Loan Charge review and Government response is out

[luxCon]

Loan Charge review and Government response is out
Anyone with understanding of the response can post an idiot's guide please?

And how does this effect pre 2010 /11 DR unsettled liabilities and APNs?

[WTFH]

For reference, here is the response: https://assets.publishing.service.go..._Response_.pdf

[luxCon]

The crazy thing is the review appears not to effect pre 2010 enquiries. Whilst Loan Charge victims get some reduction in liabilities, pre 2010 DR enquiries appear to be uneffected by the review which is absolutely mental

[supercal]

The way I'm reading the governments response is all pre-2010 loans will be treated the same for settlement. Sec 2.5 "It will apply both to the outstanding liabilities arising as a result of the loan charge and the related underlying tax liabilities that exist separate to the loan charge. This reflects the Review’s conclusion that the loan charge was an extraordinary piece of Government policy, which requires an exceptional response."

I believe Sec 2.6 is saying you don't get to settle post 2010 under the new terms and not settle pre 2010 loans.

Hopefully I'm correct in this and can finally put this to bed.

[UnhappyRed]

Disappointed that people who have accepted a lower stand of living to settle are being penalised.

[shookshiver]

The crazy thing is the review appears not to effect pre 2010 enquiries. Whilst Loan Charge victims get some reduction in liabilities, pre 2010 DR enquiries appear to be uneffected by the review which is absolutely mental

The settlement applies to all years including pre 2010. I don't believe that the Gov made a distinction between pre2010 and any other years leading to 2019

[luxCon]

Whilst I am encouraged by the positive posts and hope pre 2010 are now treated more fairly, I read this section of the gov.uk 'review' commentary released yesterday posted below under the heading Background to the measure . Hopefully this paragraph means that the review looked at Loan Charge within its scope, but extends its recommendations to all outstanding settlements pre-2010. I can only assume as I have not seen any concrete evidence otherwise. If anyone can see any HMRC or gov.uk comments on this matter I would appreciate you posting the link;

https://www.gov.uk/government/public...-charge-review

The review was specific to the loan charge and did not consider tax avoidance that is outside of its scope. That is, the review only considered disguised remuneration scheme use between and including 9 December 2010 and 5 April 2019 that is in scope of the loan charge legislation (Schedules 11 and 12 to the Finance (No.2) Act 2017). It only considered both outstanding loan charge liabilities and the related outstanding liabilities arising from the underlying income received via this use of disguised remuneration schemes.

[luxCon]

The way I'm reading the governments response is all pre-2010 loans will be treated the same for settlement. Sec 2.5 "It will apply both to the outstanding liabilities arising as a result of the loan charge and the related underlying tax liabilities that exist separate to the loan charge. This reflects the Review’s conclusion that the loan charge was an extraordinary piece of Government policy, which requires an exceptional response."

I believe Sec 2.6 is saying you don't get to settle post 2010 under the new terms and not settle pre 2010 loans.

Hopefully I'm correct in this and can finally put this to bed.

The way I read this paragraph 2.6 is that in order to benefit from the new Loan Charge terms, you must first settle your pre 2010, and then it clearly says the pre-2010 loans are not benefiting from the new terms

2.6 Where individuals have both loan charge liabilities and disguised remuneration liabilities that are not subject to the loan charge, they will need to settle all of their disguised remuneration avoidance with HMRC in order to access the settlement opportunity. Only the liabilities that are within scope of the loan charge will benefit from the concessions available under the settlement opportunity.

[nucastle]

I settled at significant cost over a four year period, which ended up as more than what it would have been if they hadn't calculated the "liability" on top of years where the avoidance didn't take place. Plus interest.

Some of the examples in the review see liabilities being less than half they would have normally been. So there was an incentive to not settle and hold out in retrospect.

So, where's my refund?

[mightyspur]

I'm waiting for HMRC to give me a settlement figure for my time with Procorre where I was on their Overdrawn capital account scheme for circa 9 months receiving around 14k income via that, and then through the acquisition of my company, which continued until 2021 when I stopped contracting.

HMRC in their initial demand said the total amount of the valuation for my company was subject to the loan charge (despite never receiving that as income at that point other than the 14k via ODC), as most people had their company valued at the total amount they had received via the ODC at least that is what I think they implied..

They have issued Reg 80 demands for all years I was with Procorre, i.e. 2018-19, 2019-20 and 2020-21 so it inferred I was effectively being taxed twice - 2018-19 for valuation amount, which they classified as income and then 2019-21 when I actually did receive the funds from Procorre via their share 'earn-out' payments.

I'm rather confused whether this falls under the "loan charge" because my company was acquired BEFORE 2019, but the funds/earn out payments were actually received post 2019. If the income received post 2019 is outside, then I assume I would still be subject to interest and penalties and not be entitled to the friendly TTP arrangements of 5-10+ years, so it would make a significant difference

I've contacted my tax advisor, but I'm still thoroughly confused and unsure what my final settlement will be.