HMRC say the loan is taxable, therefore it cannot be a loan. Right? WRONG

[Iter]

If no loan agreement exists, then the contractor should not have to pay back the monies. But (from reading the posts here), it seems that (legally) a loan agreement was place for the vast majority of the schemes that operated, despite what the recipient of those monies may think (or may have thought at the time).

However, whether there was or was not a loan in place does not alter the view that tax is due (in the eyes of HMRC, by the contractor) on the original payment from the client to the employer/scheme operator.

Tax has been paid and settled with HMRC

[Confusedetc]

Please see above.

Thanks for the reply, I am unsure what you mean by the below though:
This is the loan charge? Be aware that paying the loan charge settles nothing. eventually you will have to agree the tax position for each year you had payments and the amount paid via the loan charge will be a credit against that but there may be more to pay.

HMRC informed me I cannot settle because I missed that opportunity, so I have followed everything they have told me to do both by letter and many phone conversations with the loan charge dept, to combine the outstanding loans, split by 3, add that amount to each tax year for last year and next 2 tax years, and pay the tax owed which is calculated which I should have paid had it been classified correctly originally (and not hidden).

What more can they expect me to pay and do ? they have told me doing this will clear this situation up and I can then move on from it. I should not owe them anything else and have to further worry about more unknown charges being levied on me which you seem to indicate.

[DealorNoDeal]

It makes you wonder who will be next to try and milk this...

Sicilian mafia acquire contractor loans

[DealorNoDeal]

...they have told me doing this will clear this situation up and I can then move on from it...

Have you got it in writing from HMRC that paying the loan charge will be the end of the matter? That it will finalise your affairs?

[Confusedetc]

Have you got it in writing from HMRC that paying the loan charge will be the end of the matter? That it will finalise your affairs?

Nope, but why should I.
I have done what they have asked of me both by letter and phone, and no where does it say in their letter regarding the loan charge, that after doing everything they have asked for, that actually that's not everything, there is more, but they just haven't told me what yet.

Am I supposed to go on the rest of my life being worrying about being punished and incurring further fines and being asked for more money, for being stupid and getting scammed, when I have gone to every effort to pay the tax that was not paid on that money I received.

[webberg]

HMRC informed me I cannot settle because I missed that opportunity, so I have followed everything they have told me to do both by letter and many phone conversations with the loan charge dept, to combine the outstanding loans, split by 3, add that amount to each tax year for last year and next 2 tax years, and pay the tax owed which is calculated which I should have paid had it been classified correctly originally (and not hidden).

What more can they expect me to pay and do ? they have told me doing this will clear this situation up and I can then move on from it. I should not owe them anything else and have to further worry about more unknown charges being levied on me which you seem to indicate.

Then HMRC has told you a load of nonsense.

They have told you how to declare and pay the loan charge. This is a tax on accumulated loans as at 5th April 2019.

The tax due on the loans is actually calculated by adding to your other income the loans drawn in each tax year, assuming that you have open enquiries for those years. If you do not have enquiries then HMRC will tell you that the loan charge applies - but it may not.

I suggest that if you have all of HMRC's advice in writing, then you share it with an adviser and have them obtain a sign off from HMRC that everything is settled.

I fear it is not settled. I fear that some idiot in HMRC has fooled you and that is frankly unacceptable.

happy to help if you want to contact me. (Free of charge)

[RickG]

Very good question and one that is being tested in tribunal right now.

Playing Devil's Advocate here, why did you, the recipient of the money, not ask HMRC - at the time - why no tax was being withheld from the payment?

Could you share details of which tribunal? Or maybe provide a summary once it has been decided on?

[DealorNoDeal]

Nope, but why should I.
I have done what they have asked of me both by letter and phone, and no where does it say in their letter regarding the loan charge, that after doing everything they have asked for, that actually that's not everything, there is more, but they just haven't told me what yet.

Am I supposed to go on the rest of my life being worrying about being punished and incurring further fines and being asked for more money, for being stupid and getting scammed, when I have gone to every effort to pay the tax that was not paid on that money I received.

Don't get me wrong, I'm not having a pop at you or anything.

It's just that, strictly speaking, paying the loan charge does not finalise matters. Any enquiries HMRC opened into your scheme tax returns will still remain open. Likewise, any assessments (discoveries) they raised into your tax returns will still be open. Only settling would have closed all this off (which perversely they wouldn't let you do).

FWIW, IMO, I doubt HMRC will bother you again. (But webberg doesn't share this view. He believes HMRC will continue to pursue people, who've paid the loan charge, until everything is completely finalised.)

[webberg]

Could you share details of which tribunal? Or maybe provide a summary once it has been decided on?

In due course yes.

I understand that there is an oral hearing into the latest action due to take place next week (virtually of course).

It's available to join for the public and we will of course.

[Confusedetc]

Then HMRC has told you a load of nonsense.

They have told you how to declare and pay the loan charge. This is a tax on accumulated loans as at 5th April 2019.

The tax due on the loans is actually calculated by adding to your other income the loans drawn in each tax year, assuming that you have open enquiries for those years. If you do not have enquiries then HMRC will tell you that the loan charge applies - but it may not.

I suggest that if you have all of HMRC's advice in writing, then you share it with an adviser and have them obtain a sign off from HMRC that everything is settled.

I fear it is not settled. I fear that some idiot in HMRC has fooled you and that is frankly unacceptable.

happy to help if you want to contact me. (Free of charge)

I see what you mean now, on their website it says:
Open enquiries
Paying the loan charge does not resolve the underlying tax dispute with HMRC for the years in which loans were made. Tax years that are subject to an open enquiry or assessment will still need to be resolved, either by way of settlement with HMRC or through litigation.
>>

Made contact for help thanks