Loan charge review - Government response is here

[DealorNoDeal]

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

Well spotted.

However, this 20-year limit doesn't apply to 2008/9 and earlier, so it wouldn't be a lot of use to HMRC in going after pre-2010 closed years.

CH54000 - Compliance Handbook - HMRC internal manual - GOV.UK

Furthermore, 2003/4 and earlier pre-date the DOTAS regime so were not notifiable anyway.

[NotSoCompliant]

Well spotted.

However, this 20-year limit doesn't apply to 2008/9 and earlier, so it wouldn't be a lot of use to HMRC in going after pre-2010 closed years.

CH54000 - Compliance Handbook - HMRC internal manual - GOV.UK

Furthermore, 2003/4 and earlier pre-date the DOTAS regime so were not notifiable anyway.

So could I feel relatively optimistic for my situation, given the following?

* I have settled with HMRC last year and this included voluntary restitution for 2 closed years : 5 April 2009 and 5 April 2010. I didn’t disclose the loans on these returns but I disclosed the BIK for the interest on loans

* I should get a refund for my voluntary restitution payments on these closed years and my only issue then is if they still come after me for these closed years under some other strategy - hence my concerns on the 20 year limit application

[DealorNoDeal]

So could I feel relatively optimistic for my situation, given the following?

* I have settled with HMRC last year and this included voluntary restitution for 2 closed years : 5 April 2009 and 5 April 2010. I didn’t disclose the loans on these returns but I disclosed the BIK for the interest on loans

* I should get a refund for my voluntary restitution payments on these closed years and my only issue then is if they still come after me for these closed years under some other strategy - hence my concerns on the 20 year limit application

Yes, I would say so. There's slightly more of a theoretical risk with 2009/10 than 2008/9 but I wouldn't lose any sleep over it.

[G0dsquad]

I've been Googling LC news since the review started and happy to see this outcome.

However, I'm not sure how this affects me. Any advice would be appreciated, here's some background..

1. I made the original deadline (Sept 2018 I think)

2. I was on a scheme for 2 tax years, 13-14 and 14-15, roughly half of which I was a company director. However, for the other half I was an employee having stepped down. My 'assignment' in the latter half was with a secondary company who I was never a director of.

3. The scheme was advised by our accountancy firm who are a specialist tax advisory.

4. HMRC hugely delayed my settlement figures (as with many others) to the point where I've still not received them. I contacted them at various points in the year, especially when the 2nd deadline (online) was declared. When I did get a response was advised that I did not need to file online as I'd made the original deadline. Once the LC review was official, I then opted to delay settlement until post review, under the proviso that I would enter into settlement.

So a few questions:

1. Given the Loan Charge is being changed, what are people's general positions? Would you consider that the original settlement disclosure in 2018 was performed under 'duress' due to fear of the loan charge? In this case, would you now proceed not to settle at all?

2. I've still not found clarity on whether Employer's NI is chargeable. I'm unsure as to whether the company that I worked for / part directed has paid the Em. NI due - can this still be passed on to myself potentially? How would this work given I wasn't a director the whole time? There's no mention of it here: Disguised remuneration: guidance following the outcome of the independent loan charge review - GOV.UK

3. Are people now generally waiting for personal responses from HMRC to advise on the next course of action? It appears the September 2020 option for self assessment would be the best one for me, should I still have to settle.

4. For the above point, because I would still be settling, can anyone clarify whether I still need to declare the loans in my self assessment for 18/19? I'm thinking no, as I've a separate settlement arrangement to follow up on.

[DealorNoDeal]

So a few questions:

1. Given the Loan Charge is being changed, what are people's general positions? Would you consider that the original settlement disclosure in 2018 was performed under 'duress' due to fear of the loan charge? In this case, would you now proceed not to settle at all? The LC review doesn't really change anything for post-2010 years like yours.

2. I've still not found clarity on whether Employer's NI is chargeable. I'm unsure as to whether the company that I worked for / part directed has paid the Em. NI due - can this still be passed on to myself potentially? How would this work given I wasn't a director the whole time? There's no mention of it here: Disguised remuneration: guidance following the outcome of the independent loan charge review - GOV.UK Don't think employer's or employee's NI is due with settlement. I think NI only applied to people who were self-employed (class 4).

3. Are people now generally waiting for personal responses from HMRC to advise on the next course of action? It appears the September 2020 option for self assessment would be the best one for me, should I still have to settle. I may be wrong but I would have thought you would still be required to make an LC declaration through 2018/19 SA.

4. For the above point, because I would still be settling, can anyone clarify whether I still need to declare the loans in my self assessment for 18/19? I'm thinking no, as I've a separate settlement arrangement to follow up on. I would have thought yes, see previous answer.

Not 100% sure about the above; others may wish to correct.

[NotSoCompliant]

Not 100% sure about the above; others may wish to correct.

Regarding point #1, it looks like the only way, in the scenario mentioned, that the LC doesn’t apply is if you fully disclosed the scheme details in the returns and HMRC didn’t take any action. Per HMRC guidance:

“the loan charge will not apply to outstanding loans made in any tax years before 6 April 2016 where the avoidance scheme use was fully disclosed to HMRC and HMRC did not take action (for example, opening an enquiry)”.


If your tax years had an open enquiry then the LC still applies.As the outstanding tax liability still needs to be met.

If your tax years were closed (ie no open enquiry) and you did not fully disclose then it looks like the LC still applies (based on the HMRC guidance mentioned above).

[DealorNoDeal]

“the loan charge will not apply to outstanding loans made in any tax years before 6 April 2016 where the avoidance scheme use was fully disclosed to HMRC and HMRC did not take action (for example, opening an enquiry)”

And you can bet your bottom dollar that there will be very few closed years which satisfy HMRC's notion of "full disclosure".

[lowpaidworker]

Anyone know the proceedure/process for delaying completing the loans bit on the SA Return till September 2020.

[webberg]

Anyone know the proceedure/process for delaying completing the loans bit on the SA Return till September 2020.

Nobody knows the answer to the above.

We are all waiting on the proposed new legislation.

[lowpaidworker]

Nobody knows the answer to the above.

We are all waiting on the proposed new legislation.

Since posting that above Ive managed to find this and read it. - Disguised remuneration: guidance following the outcome of the independent loan charge review - GOV.UK says updated 20 Dec

Under the section Detailed guidance by customer group Not sure whether I personally fit into 2 or 3, and I would imagine that will include a lot of poeple. Ive engaged HMRC but still havent had any response.