HMRC settlement Deadlines/delays and the LC

[me206et]

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.

So you are saying that for the loan charge interest is payable on all years. From 1999?

[Delendog]

So you are saying that for the loan charge interest is payable on all years. From 1999?

You should spend a bit of time reading and researching for yourself.

The LC is a charge in this tax year as if all the loans from 1999 were income in this single tax year. The income being the loan amount. The tax will be due 31/1/20. No interest will apply from loan date until 31/1/20.

But if you have an open enquiry for a year(s) HMRC could in concluding that enquiry calculate interest from the date of the loan until the LC 31/1/20 and if the amount is more they could chase you for it. If the amount is less they have stated no refunds will be given.

[me206et]

You should spend a bit of time reading and researching for yourself.

The LC is a charge in this tax year as if all the loans from 1999 were income in this single tax year. The income being the loan amount. The tax will be due 31/1/20. No interest will apply from loan date until 31/1/20.

But if you have an open enquiry for a year(s) HMRC could in concluding that enquiry calculate interest from the date of the loan until the LC 31/1/20 and if the amount is more they could chase you for it. If the amount is less they have stated no refunds will be given.

I have, I just think this is very misleading from webberg and requires some clarification.

[webberg]

I have, I just think this is very misleading from webberg and requires some clarification.

It's not misleading.

If you settle tax for an open year and that is after the due date, then you will pay interest from the due date to the date you pay.

If you settle a voluntary sum for a year that is closed, there can be no interest.

If you do not settle and instead pay the loan charge, in due course that loan charge payment will have to be used as a credit against the earlier liability.

Where that liability is from an open year, it will include interest.

Where the earlier liability arises from a closed year, there is no tax, no interest and no credit. Instead the loan charge on that closed year loan stands.

[Delendog]

It's not misleading.

If you settle tax for an open year and that is after the due date, then you will pay interest from the due date to the date you pay.

If you settle a voluntary sum for a year that is closed, there can be no interest.

If you do not settle and instead pay the loan charge, in due course that loan charge payment will have to be used as a credit against the earlier liability.

Where that liability is from an open year, it will include interest.

Where the earlier liability arises from a closed year, there is no tax, no interest and no credit. Instead the loan charge on that closed year loan stands.

How will HMRC calculate it if you have a mixture of open and closed years, the LC could be taxed at 45% taking all loans into account - how will HMRC work out what LC taxed amount gets allocated to each open and closed year. I expect they don't know yet.

[webberg]

How will HMRC calculate it if you have a mixture of open and closed years, the LC could be taxed at 45% taking all loans into account - how will HMRC work out what LC taxed amount gets allocated to each open and closed year. I expect they don't know yet.

We've asked and you are correct, they don't know yet.

When they know, I hope they will tell us and then I'll have an opinion on whether they are correct.

[forkknife]

which tax year for settlement?

Hi, I don't know if this question has been answered before or not, so apologies if it has:
In the scheme I used I appeared to have received employee loan payments over a number of tax years. When I left the scheme I repaid the employee loans, then a few days later I received these moneys back (plus some other accrued moneys) as an ex-employee loan, which has not been repaid.
In terms of Settlement offer, when does HRMC now view this 'income' to have occurred: was it in the original tax years the loan payments were made, or was it in the final tax year when the final (total) loan payment was made?
because, I assume this makes a difference to potential unused historic 0%/20% tax allowances that HMRC might take into consideration?
TIA

[Iliketax]

How will HMRC calculate it if you have a mixture of open and closed years, the LC could be taxed at 45% taking all loans into account - how will HMRC work out what LC taxed amount gets allocated to each open and closed year. I expect they don't know yet.

The legislation says that its done on a just and reasonable basis. My starting point is that you, the taxpayer, get to choose that just and reasonable basis as you are the one claiming double tax relief. If HMRC can show what you've done is not just and reasonable then they will want (or perhaps the tribunal will require) one that is just and reasonable. If your basis is just and reasonable and HMRC think that there is a more just and reasonable basis then (based on current case law) your just and reasonable basis still applies. If it was me, I wouldn't let HMRC start by choosing what is just and reasonable, that something I'd actively put forward.

[Delendog]

We've asked and you are correct, they don't know yet.

When they know, I hope they will tell us and then I'll have an opinion on whether they are correct.

I think the only option they can really look at is looking at the totals for the LC and open years. If open years is more than the LC then they may apply a charge. In reality this means that anyone who has a closed year in the LC should see the LC as final payment. But hey I expect HMRC will invent some scheme to extract more!

[lowpaidworker]

Confused dot com

OK I still not have had any letter other than they are investigating the scheme and don't throw any paperwork away as HMRC may contact me.

I am confused as to what they are investigating.

Was part of an EBT arrangement from 2009-2010. received an APN and agreed settlement over 3 years for a hefty amount.

Around Nov 2010 scheme ceased using EBT. For December 2010 through March 2011 they gave us loans. From a trust. Its these few months I think they are investigating.

From April 2011- April 2016 the firm offered employee loans. Not via a trust but direct from them.

So am totally confused as to what they are investigating. My old employer says the loans are direct from them and not trust loans. They are still accruing interest as such. They also say you do not need to settle as these are not caught by the 2019 LC.

So a dilemma... do I declare the employer loans or just ignore. I have in writing from the employer who are still going (and I would assume are being engaged by HMRC).

For the last part of the old EBT which turned into trust loans I can afford to settle. (Dec2010 to April2011). If they go after the Employer loans well I'm totally scr**ed.

So whilst I want to engage HMRC I don't know which loans /years to declare. I feel like responding to their letter saying they are investigating and ask how are they getting on... if there anything I have to do ?

I just want to curl up under a duvet and hope it goes away