Loan charge review - Government response is here

[Dave19]

No change - you will still need to deal with that.

Does that mean even if you pay Loan charge you still have to fill out a settlement pack to resolve the tax on open enquiries? (assuming loan charge payment is credited to the settlement)

[webberg]

Graham - please keep up the good work. It is appreciated by the vast majority.

Thank you for the kind words.

I have no issues with anybody expressing their views or telling me I'm incorrect on something, just so long as there is some reason or personal circumstance driving it.

We tried in the past to bring the advising community together but for various reasons that has not happened. I honestly think it's now too late for the advisers to join forces and unfortunately therefore we will be ploughing our own furrows.

Again, those advisers have their view and from what I know about them they all have merit and advantages (as well as disadvantages). We'll see post Christmas - when the promised legislation arrives - whether HMRC and the draughtsman are quite as generous as SAM and the Government has promised and I'm sure that will then give us advisers another opportunity to work together.

[DealorNoDeal]

In Feb it will be 12 years for me. No end in sight.

I fear those who are fighting on the loans front will face the same interminable battle. It can blight your life if you're not careful.

The problem is, the longer you fight on, the more you can get psychologically trapped by "sunk cost".

If you knew back then, what you know now, would you have settled/gone bankrupt to draw a line under it?

[BrilloPad]

I fear those who are fighting on the loans front will face the same interminable battle. It can blight your life if you're not careful.

The problem is, the longer you fight on, the more you can get psychologically trapped by "sunk cost".

If you knew back then, what you know now, would you have settled/gone bankrupt to draw a line under it?

I think you are right about the length of time it will take for the loan chargers. I hope we are wrong.

Interesting question about settlement/bankruptcy.

For me it would have meant bankruptcy. I just could not have faced that. I think that would have been worse than the fight against HMRC for me.

Now I have no choice but to fight every step of the way. And there are others who will too.

[ChimpMaster]

I'm the latter of those two scenarios. So as I see it I have, in its current guise at least, avoided the loan charge (which I view as a penalty) but as I received something like an APN where HMRC summarised what they felt I owed the tax liability remains.

Amusingly, not being the most organised person, I felt a quick call to HRMC to ask them to confirm if they have on file any open tax years for myself, they essentially said they couldn't see one and regardless, it's all pre-2010 so no charge or tax would apply. Naturally, I'm not stupid and am ignoring that guidance but it is somewhat worrying that they're misadvising their "customers"!

So call them again, record the conversation and get them to send you confirmation in writing that you have no Open years pre-2010.

Otherwise, as it's all pre-2010 for you, you have no action to take as of now. You don't need to report any loans on your next SATR. If you do have Open years, then HMRC will write to you at some point (in 2020 apparently) to offer you Settlement or to update you on the open Enquiry.

Again, if you don't have any open years pre-2010, so long as you had declared the loans on those tax returns (i.e. you didn't deliberately omit/conceal the loans) then there is little-to-no risk of HMRC opening those years with a COP9 now.

That's as I read the report (all 83 pages + government responses ), but I stand to be corrected by one of the experts.

[DealorNoDeal]

That's as I read the report (all 83 pages + government responses ), but I stand to be corrected by one of the experts.

INAE but I'm confident this is correct. Or, in other words:

pre-2010 closed
pre-2010 open
post-2010

[GhostofTarbera]

INAE but I'm confident this is correct. Or, in other words:

pre-2010 closed
pre-2010 open
post-2010

Thank goodness ipse have saved the day on the loan charge

All hail ipse And sleep easy now

IPSE welcomes Loan Charge review but issues stark warning over IR35 endorsement | IPSE


Sent from my iPhone using Contractor UK Forum

[DealorNoDeal]

I think you are right about the length of time it will take for the loan chargers. I hope we are wrong.

There's an old saying in the financial markets "Markets can stay irrational longer than you can stay solvent". Something similar could be said about taking on HMRC.

HMRC can keep fighting longer than you can stay sane

[NotSoCompliant]

INAE but I'm confident this is correct. Or, in other words:

pre-2010 closed
pre-2010 open
post-2010

If you read the governments more detailed response to the recommendations then I wouldn’t be jumping for joy yet. These exclusions (pre Dec 2010 etc) only relate to the loan charge. Although the LC may be exempt in the relevant circumstances, HMRC state that the underlying liabilities still exist and they will pursue them (eg where an open enquiry exist) through a new Tax unit being set up to target Pre Dec 2010 outstanding liabilities. It’s where there are closed enquiries pre Dec 2010 (my situation) where it will become more interesting - ie do they or can they invoke the 20 year time limits? I think they will certainly try and scare many people into thinking they can and get them to settle otherwise threaten with litigation and possible penalties etc ( remember the penalties under the 20 year category is very severe). If if came to this I would definitely get professional advice.

[wilks]

If you read the governments more detailed response to the recommendations then I wouldn’t be jumping for joy yet. These exclusions (pre Dec 2010 etc) only relate to the loan charge. Although the LC may be exempt in the relevant circumstances, HMRC state that the underlying liabilities still exist and they will pursue them (eg where an open enquiry exist) through a new Tax unit being set up to target Pre Dec 2010 outstanding liabilities. It’s where there are closed enquiries pre Dec 2010 (my situation) where it will become more interesting - ie do they or can they invoke the 20 year time limits? I think they will certainly try and scare many people into thinking they can and get them to settle otherwise threaten with litigation and possible penalties etc ( remember the penalties under the 20 year category is very severe). If if came to this I would definitely get professional advice.

_________

Most people in the know (Tax advisers, former HMRC inspectors etc) have said the 20 year thing is very unlikely as the bar is very high for HMRC to prove deliberate conduct particularly given the law, or lack thereof, at the time. If it were easy they could have already done this years ago before the LC was dreamed up to open closed years and collect interest in addition to income tax in settlement rather than trying the voluntary route. As you say they may well threaten it for settlement purposes, but it seems they are very unlikely to be successful in tribunal.