Loan Charge review - in limbo

[ChimpMaster]

This!

So you're not intending to declare your loans on your tax return? You know this classes as evasion, right?

Perhaps you're part of a litigation against HMRC but I can't see how that would allow you to circumvent the LC declaration.

[Virtualguy]

Jesse Norman MP announced that the loan charge review, due to report by mid November (and note, report - not be published) would now not happen and instead will report only when the new government is installed.

If that is mid December, I cannot imagine that the review will be top of the in box.

This is therefore running close to the deadline for tax return submission (31st January).

If you are in settlement, go and seek advice from whomever you are using.

Currently, I am in receipt of a letter which states that I can await the outcome of the review and there is nothing that I need to do at the moment. It makes no mention on the 31st Jan deadline. I sense that I will need to engage my accountant again. So, regardless, I should still plan to submit a task return before end of Jan?

[TheDandy]

So you're not intending to declare your loans on your tax return? You know this classes as evasion, right?

Perhaps you're part of a litigation against HMRC but I can't see how that would allow you to circumvent the LC declaration.

I'm just agreeing with the post made. You can infer what you want from that.

[webberg]

Let me be clear.

I am NOT suggesting or advocating that loans should be left out of the tax return.

The latest communication from HMRC makes it very clear that declaration should be made.

The post I made was to point out that HMRC's view of the situation is just that - a view.

It has no legal weight and in due course may be seen as incorrect by a Tribunal.

Equally, the alternative view I have may be similarly treated by a Tribunal.

My advice is that declaration should be made but that is not the end of the question as to whether a loan charge liability arises, just the beginning.

[lowpaidworker]

Let me be clear.

I am NOT suggesting or advocating that loans should be left out of the tax return.

The latest communication from HMRC makes it very clear that declaration should be made.

The post I made was to point out that HMRC's view of the situation is just that - a view.

It has no legal weight and in due course may be seen as incorrect by a Tribunal.

Equally, the alternative view I have may be similarly treated by a Tribunal.

My advice is that declaration should be made but that is not the end of the question as to whether a loan charge liability arises, just the beginning.

Why did we all have to declare the loans by October 30 if we have to go and declare them all again on our tax return. Was or is there a legal difference ?

[webberg]

Why did we all have to declare the loans by October 30 if we have to go and declare them all again on our tax return. Was or is there a legal difference ?

You were legally obliged to disclose the loans by the 30th September.

You are legally obliged to declare the loans in the SATR due no later than 31st January 2020.

As to why you are legally obliged to do both, I suggest that you ask Parliament (when they return).

[Snooky]

And even worse is that they have changed the guidance for settlements so that it now reads:
HMRC recognise you may want to wait for the government’s response to the review before finalising your settlement. You will need to report the loan charge on your tax return if your settlement is not finalised by 31 January 2020. Reporting your loan charge will not prevent you finalising your settlement. Once your settlement is finalised you can amend your tax return if necessary.

I'm partway through settlement with HMRC and have a letter from them dated 7 October 2019, sent after the LC review was announced, in which they say:

What you need to do now
If you want to continue to settle your tax affairs now, please let us know.
If you prefer to put settlement on hold, there is nothing you need to do at the moment.

What will happen if you put settlement on hold
If you choose to put settlement on hold, we'll write to you again after the government's response to the review has been published.
.....choosing to put settlement on hold will not:

• affect the amount of late payment interest you'll have to pay
• mean you have to pay the loan charge
• mean you need to submit an additional information return as we already have the information we need

I take that to mean that, until the outcome of the review has been published I don't need to do anything - I don't need to put loan details in my self assessment return this January, I don't need to pay the loan charge, I don't need to chase up or complete on settlement. I just need to wait until they contact me again. I certainly don't need to scour their website for any alternative rules they decide to bring into play.

What do others think?

[DavidD]

I’m in exactly the same boat. Until I read this thread today I was ‘sitting tight’ as instructed. I assume they will write to everyone confirming the latest thinking.

Sorry to be so slow but does declaring the loan it on the tax return mean the tax actually needs paid by the PAYE deadline...and it can be claimed back if by some miracle the review recommends it?

I'm partway through settlement with HMRC and have a letter from them dated 7 October 2019, sent after the LC review was announced, in which they say:

What you need to do now
If you want to continue to settle your tax affairs now, please let us know.
If you prefer to put settlement on hold, there is nothing you need to do at the moment.

What will happen if you put settlement on hold
If you choose to put settlement on hold, we'll write to you again after the government's response to the review has been published.
.....choosing to put settlement on hold will not:

• affect the amount of late payment interest you'll have to pay
• mean you have to pay the loan charge
• mean you need to submit an additional information return as we already have the information we need

I take that to mean that, until the outcome of the review has been published I don't need to do anything - I don't need to put loan details in my self assessment return this January, I don't need to pay the loan charge, I don't need to chase up or complete on settlement. I just need to wait until they contact me again. I certainly don't need to scour their website for any alternative rules they decide to bring into play.

What do others think?

[webberg]

I take that to mean that, until the outcome of the review has been published I don't need to do anything - I don't need to put loan details in my self assessment return this January, I don't need to pay the loan charge, I don't need to chase up or complete on settlement.

What do others think?

I would not agree with that interpretation.

I would say that "you don't need to do anything" is a specific reference to the settlement process and NOTHING ELSE.

The settlement process is extra statutory. The tax return process is not - it is a legal requirement.

I cannot see that a blog post from HMRC can override statute.

I therefore regard your interpretation as unsupportable.

Just my opinion.

[Dmac]

I would not agree with that interpretation.

I would say that "you don't need to do anything" is a specific reference to the settlement process and NOTHING ELSE.

The settlement process is extra statutory. The tax return process is not - it is a legal requirement.

I cannot see that a blog post from HMRC can override statute.

I therefore regard your interpretation as unsupportable.

Just my opinion.

It's not a blog post, it is an official letter from HMRC which I understand many thousands of proposed "settlers" have received. As such it should surely carry some weight?

To be certain, HMRC should be contacted to check this point (does a SATR need to be completed for those in settlement discussions), with a request to put their response in writing.