Loan Charge review - round #2

[DavidD]

One scheme I previously settled in May. I’m guessing as it would stand that is final unless there is some new radical turnaround and allows the money to be claimed back?

My wife settled in full earlier this year - I’m not holding my breath to get that back. For me, I sent away the ‘contract’ earlier this week with a side letter stating that I felt I couldn’t afford and didn’t agree with it but felt I had no choice but to sign due to LC. I note that there is no contract signed by both parties it is only signed by one party - you send it away and are required to pay thirty days later.

I’m now reconsidering if I should pay my LS and TPP or just send a letter stating I’m waiting the outcome of the review.

I assume HMRC will issue some guidance if a review is started.

[Iter]

One scheme I previously settled in May. I’m guessing as it would stand that is final unless there is some new radical turnaround and allows the money to be claimed back?

[DavidD]

If you’ve settled you likely did so under duress - that LC was coming and would ruin you. If LC is scrapped you should have an argument that you would never have attempted to settle but had no choice facing imminent bankruptcy.

These ‘contracts’ were signed under duress.

[webberg]

Establishing an audit trail is important.

[ChimpMaster]

Where HMRC has not yet had a signed contract from you, the last advisory notice from HMRC said that unless the deadlines indicated in HMRC were adhered to, the settlement "opportunity" may be withdrawn. I have no idea how that statement may or may not be impacted by the review.

I suggest however that if this is your situation (i.e. not yet reached an agreed position), you send a letter/email to HMRC indicating that the review announced may impact your final decision and that you therefore wish to suspend discussions until the result of the review is known.

This sort of letter is not a guarantee that HMRC will accede to that request or agree that a suspension is appropriate. It must therefore be seen as coming with a degree of risk that you will have to judge and weigh.

Excellent summary, thanks G.

This part is where I am at and I was thinking how best to proceed and was going to email them. I will do that, as well as send a hard-copy letter by post.

[webberg]

Amidst the chaos and fury of the last few days of political pantomime, in PMQ's yesterday 4th September 2019, Mr Johnson said that the loan charge would be reviewed.

Assuming that there some issues upon which MPs can be trusted the following thoughts and posts are based on the fact that the review will actually take place.

First though the fact that a review is taking place at all is down to a lot of work having been done by LCAG and others, usually unpaid. Achieving this important step in the process is testament to their persistence.

We do not yet know what form the review will take. It is hoped that it will be led by somebody or an organisation that is demonstrably independent of HMRC and HM Treasury and the higher echelons of the Civil Service upon whom HMRC depend for protection. The type of whitewash review we saw the first time around will not do.

If the opportunity arises to contribute to or shape the terms of reference of the review, we should all be active and make our points.

The timing is also unclear. There may an election soon (who knows) which could delay (hopefully not derail) the review. Otherwise given the end September and end January deadlines approaching at the speed of time, we must hope that the form and format is agreed soon and work starts.

The end September deadline for disclosure of loans, remains YOUR legal obligation.

In the absence of any change in legislation - which requires Parliamentary approval, not just HMRC statements - the requirement to disclose remains.

Unless there is some announcement that can be relied upon, disclosure should be made.

The legal requirement to disclose loan values in tax returns also remains. We know that views among the adviser community differ as to what form and format that disclosure should take, but so far as I can see, no adviser is recommending that disclosure is not made.

Unless there is some announcement that can be relied upon, disclosure should be made.

Those who have completed a settlement agreement with HMRC have signed a contract.

Where HMRC has countersigned that contract and the legal process is complete, absent an extraordinary volte face, I would say that the contract is legally binding and should be complied with.

Where HMRC has not yet signed the contract (and I will so bold as to suggest that this is the majority) then there remains the possibility that it may be amended.

Where HMRC has not yet had a signed contract from you, the last advisory notice from HMRC said that unless the deadlines indicated in HMRC were adhered to, the settlement "opportunity" may be withdrawn. I have no idea how that statement may or may not be impacted by the review.

I suggest however that if this is your situation (i.e. not yet reached an agreed position), you send a letter/email to HMRC indicating that the review announced may impact your final decision and that you therefore wish to suspend discussions until the result of the review is known.

This sort of letter is not a guarantee that HMRC will accede to that request or agree that a suspension is appropriate. It must therefore be seen as coming with a degree of risk that you will have to judge and weigh.

Finally, the review may conclude that the loan charge is valid, is entirely invalid and should be withdrawn or some position between these points.

Either way, where you have years that are under enquiry (sec 9A notice or discovery assessment), these are entirely unaffected by the loan charge review.

In the event that the loan charge survives or is consigned to history, these enquiries remain and will need to be resolved at some point.

We should therefore expect HMRC attention to return to these enquiries in due course.

If you have an adviser and any questions - contact them.

If you do not - keep close to this issue as we will no doubt see an embarrassed HMRC try to manipulate the review and its conclusions in order to protect itself.