HMRC saying 200,000 people have registered for CLSO2

[Loan Ranger]

That's what someone was told over the phone.

The HMRC officer said they were so inundated that, until they drafted more people in, there would be a massive delay. The person was told not to expect a settlement statement until at least December.

Also, someone from AML told another person that 40,000 had used their scheme.

[GUD]

What if HMRC is unable to send the settlement figures before 5 April 2019 or the settlement terms remain under negotiation stage due to delay from HMRC? Will I be covered under loan charge in that case?

[Loan Ranger]

What if HMRC is unable to send the settlement figures before 5 April 2019 or the settlement terms remain under negotiation stage due to delay from HMRC? Will I be covered under loan charge in that case?

As long as you've registered an interest by 31 May, you are covered. If HMRC can't get the settlement figures out by 5/4/19 then that's there problem.

[ChimpMaster]

As long as you've registered an interest by 31 May, you are covered. If HMRC can't get the settlement figures out by 5/4/19 then that's there problem.

I'm wondering the same but can't help thinking that HMRC will expect the LC because, frankly, of their ineptitude and inability to deal with their own convoluted laws and regulations.

[Loan Ranger]

I'm wondering the same but can't help thinking that HMRC will expect the LC because, frankly, of their ineptitude and inability to deal with their own convoluted laws and regulations.

Trust me, HMRC will be in deep doo-doo if they can't get settlement figures out in time for everyone who has registered.

[Iliketax]

As long as you've registered an interest by 31 May, you are covered. If HMRC can't get the settlement figures out by 5/4/19 then that's there problem.

Why is it not your problem? The April 2019 loan charge "relevant step" will apply on 5 April 2019 whether you settled or not. This means that, subject to the double tax relieving rules, the outstanding loan amount will be taxed as employment income. So the question then is how do the double tax relief rules apply:

1. You've settled and paid the tax in full by 5 April 2019 - full double tax relief, no liability in respect of the April 2019 loan charge.

2. You've settled and agreed time to pay with HMRC by 5 April 2019 - full double tax relief, no liability in respect of the April 2019 loan charge.

These are basically the "payment condition" in s554Z5.

Any other circumstances, the April 2019 loan charge applies. But if you later settle then you get double tax relief under a different section and that effectively means you pay the higher of (i) the earlier year's tax liability plus any interest, (ii) the April 2019 loan charge liability. Which isn't that helpful.

So unless the government changes the law, or HMRC introduce some sort of relaxation, then it seems to make a lot of difference whether you settle by 5 April 2019 or not.

[Loan Ranger]

Why is it not your problem?

Ok, say HMRC fail to get settlement figures out to a few thousand people before 5/4/19.

Everyone goes to see their MP and complains that they registered for settlement before 31 May 2018, they've chased HMRC and nothing has been forthcoming.

Then watch the brown stuff hit the fan.

[Iliketax]

Ok, say HMRC fail to get settlement figures out to a few thousand people before 5/4/19.

Everyone goes to see their MP and complains that they registered for settlement before 31 May 2018, they've chased HMRC and nothing has been forthcoming.

Then watch the brown stuff hit the fan.

You may be right. But if 40,000 register and you are one of the 100 people who don't get it ll sorted by 5 April 2019 then you will be the one paying the extra tax, having the sleepless nights, etc. I'm not sure the MP point would help much if the MPs are told that most of those who did not settle did not "send us all of the required information by 30 September 2018". You might be one that did. But you still pay the extra tax / interest.

[webberg]

But if you later settle then you get double tax relief under a different section and that effectively means you pay the higher of (i) the earlier year's tax liability plus any interest, (ii) the April 2019 loan charge liability. Which isn't that helpful.
.

We have asked that question of HMRC. Accepting that the officer was not committing HMRC but also that they were a senior officer, he disagreed with the scenario here.

He indicated that where, for example, a pension contribution was paid in 2018/19 and the result was that the net tax due was less than that arising from earlier open years, then the loan charge would not be as you describe.

Happy to share the exchange offline.

[Iliketax]

He indicated that where, for example, a pension contribution was paid in 2018/19 and the result was that the net tax due was less than that arising from earlier open years, then the loan charge would not be as you describe.

I haven't mentioned pension contributions in this thread. But I did put some stuff here:

1. Making a pension contribution is fine for the April 2019 loan charge if you have closed years (i.e. reduces the 2018/19 tax due). If you have open years, HMRC says as less tax actually paid in 2018/19, the double tax relieving rule won't relieve the tax due for the earlier years. They did not say this, but this effectively means you don't get tax relief for pension contributions to the extent that there are open years.

And then expanded on it later in the thread. Is that what you mean?