My take on a few things. I've tried to keep this concise because it's easy to lose focus in these situations.
2017/18
This year might be in the clear now because it's over the 4 years for HMRC to raise a discovery assessment (they had until 5 Apr 2022). However, it might still get caught by the Loan Charge, or HMRC might try to invoke the 6-year rule for carelessness.
Loan Charge
I'm not sure if this will apply or not but technically it would only be for years up to 2018/19. All loans received up to 5 Apr 2019 would be added to your income in the 2019/20 tax year. Has the scheme provider ever said why the Loan Charge would not apply to this scheme?
Interest & Penalties
If you settle, you will definitely have to pay late payment interest on top of the tax & nics. It won't be a lot; about 12% for 2017/18, 9% for 2018/19 and less for later years. I don't know if HMRC will impose any penalties, and you won't find out until you approach HMRC for settlement.
What to do next
2017/18
This year might be in the clear now because it's over the 4 years for HMRC to raise a discovery assessment (they had until 5 Apr 2022). However, it might still get caught by the Loan Charge, or HMRC might try to invoke the 6-year rule for carelessness.
Loan Charge
I'm not sure if this will apply or not but technically it would only be for years up to 2018/19. All loans received up to 5 Apr 2019 would be added to your income in the 2019/20 tax year. Has the scheme provider ever said why the Loan Charge would not apply to this scheme?
Interest & Penalties
If you settle, you will definitely have to pay late payment interest on top of the tax & nics. It won't be a lot; about 12% for 2017/18, 9% for 2018/19 and less for later years. I don't know if HMRC will impose any penalties, and you won't find out until you approach HMRC for settlement.
What to do next
- At the very least, if you do nothing else, provide the information for 2018/19 that HMRC have asked for.
- Decide if you want to settle and get closure on this mess. If so, approach HMRC asap.
- If you would prefer to get professional help with settling, try a local accountant. Be careful with specialist tax advisors who could charge hefty fees for what is a fairly straightforward process.
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