HMRC settlement Deadlines/delays and the LC

[webberg]

I received £160,000 over 3.5 years 2008-2011.

Can I please ask,

What would be the loan charge for this?
And if I settled with HMRC what would be the total tax and how long would I have to pay it back?

My brother said he would pay my loan charge if I was desperate as he has £100,000 in savings, so I am wondering if I should take a risk and not settle and hope I don't get anything from HMRC? If I do, I have my brother to fall back on to pay the charge?

Regards

Back of an envelope and to be checked against the many calculators available, settlement including interest might be around £58k.

Loan charge, depending on other income in 18/19 might be around £65k.

By all means don't settle, but "hoping" you don't get noticed is not a strategy.

It is YOUR obligation to tell HMRC that you have outstanding loans. It is not THEIR responsibility to find you and raise an assessment.

If you choose not to settle and choose not to disclose, then you might be adding 100% to the loan charge value if you are "discovered".

[rshome]

By all means don't settle, but "hoping" you don't get noticed is not a strategy.

It is YOUR obligation to tell HMRC that you have outstanding loans. It is not THEIR responsibility to find you and raise an assessment.

Thanks for this. So we have to disclose our loans even if we don't choose the settlement opportunity?

[webberg]

Thanks for this. So we have to disclose our loans even if we don't choose the settlement opportunity?

Not sure I understand that question.

If you settle and everything is agreed before 5th April 2019, you are not required to disclose your loans.

If you want to settle but nothing is agreed before 5th April 2019, then you are required to disclose.

If you do not wish to settle, you are required to disclose.

HMRC will claim that the only way to avoid disclosure is to settle. Promoters will claim that some loans are outside the rules and will not need to be disclosed.

Most advisers will favour a position between those extremes that take into account some of the numerous conditions upon which loans were made.

To be absolutely compliant though, if you have not settled by 5th April 2019 (by which i mean reached an agreement rather than paid all the tax) or you do not wish to settle, then you will have to disclose or risk being hit by a penalty.

[RickG]

To be absolutely compliant though, if you have not settled by 5th April 2019 (by which i mean reached an agreement rather than paid all the tax) or you do not wish to settle, then you will have to disclose or risk being hit by a penalty.

So my point was, what if you disclose your loans, say you want to settle, but hear nothing further from hmrc. I assume the LC19 will automatically apply? And will hmrc still accept settlement (given it was their delay which meant you missed the deadline).

I ask this because I want to know if we all need to be chasing hmrc begging them for settlement, or risk being hit with LC19. I say that with some sarcasm.

[rshome]

If you settle and everything is agreed before 5th April 2019, you are not required to disclose your loans.

Ok thanks, so if I choose to settle, how will HMRC work out what I need to pay, if I do not disclose my loans?

[regron]

Ok thanks, so if I choose to settle, how will HMRC work out what I need to pay, if I do not disclose my loans?

They will guestimate and normally multiply the salary you had for the year by 5 !! They did that for me during CLSO1, so it's beneficial for you to give accurate figures, as HMRC's guestimate will more than likely be well over what you actually owe.

[webberg]

So my point was, what if you disclose your loans, say you want to settle, but hear nothing further from hmrc. I assume the LC19 will automatically apply? And will hmrc still accept settlement (given it was their delay which meant you missed the deadline).

I ask this because I want to know if we all need to be chasing hmrc begging them for settlement, or risk being hit with LC19. I say that with some sarcasm.

The UK has a self assessment tax system.

The clue is in "self".

You will need to push HMRC.

[webberg]

Ok thanks, so if I choose to settle, how will HMRC work out what I need to pay, if I do not disclose my loans?

Again - if you choose to settle, you do not need to disclose your loans for the purpose of the loan charge.

Very obviously you need to give HMRC details of the loans for the purposes of the settlement otherwise they cannot calculate it.

[Mrcurrey]

Back of an envelope and to be checked against the many calculators available, settlement including interest might be around £58k.

Loan charge, depending on other income in 18/19 might be around £65k.

By all means don't settle, but "hoping" you don't get noticed is not a strategy.

It is YOUR obligation to tell HMRC that you have outstanding loans. It is not THEIR responsibility to find you and raise an assessment.

If you choose not to settle and choose not to disclose, then you might be adding 100% to the loan charge value if you are "discovered".

Disagree as hmrc have already had notice on self assement returns. If they don't contact you it's on them legally as there is no legal framework at this stage they can pursue only Supreme Court ruling is on the employer. THe loan charge is NOT in effect in this moment in time. Revisit this after April 2019 a lot will happen before then

[rshome]

Again - if you choose to settle, you do not need to disclose your loans for the purpose of the loan charge.

Very obviously you need to give HMRC details of the loans for the purposes of the settlement otherwise they cannot calculate it.

The way I see it I have two options. I can't afford to pay min £50K back.

I will either have to go bankrupt, or the more extreme outcome will be leaving this world for good. I don't see any other realistic option for me personally..