Settled in full with HMRC, loan written off. Now Ltd Co has tax enquiry???

[Whysoserious]

I am now very confused. When you say your own money do you mean from your own bank account? Or using the limited company bank account?

Settled from my own personal bank account, not Ltd Co bank account. All tax enquiries received to date have been for disguised remuneration. HMRC saying the loans received from the trust were not loans and should be taxed as income.
My settlement was therefore for personal tax, paid from my personal bank account.

After settling all tax, interest, IHT and loans being written off. I have now received for the first time a discovery assessment against my Ltd Co. For the same tax years, for the same tax scheme. Claiming the payments from my Ltd Co to the trust cannot be deducted from profits for the calculation of Corporation Tax.
HMRC are therefore wanting additional Corporation Tax for the years where my Ltd Co was paying money to the scheme.

In summary I will have paid income tax, national insurance and IHT on "disguised" salary.
Now they want me to pay +£50k extra Corporation Tax from my Ltd Co for the same years, same tax scheme that I have settled.

It's clear now that HMRC are crooks with the one sole goal and extracting maximum tax revenue, whether lawful or not.

[GreenMirror]

Settled from my own personal bank account, not Ltd Co bank account. All tax enquiries received to date have been for disguised remuneration. HMRC saying the loans received from the trust were not loans and should be taxed as income.
My settlement was therefore for personal tax, paid from my personal bank account.

After settling all tax, interest, IHT and loans being written off. I have now received for the first time a discovery assessment against my Ltd Co. For the same tax years, for the same tax scheme. Claiming the payments from my Ltd Co to the trust cannot be deducted from profits for the calculation of Corporation Tax.
HMRC are therefore wanting additional Corporation Tax for the years where my Ltd Co was paying money to the scheme.

In summary I will have paid income tax, national insurance and IHT on "disguised" salary.
Now they want me to pay +£50k extra Corporation Tax from my Ltd Co for the same years, same tax scheme that I have settled.

It's clear now that HMRC are crooks with the one sole goal and extracting maximum tax revenue, whether lawful or not.

I do now understand. And as I think I mentioned above, they might ask for CGT too.

I agree strongly with your last statement. Since 2008 it seems that HMRC can just decide what tax you owe without any reference to anything. Anything they come up with falls under the finance act and voting against that means a vote of no confidence in the government.

This is something the "future of contracting" mob don't understand. But they will.

[webberg]

I was not aware I could settle my personal tax bill from company funds. Clearly we are all missing a trick here.

For the sake of the record.

Where in my statement did I say that you could use company funds to settle a personal liability?

The HMRC settlement terms from November 2017 are clear in principle if not in how they are applied in practice.

HMRC say that if the company uses its funds to pay a personal liability than that is a benefit to the individual that attracts a tax charge.

Where instead the individual settles and essentially pays a corporate liability the the company should not be able to get a deduction on the amount settled, but earlier years calculations should remain unchanged.

As is indicated above, if you have settled under those November 2017 terms, it should be impossible for HMRC to open a company enquiry on this issue.

A call in the first instance may may it all go away.

(I respect Iliketax and his literal analysis of the law, even if HMRC centric, is always illuminating. I guarantee you however that if you mentioned the Tough Glaze case to a front line HMRC officer, all you will hear is an embarrassed silence).

[JackH1]

We have not seen this scenario and given the great play made by HMRC in their November 2017 paper on how to settle where a company is involved, I'm disappointed but not surprised.

I suggest that you tell the person enquiring into the company that you have settled under the November 2017 terms and as such there should be no company enquiry.

That may be enough to close this down.

If not, you are entering deep waters and you will need advice.

That advice might be possible from whatever bookkeeping firm you use for the company, but I suspect not. This is a niche area.

I would though start with them.

I confess that my biggest fear when I read the opening lines of the post was that HMRC was running an IR35 status review. We have been predicting this for a while but whilst their activity in that space is increasing it seems that there ready made list of contractor targets for a review (the settlement list) is not yet being used.

If the Ltd company was closed with companies house and final accounts agreed by HMRC on the last return. Surely, that's final!

[Iliketax]

I respect Iliketax and his literal analysis of the law

Just to get pedantic, I apply the law purposively, based on an informed view and on a realistic view of the facts. That's very different to a literal intrepretation or a stab in the dark. But it does mean I spend a lot of time reading the condocs, the response to condocs, the "debates" on the draft legislation, the explanatory notes, the actual legislation, HMRC guidance and case law. I then spend a lot of time thinking about it and discussing it with others.

[Bobo]

Loan Charge :: DoR and DOE

How did you go about settling the loan with your provider, and was there a admin charge.

Any guidance is welcome

[Whysoserious]

How did you go about settling the loan with your provider, and was there a admin charge.

Any guidance is welcome

An admin charge of £1000 to get the trust to write the loan off after giving them proof of settlement from HMRC.
My scheme and trust seems to be one of the “better” ones out there with regular contact from both scheme and trust.

[Iter]

Settled from my own personal bank account, not Ltd Co bank account. All tax enquiries received to date have been for disguised remuneration. HMRC saying the loans received from the trust were not loans and should be taxed as income.
My settlement was therefore for personal tax, paid from my personal bank account.

After settling all tax, interest, IHT and loans being written off. I have now received for the first time a discovery assessment against my Ltd Co. For the same tax years, for the same tax scheme. Claiming the payments from my Ltd Co to the trust cannot be deducted from profits for the calculation of Corporation Tax.
HMRC are therefore wanting additional Corporation Tax for the years where my Ltd Co was paying money to the scheme.

In summary I will have paid income tax, national insurance and IHT on "disguised" salary.
Now they want me to pay +£50k extra Corporation Tax from my Ltd Co for the same years, same tax scheme that I have settled.

It's clear now that HMRC are crooks with the one sole goal and extracting maximum tax revenue, whether lawful or not.

If they are already calculating personal SA liability based on your loans received as ‘income/salary’, how can they then say you still owe the CT. It can’t work both ways can it! Can’t get my head round it!

I had Ltd setup, and paying on my ltd companies behalf their liability out of personal account. I have a CT relief included which makes sense as essentially I would have reduced profits if the ‘loans’ which they deem were received were paid as salary to me.

[here4beer]

limited company = limited liability. Can you just close it?

[Iter]

Closure request was suspended a while ago. I’ve been a permie for the last few years!
The liability passes down to me anyway as director.