Declaring pre 2010 Loans on your SA : Warning

[Wimbledon]

Quick warning to what happened to me this afternoon. I only have pre 2010 loans and have asked for settlement, but decided against it. I still send HMRC the offer, asking them to remove the interest part and give me 4 years to pay. (they currently want full payment in 30 days) Emailed it to HMRC on Sunday, not expecting much reaction.

Today, I contacted the CL Settlements team, 03000534226, to ask if my note has been received. The officer, Mark, said yes, but there was not sufficient time for settlement so it was rejected. I then said, "pity" and confirmed I do not need to do anything more. He then insisted, because my loans are "protected" i need to declare them on my SA for 2018/2019. This is news to me. He even explained how the loan charge would be applied. He gave me the number of the Loan Charge team so they can "release" my already submitted return to add the loans.

I panicked, a bit. Checked the internet, confirmed that what I believed all along, pre 2010 need not be declared.

I phone HMRC CL team again. Paras this time. Explain my story. He is more helpful, says he will put in a note to a manager, to see if they can push through the settlement. For that i need to provide a signed offer in email. Otherwise i will need to submit my loan balances (because they "protected") in my 2018/2019 return and be subject to loan charge. I tried to explain but he insisted even pre 2010 loans protected are in scope. He gave me another HMRC number to release my SA.

The impact of the loan charge would be astronomical for me, so I have now sent in the Offer signed, with a request for time to pay.

I have subsequently emailed WTT and they agreed with my assessment, that i do not need to declare pre 2010 loans.

My fear is that I have been the victim of a clever HMRC sting, where they scare you into settlement with the Loan Charge.

Please be careful when dealing with the CL team, they clearly trying to trick people into settlement.

[eek]

Quick warning to what happened to me this afternoon. I only have pre 2010 loans and have asked for settlement, but decided against it. I still send HMRC the offer, asking them to remove the interest part and give me 4 years to pay. (they currently want full payment in 30 days) Emailed it to HMRC on Sunday, not expecting much reaction.

Today, I contacted the CL Settlements team, 03000534226, to ask if my note has been received. The officer, Mark, said yes, but there was not sufficient time for settlement so it was rejected. I then said, "pity" and confirmed I do not need to do anything more. He then insisted, because my loans are "protected" i need to declare them on my SA for 2018/2019. This is news to me. He even explained how the loan charge would be applied. He gave me the number of the Loan Charge team so they can "release" my already submitted return to add the loans.

I panicked, a bit. Checked the internet, confirmed that what I believed all along, pre 2010 need not be declared.

I phone HMRC CL team again. Paras this time. Explain my story. He is more helpful, says he will put in a note to a manager, to see if they can push through the settlement. For that i need to provide a signed offer in email. Otherwise i will need to submit my loan balances (because they "protected") in my 2018/2019 return and be subject to loan charge. I tried to explain but he insisted even pre 2010 loans protected are in scope. He gave me another HMRC number to release my SA.

The impact of the loan charge would be astronomical for me, so I have now sent in the Offer signed, with a request for time to pay.

I have subsequently emailed WTT and they agreed with my assessment, that i do not need to declare pre 2010 loans.

My fear is that I have been the victim of a clever HMRC sting, where they scare you into settlement with the Loan Charge.

Please be careful when dealing with the CL team, they clearly trying to trick people into settlement.

The Loan Charge doesn't settle anything.

As for the rest - I suspect that a lot of people currently handling Loan Charge and scheme calls aren't trained in the minutite of the loan charge rules and will be telling people to do things that are incorrect not out of malice but out of a complete lack of training and no interest in learning the detail for something that is just a 3 month secondment.

[luxCon]

The Loan Charge doesn't settle anything.

As for the rest - I suspect that a lot of people currently handling Loan Charge and scheme calls aren't trained in the minutite of the loan charge rules and will be telling people to do things that are incorrect not out of malice but out of a complete lack of training and no interest in learning the detail for something that is just a 3 month secondment.

This is surely more than a lack of training. There have been other reports that HMRC LC agents have insisted that protected years pre-2010 are subject to the Loan Charge.
There has been absolutly zero indication of tis on all HMRC guides published.

Furthermore the LC reporting form on HMRC site does not even allow you to enter a date prior to 9th Dec 2010, therefor it is impossible to even report it on the form.
However there appears to be an orchestrated effort, whether rogue or otherwise, to trick people in to entering unprotected years in to your self assessment in order for the system to then calculate and charge you tax based on that amount.

However if this is true it is devastating to 10,000 of thousand of users.

Can a Tax professional please provide some firm evidence that protected pre-2010 are excluded from LC?

[Paralytic]

As for the rest - I suspect that a lot of people currently handling Loan Charge and scheme calls aren't trained in the minutite of the loan charge rules and will be telling people to do things that are incorrect not out of malice but out of a complete lack of training and no interest in learning the detail for something that is just a 3 month secondment.

This. I'd not trust using anything anyone at HMRC told me unless it was confirmed in an official follow-up communication in writing.

The primary personal goal of the people handling calls is not to help you, but to get you off the call and onto their next one, so that they meet whatever targets they might have. If they do help you, that's a bonus. HMRC is no different from other call centres in that regard.

[eek]

This is surely more than a lack of training. There have been other reports that HMRC LC agents have insisted that protected years pre-2010 are subject to the Loan Charge.
There has been absolutly zero indication of tis on all HMRC guides published.

Furthermore the LC reporting form on HMRC site does not even allow you to enter a date prior to 9th Dec 2010, therefor it is impossible to even report it on the form.
However there appears to be an orchestrated effort, whether rogue or otherwise, to trick people in to entering unprotected years in to your self assessment in order for the system to then calculate and charge you tax based on that amount.

However if this is true it is devastating to 10,000 of thousand of users.

It's a call centre - it really is answer query and move to the next call with your timings recorded for performance review - As I said a lot of people will be answering calls like yours that required detail knowledge and that knowledge doesn't exist.

Can a Tax professional please provide some firm evidence that protected pre-2010 are excluded from LC?

There is only 1 tax professional who posts here and I suspect he's incredibly busy.

Your question has been asked a number of times recently and there is a flow chart somewhere that explains the rules. Basically anything prior to December 9th 2010 should be excluded but find that chart and follow it.

[webberg]

Disguised remuneration: guidance following the outcome of the independent loan charge review - GOV.UK

Para 2 - line 1.

Just as many taxpayers are confused over loan charge and settlement (they are not either/or options), we find that HMRC line officers get very confused over loan charge and open (protected) years.

HMRC officers will think that because the open year enquiries still need to be resolved, then the loan charge will apply.

My guess is that such officers have either not read their briefs or were asleep at the back of the room when the training was delivered.

I do NOT believe that there is a cabal of HMRC officers who are organised enough to want o push a "max tax" campaign on individuals.

[Wimbledon]

Disguised remuneration: guidance following the outcome of the independent loan charge review - GOV.UK

Para 2 - line 1.

Just as many taxpayers are confused over loan charge and settlement (they are not either/or options), we find that HMRC line officers get very confused over loan charge and open (protected) years.

HMRC officers will think that because the open year enquiries still need to be resolved, then the loan charge will apply.

My guess is that such officers have either not read their briefs or were asleep at the back of the room when the training was delivered.

I do NOT believe that there is a cabal of HMRC officers who are organised enough to want o push a "max tax" campaign on individuals.

Thanks Webberg, that would be my hope as well, but i just wish I recorded the calls. The urgency of getting me to declare the loans in my tax return, creating the "special treatment" feeling, then explaining I need not worry because my APN payments would cover the extra tax....then again getting the "special treatment" - "we do not really normally do this" to get me to submit a signed copy of the offer, again explaining how under Article 7 J something I must declare protected loans....I am skeptical, all seems coordinated.

Thanks again to you and the WTT crew - the last few years would have been impossible without you and the rest of the crew.