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Loan Charge

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    Loan Charge

    Hi all,
    Last year I received the generic loan charge letter. I was with an umbrella company for a year where I was getting paid part loan (direct from employer)/part salary. Having spoken to WTT consulting they advised me to write to HMRC stating that I believe this does not apply to me as at the time of taking loan payments from my former umbrella company, these were not loans from a 3rd party. The loans were paid direct from the employer on commercial terms.

    I have disclosed my loans via the GOV website but have not included them in my self-assessment tax return for the reason above.

    I was just curious to see if anyone had done the same as me and received a response back from HMRC?

    Cheers
    Danny

    #2
    Originally posted by danp View Post
    Hi all,
    Last year I received the generic loan charge letter. I was with an umbrella company for a year where I was getting paid part loan (direct from employer)/part salary. Having spoken to WTT consulting they advised me to write to HMRC stating that I believe this does not apply to me as at the time of taking loan payments from my former umbrella company, these were not loans from a 3rd party. The loans were paid direct from the employer on commercial terms.

    I have disclosed my loans via the GOV website but have not included them in my self-assessment tax return for the reason above.

    I was just curious to see if anyone had done the same as me and received a response back from HMRC?

    Cheers
    Danny
    HMRC may not be your only issue.

    Maybe your 'employer' will go into insolvency in the future leaving you on the list of creditors with the liquidator on your back.

    This is the tactic of choice these days.

    Speak to your 'employer' and get things in writing while they are still around.

    Comment


      #3
      Originally posted by danp View Post
      Hi all,
      Last year I received the generic loan charge letter. I was with an umbrella company for a year where I was getting paid part loan (direct from employer)/part salary. Having spoken to WTT consulting they advised me to write to HMRC stating that I believe this does not apply to me as at the time of taking loan payments from my former umbrella company, these were not loans from a 3rd party. The loans were paid direct from the employer on commercial terms.

      I have disclosed my loans via the GOV website but have not included them in my self-assessment tax return for the reason above.

      I was just curious to see if anyone had done the same as me and received a response back from HMRC?

      Cheers
      Danny
      Have you joined LCAG?

      Comment


        #4
        Originally posted by BrilloPad View Post
        Have you joined LCAG?
        Why would he when the LCAG states it's fighting issues regarding loans from third parties and the OPs loan came from his employer directly?

        as WTT states the loan doesn't meet the criteria the loan charge targets?
        merely at clientco for the entertainment

        Comment


          #5
          Hypothetical scenario.


          Let us assume there was a user of an arrangement which is caught by the loan charge, where the following apply:

          1. They first used such schemes between 2011 and 2013, and no SA was ever raised.
          2. They also used separately after 2016, for which there are now open inquiries.
          3. They were asked to provide details of ALL arrangements between 2010-2019.
          4. The users decided NOT to disclose anything prior to 2014, which is all protected in the sense that an SA was never raised, and that exceeds the 6y limit that HMRC have to raise SAs.

          The open question is on this:
          If those users decided either intentionally or unintentionally not to disclose anything regarding (1), what are now HMRC's powers to try to open those years?

          we understand that disclosure is statutory. This is a given!
          But in this hypothetical scenario what are the powers to open any inquiry into (1) if no disclosure is made on the 2019 return?

          Thank you.







          Comment


            #6
            Originally posted by ToHaLe View Post
            Hypothetical scenario.


            Let us assume there was a user of an arrangement which is caught by the loan charge, where the following apply:

            1. They first used such schemes between 2011 and 2013, and no SA was ever raised.
            2. They also used separately after 2016, for which there are now open inquiries.
            3. They were asked to provide details of ALL arrangements between 2010-2019.
            4. The users decided NOT to disclose anything prior to 2014, which is all protected in the sense that an SA was never raised, and that exceeds the 6y limit that HMRC have to raise SAs.

            The open question is on this:
            If those users decided either intentionally or unintentionally not to disclose anything regarding (1), what are now HMRC's powers to try to open those years?

            we understand that disclosure is statutory. This is a given!
            But in this hypothetical scenario what are the powers to open any inquiry into (1) if no disclosure is made on the 2019 return?

            Thank you.






            IF they suspect "foul play" or deliberate misdirection they can open up anything they like if they think it worthwhile. The 6 and 20 year barriers are not actually stated in law, they are more pragmatic boundaries.
            Blog? What blog...?

            Comment


              #7
              Originally posted by ToHaLe View Post
              Hypothetical scenario.


              Let us assume there was a user of an arrangement which is caught by the loan charge, where the following apply:

              1. They first used such schemes between 2011 and 2013, and no SA was ever raised.
              2. They also used separately after 2016, for which there are now open inquiries.
              3. They were asked to provide details of ALL arrangements between 2010-2019.
              4. The users decided NOT to disclose anything prior to 2014, which is all protected in the sense that an SA was never raised, and that exceeds the 6y limit that HMRC have to raise SAs.

              The open question is on this:
              If those users decided either intentionally or unintentionally not to disclose anything regarding (1), what are now HMRC's powers to try to open those years?

              we understand that disclosure is statutory. This is a given!
              But in this hypothetical scenario what are the powers to open any inquiry into (1) if no disclosure is made on the 2019 return?

              Thank you.
              So HMRC look at their historic records and then at your 2018/19 tax return and ask where is the money from 2011/13 that should be on there.

              And they won't be querying your 2011/13 returns but the far more recent return 2018/19 return that is missing details that they are aware of.

              Worse it's no longer avoidance but tax evasion so that will be instant 100% fines and worse...
              merely at clientco for the entertainment

              Comment


                #8
                Thank you both.

                And at best, they have to look first the record, then ask specific questions, and then a defence can be decided I suppose even if not acting on the 2019 return fully, either intentionally or unintentionally worsens the situation.

                I think the approach one takes can be varied and it is not necessarily all gloom and doom.

                The point here is that, at the time, there was a given thinking, and a given reaction to all correspondence based on knowledge at THAT time.

                Hence if the law has changed since, this is to me the very essence of the retrospective element.

                Mr HMRC, do your work now, within the bounds of what you are allowed to do now.

                You ask to come forward with what happened a decade ago. Give your specific reasons first.

                People may just chance it now. Just kindly please do not respond with the authority as if you definitively know what exact bad they will do.

                You had some record mr HMRC? Why the heck did you wait for this to be passed into law to act on the information?

                The counter thought is that they are actually pretty incompetent and don’t have the information.

                Disclaimer: the above said the devil’s advocate.

                Just because you say they have all the information, who is to say that there isn’t someone else that could claim that they actually don’t?

                If you actually have the full fact of the truth then it would be useful to disclose.

                further hypo scenarios:
                what if people leave the country?
                or god forbid, get sick and die?

                There’s got to be some fact in the note I seen somewhere: if you are above the 6y it is in hmrc’s responsibility to prove the fault, stated or unstated, that has to be factual.

                because there are still people in that 2010-2014 (now 2015) that are fully unaware that they are caught.

                thanks again.

                disclaimer2: this is not done to annoy. But to provoke. Descent conclusions must be backed by actual facts and not guided by fear.


                Comment


                  #9
                  Originally posted by ToHaLe View Post
                  A pile of gibberish

                  I really can't be bothered to try and second guess what HMRC will do.

                  The important fact to remember is that HMRC have the 2018/19 tax returns to play with. If you are honest on them nothing to worry abut. If you weren't honest and HMRC come calling there is now a set of explicit options and phrases that HMRC can use that weren't available earlier.

                  As someone mentioned earlier this week when talking about a VAT case - HMRC are very happy to just send a letter to leave a year open and then let the tax payer hang on for years while the money owed slowly ratchets up.
                  merely at clientco for the entertainment

                  Comment


                    #10
                    Thanks eek, but I am also sorry to say that I still don't have an answer to my core question.

                    Fine that indeed HMRC can have a year open and can try things.
                    Fine that indeed this specific year, 2019, is special for loan charge matters.

                    But what isn't so fine is the following:
                    When there is some dispute raised, that has to be made factual on the very year that it emerges. Else what is the dispute based of?

                    Now those years are closed.
                    Any information to open, is not new, HMRC always possessed as some claim.
                    The 4 and 6 year windows where not used.

                    Now what?

                    As some may stipulate that, HMRC have all the power, all the knowledge, can open this year and hunt you down like some unprotected wild game.

                    Some others might stipulate, that they simply do not have the powers, they expect you to do the work for them, and set the lamb in line for the slaughter house.

                    To bring a year in dispute, they need to come fwd with their suspicion and proof.

                    The question is again: can they open now a year prior to 6y? Can they open 2014-2015 and prior when those where never open?

                    There must be an answer.

                    Comment

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