me advice and assistance, haven’t once told me that settlement isn’t their recommended route. I’ve only found that out by reading a post by Webberg on these pages.

Maybe I should have asked when initially engaging with them if there were any other options they recommend.

[here4beer]

Has anybody had any issues getting Knox House Trust loans written off post-settlement?

I’m still awaiting settlement figures from HMRC but want to get an idea of whether there is likely to be another hurdle to overcome after that.

Currently settling via WTT who unfortunately, despite me paying them a large sum to give me advice and assistance, haven’t once told me that settlement isn’t their recommended route. I’ve only found that out by reading a post by Webberg on these pages.

Maybe I should have asked when initially engaging with them if there were any other options they recommend.

I noticed that post too. However I asked them to settle, and said i didn't want to fight by joining Big Group or anything like that. I'm fairly sure (almost certain infact) WTT would have mentioned Big Group option.

I wouldn't worry about getting the loan getting wrote off, the more i read into it the less I care. There will no doubt be some scare mongering as companies will being to offer services to 'fight the loan', and it's nice to tie a bow around the whole saga and move on with your life. But I think i'd rather use that money on taking my family on a big 'HMRC loan settled' holiday.

If you're settling with WTT, are they able to tell you how successful (or not) they've been with Knox House loan right offs?

[webberg]

Has anybody had any issues getting Knox House Trust loans written off post-settlement?

I’m still awaiting settlement figures from HMRC but want to get an idea of whether there is likely to be another hurdle to overcome after that.

Currently settling via WTT who unfortunately, despite me paying them a large sum to give me advice and assistance, haven’t once told me that settlement isn’t their recommended route. I’ve only found that out by reading a post by Webberg on these pages.

Maybe I should have asked when initially engaging with them if there were any other options they recommend.

As we've been mentioned, I'll respond.

We undertake settlement on behalf of a group of several hundred people. You are correct that we would prefer to litigate but that does not prevent us getting the best settlements we can.

To be clear, settlement is on HMRC terms. We do not get better or worse terms. We do spend a lot of time challenging technical and legal issues which in some instances leads to a reduction in settlement value. We also do our very best with a time to pay period.

All of this of course is based on having an HMRC response and despite claims to the contrary, HMRC is still way behind the curve in getting materials out.

Writing off a loan before settlement is a guaranteed tax liability under section 554C ITEPA. We therefore do not arrange loan write offs before the settlement is agreed.

We do speak with the trustees/lenders. In the case of AML, we do have very good relationships with the parties who claim to control the write off process and we have arranged that where appropriate. You will have been told that this is part of the service you paid for.

You will also have been told that settlement is not what Big Group does and if you came to us seeking settlement you would not be a member of Big Group.

"Paying a large sum" is a very subjective statement. I have no doubt that if you feel the fee we charge - fixed and not hourly based - is "large", then it is.

I do have an idea of what other firms have charged for the service and I am confident that we are very much at the bottom end of the scale.

You are of course entitled to raise the issues you have in any manner you wish.

I might suggest however that a conversation with my team here - and if you remain dissatisfied - with me, is more likely to give you the answers you seek?

Please PM/call me.

[webberg]

I'd also mention that as your settlement values have not yet been agreed, all options are on the table and you are not forced to accept settlement.

If it is the case that you choose not to settle and instead want to join Big Group, the fee you paid will be a credit against the Big Group fee, leaving just the difference to be paid.

(Apologies to admin if this has transgressed advertising guidelines.

As I'm sure everybody here knows, other advisers are available. Settlement is within the capability of any competent accounting/tax adviser. Litigation is within the competence of many advisers, tending perhaps towards the larger firms.)