Loan charge review - Government response is here

[lowpaidworker]

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.

#metoo

I will have to contest becuase I cannot afford to pay. All mine bar one are post 2010 and open.

[NotSoCompliant]

_________

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.

Yes, I’ve heard the threshold is quite high but I’m sure that they will still try and coerce many into thinking it’s possible; which is why I would be seeking an expert’s advice immediately. Another thing that could bite is the Section 95 of the Finance Act which gave HMRC an additional time limit band of 12 years for offshore Matters. I was worried about this going back 12 years to circa 2008 but apparently reading HM Treasury guidance


https://assets.publishing.service.go...review_web.pdf

Section 2.12

The 12-year time limit is not retrospective legislation and does not reopen any closed tax years. It applies for tax years 2013-14 onwards for careless behaviour and from 2015-16 for errors despite reasonable care. Time limits in place before the enactment of sections 80 and 81 Finance Act 2019 already allowed assessments to be made for tax years 2013-14 onwards for careless behaviour (6 years) and from 2015-16 for errors despite reasonable care (4 years). Sections 80 and 81 in effect increase the number of tax years potentially subject to assessment prospectively, one year at a time, until the period that HMRC can assess reaches 12 years.

[DealorNoDeal]

_________

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.

+1

The 20-year rule is pretty much into evasion territory. Virtually zero chance they'd get that to stick.

Parliament would be in uproar if they tried to pull a stunt like that.

[BrilloPad]

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

I understand what you are saying. But we all do need to try to work together to attack HMRC on every front.

In parrticular I liked this bit from IPSE: -
“There is also an extremely disappointing endorsement of the changes to IR35 in the report. These changes will drive a whole new tranche of contractors back into the arms of the same snake-oil salesman who peddled these disguised remuneration schemes in the first place. IPSE explained this to Sir Amyas in person and in our written submission. That this report not only ignored this danger, but indeed actively supports the IR35 proposals is a major disappointment.”

Furthermore, Amyas encouraged retrospection!

I have never had a loan. I am now permie and will never contract again. But I do urge us all to keep our attacks on HMRC.

Do we want to end up like the people's front of Judea?

[DealorNoDeal]

In parrticular I liked this bit from IPSE: -
“... These changes will drive a whole new tranche of contractors back into the arms of the same snake-oil salesman who peddled these disguised remuneration schemes in the first place...”

Yep, can see that happening. More dodgy umbrellas popping up offering 85%+.

[starstruck]

Do we want to end up like the people's front of Judea?

I love that scene.

[wilks]

Yes, I’ve heard the threshold is quite high but I’m sure that they will still try and coerce many into thinking it’s possible; which is why I would be seeking an expert’s advice immediately. Another thing that could bite is the Section 95 of the Finance Act which gave HMRC an additional time limit band of 12 years for offshore Matters. I was worried about this going back 12 years to circa 2008 but apparently reading HM Treasury guidance


https://assets.publishing.service.go...review_web.pdf

Section 2.12

The 12-year time limit is not retrospective legislation and does not reopen any closed tax years. It applies for tax years 2013-14 onwards for careless behaviour and from 2015-16 for errors despite reasonable care. Time limits in place before the enactment of sections 80 and 81 Finance Act 2019 already allowed assessments to be made for tax years 2013-14 onwards for careless behaviour (6 years) and from 2015-16 for errors despite reasonable care (4 years). Sections 80 and 81 in effect increase the number of tax years potentially subject to assessment prospectively, one year at a time, until the period that HMRC can assess reaches 12 years.

_______________

The 12 year offshore time limit were never a concern and was confirmed as such by our tax adviser at the time of announcement. As stated the time limit applies from 2013-14 or 2015-16 onwards.

[DealorNoDeal]

_______________

The 12 year offshore time limit were never a concern and was confirmed as such by our tax adviser at the time of announcement. As stated the time limit applies from 2013-14 or 2015-16 onwards.

God knows why they even needed that. Imagine if the Police took 12 years to detect something.

[dammit chloe]

God knows why they even needed that. Imagine if the Police took 12 years to detect something.

They said they needed it because it took so long to get info from overseas despite it being easier than ever. The Lords thought it unnecessary. Of course it is just to cover their incompetence again. They, or the Government, never turn down new powers.

[NotSoCompliant]

+1

The 20-year rule is pretty much into evasion territory. Virtually zero chance they'd get that to stick.

Parliament would be in uproar if they tried to pull a stunt like that.

Some may be caught under HMRC internal manual CH54000 whereby the 20 year rule

“Assessing Time Limits: Extended time limits: Failure to disclose a notifiable avoidance scheme

There is a 20-year assessing time limit to recover a loss of tax which is attributable to an avoidance scheme. This extended time limit may apply if the scheme user hasn’t notified HMRC at the proper time about using a scheme under one of the following disclosure regimes

the disclosure of tax avoidance schemes regime (DOTAS) for direct taxes
the disclosure of avoidance schemes regime for VAT (VADR)
the disclosure of tax avoidance schemes; VAT and other indirect taxes regime (DASVOIT), or
the promoters of tax avoidance schemes regime (POTAS). This only applies if the promoter of the scheme is a monitored promoter, see AHP6732.”