Loan Charge. What should I do.

[regron]

Loan Charge. What should I do.

I think it’s only worth joining LCAG if you have closed years, but their success rate so far isn’t good, even with significant MP backing and H of P debates - happy to be corrected here.

I doubt Big Group will be transparent on this forum as to what their plans are. Presumably, if you don’t settle open years and decide to fight, then you will have to contest that the loan charge doesn’t apply and be confident that the scheme in which you participated was legitimate - again, happy to be corrected!

You clearly have no idea about what LCAG have achieved but will undoubtedly will ride their wave of success should it come to that [emoji849] BTW all my years are open and I am a BG member.

[dammit chloe]

I think it’s only worth joining LCAG if you have closed years, but their success rate so far isn’t good, even with significant MP backing and H of P debates - happy to be corrected here.

I despair when I read comments like this. It's an action group to fight. The more people that fight the more effective. If the LC falls so do a lot of HMRC's plans as, by their own admission, they don't have the resources to fight all the outstanding enquiries.

As for success rate. Well of course the ultimate success is the elimination of the LC. That was never going to be a simple job or a legal issue. It was about creating political pressure for change and we have gone from nothing to having both HoC and HoL against the LC.

Only the Treasury is holding the line and that may change soon who knows. Without people volunteering and fighting this the LC would have been a foregone conclusion.

[BrilloPad]

The problem is that to remove the loan charge you virtually have to remove the government.

I went through the same argument with NTRT. What is the point I said. NTRT went through years before conceeding defeat(apart from the spin off group) and are now preachers of my mantra.

Having said that, I think LCAG did very well to get as far as they did.

There is a way LCAG can be successful. It requires that Phil Manley is seen as a liberal rather than an extremist. Compare him to, say, Matt O'Connor (activist) - Wikipedia . Matt makes Phil look like a pussy.

Not sure why I am bothering with this post.

[Invisiblehand]

It requires that Phil Manley is seen as a liberal rather than an extremist.

Good luck with that.

[webberg]

Can you clarify what you mean by ‘on the brink’ - i.e. do you have an actual court date for these two schemes. Can you disclose which schemes these are?

The first scheme is Steed self employment version 11/12 to around 13/14. We were meant to be in a directions hearing on 3rd July. That has been postponed and we await a new date which will be between September and December. We were discussing this with our barrister this last Tuesday.

The second is Avenue Trust. HMRC had until the end of May to file a defence and instead asked the Tribunal for a 90 day extension. I read into that the fact that officer who issued the closure notice may have jumped the gun and HMRC are not ready. We may get a hearing this year.

I suspect one complication for HMRC here is that earlier iterations from the this family of schemes - Penfolds/Hamilton - have apparently been on the brink of litigation for years but for reasons unknown is not making any visible progress we are aware of.

In addition, we are about to ask for closure notices on a number of more conventional "employee loan" schemes from 2004 to around 2011. I will not name them here for obvious reasons. I expect that hearing to be late this year and perhaps a more substantive hearing next year.

We are also aware that what will be a leading case was heard in May. We don't know when the decision will be released. We cannot name it for obvious reasons. For clarity however this is not one of ours.

So we are moving into the next phase and inevitably doors will begin to close on those whose strategy to date has been wait and see.

For those with other advisers, pursuing other strategies, we have no idea how what we are doing may impact them. We have tried in the past to reach out and coordinate actions with such advisers, but for a number of reasons this has not been possible. In the absence of a united position, we have to act in the interests of our own clients and hence we are pushing on.

I hope this helps.

[webberg]

I doubt Big Group will be transparent on this forum as to what their plans are. Presumably, if you don’t settle open years and decide to fight, then you will have to contest that the loan charge doesn’t apply and be confident that the scheme in which you participated was legitimate - again, happy to be corrected!

I think you'll find that a separate thread with over 300k views/responses and called "Big Group" is pretty transparent on what Big Group is, how it works and what we are trying to achieve.

I therefore reject absolutely any suggestion that we are not transparent.

I'll not pretend that we are perfect, have a guaranteed plan to remove/reduce liability, have not made errors of communication. I do however consider that we have set out our stall.

We have always offered contractors a free explanatory call with us (meant to be 30 minutes and is usually more) and we never take people on or charge them fees until they understand our proposition.

You are correct in that the loan charge will need to be contested.

You are entirely incorrect in saying that we will defend the schemes as "legitimate".

The word "legitimate" is misleading. Nobody has ever suggested that the schemes were illegitimate. If HMRC were to do so, the bar of proof they need to clear rises - a lot - so they don't. Instead they argue that the interpretation of the law upon which a scheme was based, is inappropriate, invalid, inapplicable, misunderstood, (choose your word).

An allegation of illegality in tax usually moves cases into the criminal arena. Here we see all action in a civil court which essentially looks at the law and decides which of two (or more) interpretations are preferred.

For the avoidance of doubt. In the huge majority of the 140+ schemes we have details of, we are in no doubt that the interpretation put forward by the original promoter is unlikely to withstand an examination under modern judicial principles in Tribunal. We will not therefore defend schemes on that basis.

We have our own strategy which is based on an analysis of the facts we see in the schemes and in accordance with modern judicial principles.

I hope this helps.

[Boodog]

I think you'll find that a separate thread with over 300k views/responses and called "Big Group" is pretty transparent on what Big Group is, how it works and what we are trying to achieve.

I therefore reject absolutely any suggestion that we are not transparent.

I'll not pretend that we are perfect, have a guaranteed plan to remove/reduce liability, have not made errors of communication. I do however consider that we have set out our stall.

We have always offered contractors a free explanatory call with us (meant to be 30 minutes and is usually more) and we never take people on or charge them fees until they understand our proposition.

Wooooah! What I meant was, this being a public forum, accessible by the likes of HMRC, you wouldn’t be able to fully disclose your plans here. Nothing else!

[NeedTheSunshine]

The problem is that to remove the loan charge you virtually have to remove the government.

I went through the same argument with NTRT. What is the point I said. NTRT went through years before conceeding defeat(apart from the spin off group) and are now preachers of my mantra.

Having said that, I think LCAG did very well to get as far as they did.

There is a way LCAG can be successful. It requires that Phil Manley is seen as a liberal rather than an extremist. Compare him to, say, Matt O'Connor (activist) - Wikipedia . Matt makes Phil look like a pussy.

Not sure why I am bothering with this post.

There seems to be a view on here from some that LCAG have failed and their cause is now futile. Far from it. Their achievements over the last year show that they are force to be reckoned with.

Also not sure why Phil Manley keeps getting dragged into it either.

[Boodog]

There seems to be a view on here from some that LCAG have failed and their cause is now futile. Far from it. Their achievements over the last year show that they are force to be reckoned with.

Also not sure why Phil Manley keeps getting dragged into it either.

The loan charge came into effect from 5th April - 2 months ago. In less than 4 months loans have to be declared on tax returns and paid by 31st Jan. IMO LCAG have failed to stop the loan charge, which by the way was announced in the 2016 budget and passed into law in the Finance Act 2017. Unless LCAG can do something pretty speedy then it’s game over.

The OP’s original question was whether or not they should settle or pay the loan charge.

If the OP has open years only, their choice is to settle or litigate.

What intrigues me is this - so thousands of contractors decide to settle, sign the HMRC declaration that whatever happens re litigation, there will be no refund. Then the ruling is that schemes do work (for want of a better word). Surely there’d be a public outcry......

[NeedTheSunshine]

The loan charge came into effect from 5th April - 2 months ago. In less than 4 months loans have to be declared on tax returns and paid by 31st Jan. IMO LCAG have failed to stop the loan charge, which by the way was announced in the 2016 budget and passed into law in the Finance Act 2017. Unless LCAG can do something pretty speedy then it’s game over.

The OP’s original question was whether or not they should settle or pay the loan charge.

If the OP has open years only, their choice is to settle or litigate.

What intrigues me is this - so thousands of contractors decide to settle, sign the HMRC declaration that whatever happens re litigation, there will be no refund. Then the ruling is that schemes do work (for want of a better word). Surely there’d be a public outcry......

I'm all too aware of when the loan charge came in. I don't think at all it's game over for LCAG - I think the opposite. But each to their own. An opinion is just that. It's a shame that so many on this forum give in too easily. Playing right into HMRC's hands. They count on that attitude, and it would seem, rightly so.

The OP has to choose between settle or litigate. Again, each to their own. Maybe ask those that settled under CLSO1 whether that was the end of the matter.

Agree that with open years it is settle or litigate. I never said otherwise. So basically the choice comes down to settle or join BG. To get loan charge overturned then LCAG is your best bet. In conjunction with BG for open years. Frankly, I find it surprising that anyone who is impacted by the Loan Charge and who hasn't joined LCAG astonishing. As said above, loan charge overturned does not solve the underlying tax issue.