Loan charge - HMRC update

[Delendog]

So that says interest will be applied to tax due.

Yes and the link it has if followed has no mention of forward interest that I could see:-

Interest rates for late and early payments - GOV.UK

[lowpaidworker]

Interesting in any TTP or where HMRC need a financial statement included they ask about your partners/ wifes income. I didn't think they could do that? Isn't your wife/partner considered a seperate entity.

Lets be realistic most people who used one of these schemes for 3 or more years will need considerable time to pay. Once these TTPs start to get agreed I would love to know the average TTP. Some of these people are nearing retirement and will never pay it.

I can see situations being created where married people get divorced to minimise payments and protect some sort future for their children.

[webberg]

100% agree but it looks as if forward interest is not charged for TTP on the LC.

Forward interest applies to tax agreed to be due but not paid, usually as a result of a settlement.

Interest on tax due under the loan charge is amended, but THAT IS NOT FORWARD INTEREST.

I can see that this will be me trying to be King Canute here so I'll just go back into my box.

[wilks]

+1

It's not obvious that even having a DOTAS number on the return would satisfy that.

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Its pretty obvious if you actually read their detailed guidance also published yesterday rather than the draft legislation. DOTAS on SATR or full whitespace disclosure in SATR will likely be the only disclosures that count. Very few people would have done this and not received an enquiry as this would only happen due to an HMRC oversight which will be unlikely 2011 onwards. See here: Find out how the changes to the loan charge affect you - GOV.UK


"For the purposes of the loan charge, HMRC will consider a loan scheme as disclosed if you provided sufficient information in your return or accompanying documents to enable HMRC to identify the loan scheme and specifically the person to whom the loan was made and the loan arrangement. For example, if the avoidance scheme promoter had provided the scheme user with a disclosure of tax avoidance scheme (DOTAS) number, it is reasonable for you to have enclosed this number on your return. Alternatively, where the loan scheme was not disclosed to HMRC (and there was no DOTAS number) it would be reasonable for you to refer to your loan arrangement elsewhere on your return.

[DealorNoDeal]

Its pretty obvious if you actually read their detailed guidance also published yesterday rather than the draft legislation. DOTAS on SATR or full whitespace disclosure in SATR will likely be the only disclosures that count. Very few people would have done this and not received an enquiry as this would only happen due to an HMRC oversight which will be unlikely 2011 onwards.

Indeed. In fact, this might sum it up better.

"For the purposes of the loan charge, HMRC will consider a loan scheme as disclosed if you provided sufficient information in your return or accompanying documents to enable HMRC to open an enquiry"

In other words, apart from exceptional circumstances, if they didn't open an enquiry (your year is closed) then you didn't provide enough info.

[webberg]

Bear in mind that the incidence of DOTAS disclosure post April 2011 was very low.

Almost all schemes decided that they were not required to disclose and did not.

[DealorNoDeal]

Bear in mind that the incidence of DOTAS disclosure post April 2011 was very low.

Almost all schemes decided that they were not required to disclose and did not.

There's a surprise. I bet after they brought in APNs, DOTAS disclosures dried up completely.

Scheme promoters were very adept at bypassing any new legislation that was brought in. Unfortunately, that left the users sailing perilously close to the wind.

[webberg]

There's a surprise. I bet after they brought in APNs, DOTAS disclosures dried up completely.

Scheme promoters were very adept at bypassing any new legislation that was brought in. Unfortunately, that left the users sailing perilously close to the wind.

Some schemes went to Tribunal to defend why they did not disclose (Hyrax etc) and have not fared well.

Some schemes did not disclose at the time they were active but have since decided that they should - entirely unrelated to the fact that a tax demand is a good reason to sell some "fix" which also gets around the loan charge?

Unfortunately all of this activity, as with JRs against the ability of the Government to pass whatever legislation is chooses, allows promoters and others to hide behind such distractions rather than address the core issue of whether a liability arises from the scheme.

[DealorNoDeal]

Some schemes went to Tribunal to defend why they did not disclose (Hyrax etc) and have not fared well.

Some schemes did not disclose at the time they were active but have since decided that they should - entirely unrelated to the fact that a tax demand is a good reason to sell some "fix" which also gets around the loan charge?

Unfortunately all of this activity, as with JRs against the ability of the Government to pass whatever legislation is chooses, allows promoters and others to hide behind such distractions rather than address the core issue of whether a liability arises from the scheme.

I don't envy you trying to clear up the mess left by this lot.

[webberg]

I don't envy you trying to clear up the mess left by this lot.

The single biggest problem in clearing up this mess is the fact that contractors who used the schemes, still lend credence to what promoters and their then advisers continue to say.

Rather than listen to the (admittedly few) advisers who have no bias or conflict, they chose to think that promoters et al have some magic bullet waiting to be fired.

They don't.

The schemes certainly post 2010 were always at best a punt and at worst borderline evasion.

The rules have all changed and I;ve not seen one opinion from a scheme which I believe would be accepted by a Tribunal as a valid argument.

Clearly I could be wrong but given the general drift towards a technical argument that we first deployed over 4 years ago and which is now being used by just about all serious players in the market, it has more going for it than the ramblings of yesterdays people.