Loan charge review - Government response is here

[DealorNoDeal]

Is it not possible they will just APN anything they cannot get with LC??

I would imagine they've already APN'd most schemes.

I suppose they could go after post-2004* schemes which weren't registered under DOTAS.

* 2004 was when DOTAS came in

[Hitchphil]

confused again.

So my last loan was in the 2010-11 tax year & is c£4k, the rest are from before then, i have a settlement figure from HMRC that includes all of my loans but haven't paid it. My Ltd co & umbrella have been closed for years & the loans haven't been written off ..........

So now HMRC will do what?

Recalculate settlement but only for the 2010/11 loan?

Then what? do I still owe tax etc on the pre 2010 loans? & they restart the interest charges? & offer another settlement opportunity or is that it closed & finished?

[DealorNoDeal]

So my last loan was in the 2010-11 tax year & is c£4k, the rest are from before then, i have a settlement figure from HMRC that includes all of my loans but haven't paid it. My Ltd co & umbrella have been closed for years & the loans haven't been written off ..........

So now HMRC will do what?

Recalculate settlement but only for the 2010/11 loan?

Then what? do I still owe tax etc on the pre 2010 loans? & they restart the interest charges? & offer another settlement opportunity or is that it closed & finished?

Depends on whether the pre-2010 years are open (protected) or closed (unprotected). See FAQ:
https://www.contractoruk.com/forums/...010-loans.html

[meanttobeworking]

Hmmm, so I settled in Jan 2016 for loans received before Dec 2010.

Which means, as I read things, that I get no refund - right?

[dammit chloe]

Hmmm, so I settled in Jan 2016 for loans received before Dec 2010.

Which means, as I read things, that I get no refund - right?

Not sure that's right. pre-2010 are out of scope for Loan Charge ( although perhaps not other things ) so if settled under voluntary settlement then I would have thought a refund is due.

PS then you can pay it all back when they find a way to tax them anyway. C'est la vie.

[meanttobeworking]

Not sure that's right. pre-2010 are out of scope for Loan Charge ( although perhaps not other things ) so if settled under voluntary settlement then I would have thought a refund is due.

PS then you can pay it all back when they find a way to tax them anyway. C'est la vie.

Sadly I think it is true... guidance says refunds will be issued to those reaching settlement post March 2016. I settled two months earlier.

I suspect the logic is that people that settled post March 2016 settled under the ominous threat of the impending Loan Charge, which turned out to be unfair. Never mind about those of us that were pressured into settling under the ominous threat of undisclosed and undefined action, which is clearly MORE fair ?

Presumably the refund would be issued on the understanding that the enquiry was re-opened anyway, so as you say, they would have got it in the end anyway.

[PeterF]

Everything of mine is/was pre-2010, so initially this sounded like reasonable and exciting news. But:

2.12 While loans made before 9 December 2010 are removed from the scope of the Loan Charge, the underlying tax liability for loans made prior to this date remains. HMRC will continue to pursue those liabilities through enquiries and assessments, and where necessary through litigation. HMRC will publish updated settlement terms for all taxpayers in this position as set out above.

2.13 The Government will also invest in a new HMRC team to conclude enquiries and bring in the tax due from people who in the past have used DR schemes, and other forms of tax avoidance. The team will engage positively with those who wish to settle their affairs and will have the resources and skills to pursue cases to tribunal and through the courts where that is necessary to collect what is due. This will ensure people who entered into DR avoidance schemes before 9 December 2010 still pay the tax due and make their contribution to funding public services. Further detail will be announced at the Budget.

Yeah, nevermind.....

[dammit chloe]

Sadly I think it is true... guidance says refunds will be issued to those reaching settlement post March 2016. I settled two months earlier.

I suspect the logic is that people that settled post March 2016 settled under the ominous threat of the impending Loan Charge, which turned out to be unfair. Never mind about those of us that were pressured into settling under the ominous threat of undisclosed and undefined action, which is clearly MORE fair ?

Presumably the refund would be issued on the understanding that the enquiry was re-opened anyway, so as you say, they would have got it in the end anyway.

Sorry to hear that. So much is arbitrary rather than based on a fair, rule of law based system.

I hope it wasn't too much, if it was then please consider still helping the fight. The package is not the final legislation and can be amended if we can keep MPs onside.

[webberg]

I'll try to pick up a few points.

If you have had an APN, then the year in question is "open", i.e. under enquiry. The removal of the loan charge for certain years (pre 9/12/10 and post that time if disclosed) will make no difference. The year is under enquiry and the tax needs to be settled and until it is, the disputed amount, per the APN, remains with the Government.

Where you have had a loan written off, you have to look at whether this was pre or post a settlement. If this was pre any settlement, then a write off AFTER 6/4/17 is a taxable event (sec 554C(1)(ab)). A write off, pre settlement and pre 6/4/17, probably not a taxable event.

If you have had a loan written off pre settlement but post 6/4/17, you have already triggered a tax charge.

If you are post settlement (i.e. agreed with HMRC) and have had a loan written off the scenario might (I say "might" because until we see the law we will not know for sure) be different depending on whether the year you have settled is open or not.

If it is open, then the settlement terms usually exempt that loan from any further tax charge assuming things are done within a certain time.

If it is closed and you have made a voluntary restitution, you can claim a refund. If so, then the loan amount has not been taxed. Consequently a write off post 6/4/17 may well be taxable.

DON'T FORGET THAT THE CHANGES TO THE LOAN CHARGE DO VERY DEFINITELY NOT MEAN THAT HMRC CANNOT CHASE ALL YEARS FOR WHICH THEY CLAIM A VALID ENQUIRY AND ALL YEARS STILL IN CHARGE, BROADLY 2015/16 AND LATER.

(I also expect to see HMRC claim that 2013/14 and later also remain in charge and predict that a legal fight will ensue if that is the case).

[webberg]

2.12 While loans made before 9 December 2010 are removed from the scope of the Loan Charge, the underlying tax liability for loans made prior to this date remains. HMRC will continue to pursue those liabilities through enquiries and assessments, and where necessary through litigation. HMRC will publish updated settlement terms for all taxpayers in this position as set out above.

This should not be a surprise.

The loan charge never was an end to itself. It was always a means to "draw a line under" DR schemes and was more akin to a generally applicable APN than anything else.

I know also that it was never a popular view but we have been saying this pretty much since the loan charge emerged.