HMRC settlement Deadlines/delays and the LC

[me206et]

Note, that in the above, paying the loan charge on all/some years is NOT settlement and is NOT an end to the enquiry process. Even if you pay the charge, you will still have to settle eventually.

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So if you pay the loan charge and it is less than settlement then you will have to pay the extra later?
Even if the years are old and closed?
And then they might say that from the loan charge to when you settle there may be interest, or penalties etc. Etc.?

Please clarify.

[starstruck]

So if you pay the loan charge and it is less than settlement then you will have to pay the extra later?
Even if the years are old and closed?
And then they might say that from the loan charge to when you settle there may be interest, or penalties etc. Etc.?

Please clarify.

He means LC does not close existing enquiries, they will continue, so no, not referring to closed years.

[ChimpMaster]

Hey all.

Just got a loan charge letter through, so hoping for advice.

I was employed by Kinsella from September 2006 to September 2007. When I left, any outstanding loans were settled via the usual means back in the day.

I'm in a similar situation.

Received letter today. I used Kinsella/Keypay and repaid loans in 2010. Can't get through to HMRC to tell them, yet again, that the loans were repaid in 2010 and therefore I don't have anything outstanding.

I'll be interested to see what response you get when called back. I'll keep trying to get through and see what their response is. They have had all information regarding my repayment for several years now.

Odd, I also received this general circular from HMRC a few days ago. I see this as HMRC spamming everyone they can - because I am already signed up for settlement and the letter doesn't seem to take that into account.

There are a small number of us who were under the Kinsella group of companies. It is a particularly confusing situation because the loans were repaid via a convoluted mechanism and so you wouldn't have anything outstanding now for the loan charge. However, it's wise to assume that this is not how HMRC will view the loans.

The Kinsella group folded many years ago (2011) and the Trust has deleted all data that is older than 7 years. So there is no information available aside from what was declared on Tax Returns and P11D statements. Or anything you might have kept from all those years ago - which is of course is unlikely.

Personally I had no open enquiries and no communication at all from HMRC since my last Tax Return for Keypay in 2009/10. But that doesn't meant a thing now that HMRC have changed the rules.

I'm signed up with Phil's team at DSW who are facilitating settlement (though it has been a long time since I heard anything Phil? )

I suppose if anything, if you sign up with DSW, then they'll be able to assist you easier with settlement seeing as they already working on mine.

The bad news is, unless LCAG pull a rabbit out, you will be liable for tax at the very least, and then NI and interest if you have open enquiries for any of the years.

Don't fall for charlatans proposing ways of escaping the loan charge.

You can PM if you like.

[Boodog]

registering an interest to settle vs Loan Charge

Hi - does anyone know whether or not registering an interest to settle with HMRC and sending them the required information for them to make a settlement calculation, is binding? I read on HMRCs site that once you enter into a contract with them to settle, it is legally enforcing.

I think that I would be better off paying the loan charge, but I want to keep my options open in case HMRC move the goal posts - again.

[phil@pmtc]

Hi - does anyone know whether or not registering an interest to settle with HMRC and sending them the required information for them to make a settlement calculation, is binding? I read on HMRCs site that once you enter into a contract with them to settle, it is legally enforcing.

I think that I would be better off paying the loan charge, but I want to keep my options open in case HMRC move the goal posts - again.

Nothing is binding at all apart from signing the actual settlement deeds

[webberg]

So if you pay the loan charge and it is less than settlement then you will have to pay the extra later?
Even if the years are old and closed?
And then they might say that from the loan charge to when you settle there may be interest, or penalties etc. Etc.?

Please clarify.

Let's say you have say two years (09/10 and 10/11) with £50k of loans in each year, which if taxed in those years produces a liability of £18k and £16k respectively.

Interest to 31/1/20 (the date the loan charge is due) is 27% and 24% respectively, so £4,860 and £3,840.

Total £34,000 + £8,700 = £42,700.

Let's now say that the loan charge is on £100k at 45% = £45,000.

If - 1. you pay that much loan charge and 2. eventually settle, then the difference of £2,300 is not refundable.

If one of the years in closed and can never be settled, then the non refundable difference could be higher.

[starstruck]

Let's say you have say two years (09/10 and 10/11) with £50k of loans in each year, which if taxed in those years produces a liability of £18k and £16k respectively.

Interest to 31/1/20 (the date the loan charge is due) is 27% and 24% respectively, so £4,860 and £3,840.

Total £34,000 + £8,700 = £42,700.

Let's now say that the loan charge is on £100k at 45% = £45,000.

If - 1. you pay that much loan charge and 2. eventually settle, then the difference of £2,300 is not refundable.

If one of the years in closed and can never be settled, then the non refundable difference could be higher.

Can you explain what you mean by this last sentence please. You can settle/avoid-LC for closed years via CLSO2 by making a voluntary restitution, so why would you say closed years can never be settled?

[webberg]

Can you explain what you mean by this last sentence please. You can settle/avoid-LC for closed years via CLSO2 by making a voluntary restitution, so why would you say closed years can never be settled?

The underlying assumption in that last sentence was that you choose not to settle (otherwise, why are we discussing the loan charge?)

[me206et]

Let's say you have say two years (09/10 and 10/11) with £50k of loans in each year, which if taxed in those years produces a liability of £18k and £16k respectively.

Interest to 31/1/20 (the date the loan charge is due) is 27% and 24% respectively, so £4,860 and £3,840.

Total £34,000 + £8,700 = £42,700.

Let's now say that the loan charge is on £100k at 45% = £45,000.

If - 1. you pay that much loan charge and 2. eventually settle, then the difference of £2,300 is not refundable.

If one of the years in closed and can never be settled, then the non refundable difference could be higher.

Surely interest is only payable on open, protected or discovery years?

[webberg]

Surely interest is only payable on open, protected or discovery years?

Interest is not payable on a closed year if you settle.

HMRC claim that this is a concession. It's not because they can charge interest on tax but not on a voluntary payment.