Self Assessment Tax Return 2018/19 and Loan Charge

[dmuk]

Has anyone submitted their self assessment for 2018/19?

Did you dislose your loan amounts or not?

How did you complete the disguised remuneration section?

[Kladderadatsch]

Has anyone submitted their self assessment for 2018/19?

Did you dislose your loan amounts or not?

How did you complete the disguised remuneration section?

I'm also interested in this. I imagine that quite rightly those who have paid for advice will not want to share that advice on an open forum. It would be interesting to know where they have got the advice from and if its worth paying for.

[RickG]

The Self Assessment deadline is Jan 31st 2020.

The Loan Charge review is to report its findings mid January. Whilst there's a question as to whether that leaves enough time to enact any changes, I would imagine most will wait to see what happens before deciding how to proceed.

Many of us have also signed up to professional advice and/or a Judicial Review.

[dmuk]

I'm curious to know how you would submit the disguised remuneration section without raising any tax.

[starstruck]

I'm curious to know how you would submit the disguised remuneration section without raising any tax.

You can't.

[webberg]

Disclosure of loan balances for the purposes of the loan charge is a legal obligation upon YOU.

The SATR has a few boxes to be completed if you indicate in the relevant section that you have loans to declare.

This declaration is a legal obligation and failing to make it is - prima facie - likely to produce a penalty.

This is where the hard yards start.

Are your loans within the definition?

HMRC will say "yes" but without giving it any thought at all. They consider that the few hundred words of legislation is enough to capture every nuance of every one of the (claimed) 250+ schemes they know about.

Really?

For example, some schemes feature loans direct from an employer without the initial involvement of a third party. Hard to see how that fits the definition in section 554A(1)(d).

What exactly is the disclosure requirement?

Is it to use the prescribed form of the SATR or can it be made another way? The law is unclear. There is case law in relation to Follower Notices that essentially says that the form as designed and issued by HMRC to take (in that case) corrective action, is the only way it can be done. There is also case law that suggests that the SATR in its published form is not perhaps as mandatory as HMRC would like to think.

Are you loans "disguised"?

Study Rangers and Hoey and other references and publications in this space. If you think that the loans were in fact remuneration and should have been taxed as such, do they meet the loan charge disclosure rules?

Summary

Disclosure is required and failing to do so will bring claims of penalties from HMRC.

If therefore you chose not to disclose you must be prepared for those and have an argument ready. This argument is likely to be based on having a reasonable excuse for not disclosing.

I'm sorry to say that this is a hugely technical area, muddied by claims from various parties that "solving" the loan charge will bring an end to all enquiries (it will not) and that the various legal actions kicking around will allow you to play fast and loose with your legal obligations (they will not).

Most professional advisers I know are recommending disclosure - as we do.

There are a few who are not, but personally I consider such advice, even if backed by a claimed "analysis" of a scheme backed by a number of (unnamed and unseen) accountants, to be reckless.

There is no substitute here for careful analysis and application of specialist knowledge. Given the likely value of the charge, I suggest that a modest fee to an adviser is going to be worth it.

[webberg]

You can't.

I would disagree with that statement.

Do you have an analysis of the law here to back that up? I'd be happy to discuss it either here or via a more confidential channel.

[ChimpMaster]

I'm intrigued : will white box disclosure be sufficient to avoid the hard nose penalties?

After all, HMRC haven't exactly made it clear how we should declare the loans on our Returns. Perhaps they assume we should just declare all loans as income, but even then, how? Which 'employer' etc?

[starstruck]

I would disagree with that statement.

Do you have an analysis of the law here to back that up? I'd be happy to discuss it either here or via a more confidential channel.

Poster asked about "the disguised remuneration section" of SATR. If you fill in those boxes (questions 21-24) on the SATR then it will automatically raise a tax bill for you. I am a member of big group and aware of the proposed reporting mechanism.

[starstruck]

I'm intrigued : will white box disclosure be sufficient to avoid the hard nose penalties?

After all, HMRC haven't exactly made it clear how we should declare the loans on our Returns. Perhaps they assume we should just declare all loans as income, but even then, how? Which 'employer' etc?

Yes they have - there's a specific section for it on the SATR called "Disguised Renumeration" (questions 21-24).