Loan Charge post on LinkedIn by Webber

[GregRickshaw]

Not sure if you guys have seen this but Webber posted something on Linked In which is all fairly straight forward....

Apart from the paragraph highlighted below (new assessments?) I'm not involved this time around but... what?


"Contractors don't know about the loan charge!

The survey published below contains some truly shocking facts.

Just 19% of contractors are aware of the loan charge.

That means that when the discovery assessments start landing over the next six months, 4 in 5 contractors who used a scheme between 2011 and 2019 will be in for a very, very unpleasant surprise.

I've always been cynical about these surveys and believe that in many cases, they are designed to arrive at a pre ordained answer. If however this survey is accurate then HMRC, the tax advisory sector, contractor agencies, umbrellas and all others in the transaction chain have failed contractors."

Article and survey result.

https://www.linkedin.com/feed/?msgCo...true&trk=false

https://www.gov.uk/government/public...d-remuneration

[Fred Bloggs]

Not at all surprised. I found the overwhelming majority of Ltd Co contractors I worked with didn't really have a grasp even of what IR35 was. So ignorance of the loan charge doesn't surprise me one bit.

[eek]

I'm guessing the logic goes - anyone who was subject to a loan scheme and hasn't filled in the appropriate fields on the 2019/20 tax return is in for a nasty surprise...

And a lot of people probably never filled in anything when they used a scheme and may have completely missed the loan charge requirements or wilfully ignored it.

[GregRickshaw]

I'm guessing the logic goes - anyone who was subject to a loan scheme and hasn't filled in the appropriate fields on the 2019/20 tax return is in for a nasty surprise...

And a lot of people probably never filled in anything when they used a scheme and may have completely missed the loan charge requirements or wilfully ignored it.

Thanks again eek

[GregRickshaw]

Not at all surprised. I found the overwhelming majority of Ltd Co contractors I worked with didn't really have a grasp even of what IR35 was. So ignorance of the loan charge doesn't surprise me one bit.

Agreed. I was more shocked about the, new discovery assessments that's what caught my eye more about the article.

[eek]

Agreed. I was more shocked about the, new discovery assessments that's what caught my eye more about the article.

They probably aren't new - more we know what you did in 2011/15 and we now have an accessible / usable year on which we can pin it on you

[DealorNoDeal]

Just 19% of contractors are aware of the loan charge.

That means that when the discovery assessments start landing over the next six months, 4 in 5 contractors who used a scheme between 2011 and 2019 will be in for a very, very unpleasant surprise.

I'm not sure this can be deduced from the results. Yes, only 19% of PSC contractors (and 9% of Umbrella contractors) were aware of the LC. But this doesn't mean that the 81% (and 91%), who weren't aware, used a loan scheme.

As far as I can see, they didn't ask people who'd actually used a loan scheme whether they were aware of the LC.

------------

I've no doubt there will have been a fair amount of non-compliance with the LC but I'd be surprised if this is because people were unaware of it.

[suitcase]

I'm guessing the logic goes - anyone who was subject to a loan scheme and hasn't filled in the appropriate fields on the 2019/20 tax return is in for a nasty surprise...

And a lot of people probably never filled in anything when they used a scheme and may have completely missed the loan charge requirements or wilfully ignored it.

It's even nastier when you actually stopped contracting during those years. I went permanent from 2016 to 2018, did a couple of small contracts then again permanent early 2019 until 2021. So in essence I didn't have to do self assessment or anything like that and was not aware of any loan charge or deadline until I got a recent letter to submit a self assessment from for the 2018/2019 tax year - which was 3 years after I used any loan based umbrellas.

[Jumper]

Hi suitcase, have you managed to settle your affairs now with HMRC? Once submitted, assuming you provided details of the loans and paid the loan charge? Would be interested to hear about your experience.

[GregRickshaw]

Not sure what suitcase did, but I settled with HMRC so I can give you my experience. I received a settlement figure on the Open enquiries and I negotiated a long TTP (I since reduced it and is all paid off now).

I used scheme(s) in 2010/2011 Sanzar and Garraway, but I was not hit by the loan charge on the return of 2018/19 as I had provided the scheme name/number etc., in my DOTAS section on my SAR at the time of the SA etc.

I still had to pay back the DR which is fair enough I was greedy, vulnerable and naive in equal measures. However I did not get hit by the actual loan charge.

I won't mention what happened next as it's well documented.

I think Webber is referring to the loan charge which is only applicable if you haven't declared the use of an Avoidance Scheme and HMRC have an Open enquiry on you and your scheme. He is really talking about how most people don't know about the loan charge itself, which isn't the DR.

What made me look twice was the new determinations may be sent out to unsuspecting contractors, such as suitcase possibly?