Loan Settlement, where all of loan was 2017-19.....

[here4beer]

UK Tax Calculator 2018 2019 - Updated for the 2018/2019 and 2019/2020 Tax Year

My loan was April 2017-2018, and April 2018 to Octber 2018.
Salary was 10k a year with very small dividends.

3 questions if you can help?

1) using that calculator it shows NI. Is this included in my settlement figure? Or is it PAYE tax only?

2) even though I'm going to settle, will it all get bundled together, even though this tax year isn't over yet? If that's the case, I'm struggling to see what advantage I have by actually settling?

3) Obviously i'd much rather split it over 2017/18 and 2018/19 Self assessments. Is this doable, as it's still an active year?

[WTFH]

Loan Settlement, where all of loan was 2017-19.....

3) Obviously i'd much rather split it over 2017/18 and 2018/19 Self assessments. Is this doable, as it's still an active year?

OK, a couple of things:
1. The 2017/18 tax year ended in April 2018. It is not still open/active, although maybe an accountant could work something out to move figures around if your tax return has not been submitted yet.
2. The loan charge is payable as part of your 2018/19 tax return, i.e. you’ll need to pay it in January 2020.

Who is helping you work out how much you owe?
Who is helping you submit the figures to HMRC (if you’re going for settlement)?
I’m asking these questions because you’re mentioning PAYE and NI and referring to a standard tax calculator.
Have you stopped using the scheme and all companies associated with it?

Phil at DSWTRES or Webberg will be able to take you through the options. Most of us on here are just contractors, not financial advisors or tax specialists.

[here4beer]

OK, a couple of things:
1. The 2017/18 tax year ended in April 2018. It is not still open/active, although maybe an accountant could work something out to move figures around if your tax return has not been submitted yet.
2. The loan charge is payable as part of your 2018/19 tax return, i.e. you’ll need to pay it in January 2020.

Who is helping you work out how much you owe?
Who is helping you submit the figures to HMRC (if you’re going for settlement)?
I’m asking these questions because you’re mentioning PAYE and NI and referring to a standard tax calculator.
Have you stopped using the scheme and all companies associated with it?

Phil at DSWTRES or Webberg will be able to take you through the options. Most of us on here are just contractors, not financial advisors or tax specialists.

Hi thanks fof quick reply. I'm speaking to a TA you mentioned, but having a panic I'm in even more trouble than I thought. Guess I'm hoping for some one who's been through it. Anything really to help my nerves really.

Self assessment tax for 17/18 isn't yet submitted. Accountant sends them in near end of Dec usually. Then I pay end of Jan.

I'm hoping the loan I had between 17-18FY goes in 1 tax return. And the second final loan amount between April and Oct 18 goes on the second. The difference doing it this way is enernous.
If there's not actually a choice how it's done, then I'll need every penny I have.

Only found out this loan charge thing Included me, about 2 weeks ago. So immediately quit then.

[WTFH]

I'm hoping the loan I had between 17-18FY goes in 1 tax return. And the second final loan amount between April and Oct 18 goes on the second. The difference doing it this way is enernous.

It’s all going in the 2018/19 tax return, payable by January 2020. There is no enormous difference, you just have another year to save up to pay it.
Save hard now for the next 14 months.

As for the amount, a ballpark calculation is to look at each tax year.
If you had a loan of £100,000 in one tax year and you had a salary of £10,000 then you are going to be taxed on the other £90,000. Now, I don’t have a spreadsheet open to crunch the numbers, so I’m going to make them up. Let’s say the higher tax band starts at £40k then you get taxed on £30k at the lower rate and £60k at the higher rate.
If the tax rates are 20% and 40%, then you would pay £6k on the £30k and £24k on the £60k, making a total of £30k in tax.
Given that you also took dividends in that tax year, the number might change, it might also change a bit regarding NI, IHT, etc. Maybe add another 10-15% onto that figure, let’s call it £35k.
There’s your ballpark figure. Might be spot on, probably isn’t, but don’t expect it to be a lot less than that, or massively more.

[here4beer]

It’s all going in the 2018/19 tax return, payable by January 2020. There is no enormous difference, you just have another year to save up to pay it.
Save hard now for the next 14 months.

As for the amount, a ballpark calculation is to look at each tax year.
If you had a loan of £100,000 in one tax year and you had a salary of £10,000 then you are going to be taxed on the other £90,000. Now, I don’t have a spreadsheet open to crunch the numbers, so I’m going to make them up. Let’s say the higher tax band starts at £40k then you get taxed on £30k at the lower rate and £60k at the higher rate.
If the tax rates are 20% and 40%, then you would pay £6k on the £30k and £24k on the £60k, making a total of £30k in tax.
Given that you also took dividends in that tax year, the number might change, it might also change a bit regarding NI, IHT, etc. Maybe add another 10-15% onto that figure, let’s call it £35k.
There’s your ballpark figure. Might be spot on, probably isn’t, but don’t expect it to be a lot less than that, or massively more.

Ok thanks. It's 90k for April 17-18. Then 38k April 18-Oct18. That's my problem, it's over a year I've not submitted yet. And obvs 2018-19 is still going.

Seems massively unfair it all goes into one tax year. That makes its 138k salary for a year, so 49k tax and 6k NIC. So what's the point of me settling early...? Am i missing something? I'm no worse of by just hiding till in caught? Which seems stupid.

Last year was my big push to earn lots. I physically (and emotionally) can't do it again. I'd rather sell my family home.

[WTFH]

Seems massively unfair it all goes into one tax year.

What’s the difference between it going into one year or being spread over two?

That makes its 138k salary for a year, so 49k tax and 6k NIC. So what's the point of me settling early...? Am i missing something? I'm no worse of by just hiding till in caught? Which seems stupid.

Stop referring to it as a salary, it’s a retrospective tax brought in by the current government to punish small businesses.
As for “settling early”, you’re not. If you agree to a settlement with HMRC it’s not “settling early” it’s agreeing a settlement. You can repay it over several years (Phil will be able to advise you on that), it doesn’t have to be one lump sum.
If you choose to “hide” till you get caught, then there will be interest and other charges to take into account, and the repayment plan might not be as good.

Last year was my big push to earn lots. I physically (and emotionally) can't do it again. I'd rather sell my family home.

There are many people on here who got caught in such schemes over the last decade or more. You’re not alone. You may find that your retirement or investment plans have to go on hold while you pay off the outstanding amount. It’s just one of those things. But it’s one worth remembering at the next General Election.

[here4beer]

What’s the difference between it going into one year or being spread over two?



Stop referring to it as a salary, it’s a retrospective tax brought in by the current government to punish small businesses.
As for “settling early”, you’re not. If you agree to a settlement with HMRC it’s not “settling early” it’s agreeing a settlement. You can repay it over several years (Phil will be able to advise you on that), it doesn’t have to be one lump sum.
If you choose to “hide” till you get caught, then there will be interest and other charges to take into account, and the repayment plan might not be as good.



There are many people on here who got caught in such schemes over the last decade or more. You’re not alone. You may find that your retirement or investment plans have to go on hold while you pay off the outstanding amount. It’s just one of those things. But it’s one worth remembering at the next General Election.

If it's not due till 2020, and it ALL goes on my 17-18 Self assessment (even the loan in 18-19 is included), then I'm 1 year early. Is that not the case? Seems there's no incentive to do this, instead declare it all on my 2018/19 return, which is typically sent off in Dec 2019.

I was hoping you'd all say I can pay tax on the first 90k in 2017-18, then my allowance starts again and next financial year I pay the remaining 38k in 2018/19. It's a big difference.

Sorry I only refer to it as a salary, as from what I've read - the loan gets added onto your existing salary and taxed together. So I go from 10k per year to 100k per year in april 2017/18, and from 10k per year to 48k per year in april 2018/2019.

I only started in in 2017 due to horrendously guff advice. Smahsed the work in so i can pretty much have an easy year helping my partner on maternity leave.

I have £0 at the minute. So would need help for evey penny, and pay interest. If I didn't get caught for 2 years, I'd have a very large chunk. May be all of it if I remprtgaged. This shouldn't eve be a decision surely.

That's what doesn't make sense. I'm no better off by coming forwards? I hope my maths is widely wrong.

Ps. I don't want to pay a Tax Advisor £1000's just to lump one big number on a self assessment and that's it. Im sure they wouldn't let that happen, as they seem straight up people with excellent reviews. But it doesn't stop me sh*thing my pants.

[WTFH]

If it's not due till 2020, and it ALL goes on my 17-18 Self assessment (even the loan in 18-19 is included), then I'm 1 year early. Is that not the case? Seems there's no incentive to do this, instead declare it all on my 2018/19 return, which is typically sent off in Dec 2019.

I was hoping you'd all say I can pay tax on the first 90k in 2017-18, then my allowance starts again and next financial year I pay the remaining 38k in 2018/19. It's a big difference.

I think you’re getting confused and overly stressed (yes it is stressful, but you’ve switched your mind off from reading what is written)

Who is doing our accounts for you?
Who is giving you your tax advice?
Why would you put it on your 17/18 tax return if you want to settle?
What is the difference between paying some in January 2019 and some in January 2020, versus paying all of it from January 2020 onwards. You keep saying “it’s a big difference” or “it’s enormous”, but if you still intend to be earning money and paying your bills, paying it later is easier than paying it now, since you don’t currently have the money.

[here4beer]

I think you’re getting confused and overly stressed (yes it is stressful, but you’ve switched your mind off from reading what is written)

Who is doing our accounts for you?
Who is giving you your tax advice?
Why would you put it on your 17/18 tax return if you want to settle?
What is the difference between paying some in January 2019 and some in January 2020, versus paying all of it from January 2020 onwards. You keep saying “it’s a big difference” or “it’s enormous”, but if you still intend to be earning money and paying your bills, paying it later is easier than paying it now, since you don’t currently have the money.

It's more tax efficient to earn 100k in 2017-18, then 45k in 2018-2019. Than it is to earn 10k in 2017-18, and 155k in 2018-19. To the tune of about 15k.
I'd rather do the first way, pay sooner, and save 15k. I don't have the money now, but at least I only have to find 15k less...

I've never had to submit an SA until now, whilst having a loan. Typically just a simple salary and dividend SA (I'm usually so squeaky clean and boring I don't even put in many expenses).

I think my accountant is indirectly part of the scheme company. So my TA will take evryrhing off them, and resolve. Hopefully. (I was just curious as to the numbers I'll be dealing with)

I appologise again. I'm all over the place. I'll have a cup of tea, play my daughter for a bit, and read through again, calmer.