SP Management scheme is it caught by the Loan Charge 2019

[RichardLPK]

After April 2016 and AML I rather stupidly allowed myself to migrate to a scheme operated by SPM (Smart Pay Management), in hind sight it looks like a more elaborate loan scheme than the one operated by AML.

Having studied the contract I signed, there is a loan or draw down aspect and so I think it is likely to be caught by the Loan Charge Legislation but I am not sure.

SPM are being somewhat awkward but have said they can categorically state that the payments made by them are not caught by the Loan Charge Legislation, in their opinion the reason for this is that the loans where paid by a 1st party not a 3rd party and the scheme was run from a company in Malta, outside of the UK and the EU.

Is this true? or should I declare these on my settlement form? I think I should declare them on my settlement form.

Any advice would be gratefully received.

[WTFH]

Sorry to break it to you, but yes, LC applies

[piebaps]

A little digging will probably show that the directors of Smartpay and the directors of AML were pretty much the same people.

[kentishlad]

After April 2016 and AML I rather stupidly allowed myself to migrate to a scheme operated by SPM (Smart Pay Management), in hind sight it looks like a more elaborate loan scheme than the one operated by AML.

Having studied the contract I signed, there is a loan or draw down aspect and so I think it is likely to be caught by the Loan Charge Legislation but I am not sure.

SPM are being somewhat awkward but have said they can categorically state that the payments made by them are not caught by the Loan Charge Legislation, in their opinion the reason for this is that the loans where paid by a 1st party not a 3rd party and the scheme was run from a company in Malta, outside of the UK and the EU.

Is this true? or should I declare these on my settlement form? I think I should declare them on my settlement form.

Any advice would be gratefully received.

Was told the same thing by this band of shysters. And I would assume this is the same scheme that Vanquish has conned a number of people to pay for, sign up to, in order to transfer all loans to that thinking that gets them out of the LC.

[webberg]

The loan charge is based in Part 7A ITEPA.

To fit that definition there are various gateway conditions that need to be met as are defined in section 554A.

One of those is that a third party is involved in the transfer of money from "employer" to "employee".

In theory therefore a loan from an employer is not within the terms of Part 7A.

We have seen an argument from HMRC as to why they think such situations are caught. We are a long way from convinced that a Judge would lend that any credibility.

There is also the argument that the loan has to be made by the employer and stay with the employer in order to be outside Part 7A. Given the changes that the AML and SmartPay companies have been through, including an apparent change of owner, are you convinced that there has been no change in the ownership of the loan from when it was made?

If the loan is not within Part 7A then it may still be taxable under the principles in Rangers. HMRC has a tendency to cherry pick that decision however and great care is needed.

Unfortunately, those promoters who choose to follow the defence that the literal interpretation of the law is the touchstone, will continue to cling to that. We are of the view that this is no longer a defence that can be relied upon.

So, I've not given a straight answer, because there is no such answer.

Our opinion is that the loans may well be in Part 7A, but if not, remain taxable anyway.