Email from Optimus
Dear xxxxxxxxxxxxxx
The The Assignment Solutions Limited Employee Trust Employees Benefit Trust (the “Trust”)
Background
You are a beneficiary of the Trust by virtue of your employment with Assignment Solutions Limited and during your employment with Assignment Solutions Limited you received various loans form the Trust. I am writing to you now because HMRC have enacted legislation which will give rise to a tax charge in respect of those loans should you take no action and any loans remain outstanding.
The Loan Charge
The legislation referred to above will, in simple terms, give rise to a tax charge where an individual has received a loan from a third party which can be linked to what HMRC describe as disguised remuneration tax avoidance schemes. The loans made to you by the Trust fall into this category.
Where such a loan remains outstanding at the end of 5 April 2019 the value of the loan will be subject to PAYE and NICs. As we understand it the charge is initially taxable on the employer, however, as you were employed by a non-UK company HMRC would not be able to enforce the charge against the Employer. HMRC have made specific provision for this in the legislation and that provision allows them to transfer the PAYE and NIC liability to you. As mentioned above taking no action will result in a tax charge on you. In addition the charge will be a standalone charge and will not be linked to the underlying planning. Paying the charge will not settle any HMRC enquiry or finalise matters in relation to the underlying planning.
The loan charge will not apply either where a settlement has been reached with HMRC or where the loan has been repaid in full with money prior to the end of 5 April 2019. If you have settled and confirmed such with the trustee please do ignore this email.
Reporting Obligations
You, the borrower, the trustee and the employer all have separate reporting obligations to HMRC in respect of loans outstanding at 16 March 2019, irrespective of whether they have been repaid by 5 April 2019. If you fail to report the loan charge information in the provided timescale or you provide inaccurate information HMRC have introduced a penalty regime. The trustee fully intends to meet its reporting obligations to HMRC.
Next Steps
It may be that you are fully aware of the potential charge, it may be that this is the first you have heard of it or, more likely, you are somewhere in between. The purpose of this email is firstly to make sure that you are aware and secondly to ask what your intentions in relation to the loan charge are.
If you need advice and guidance as to what steps to take we, as trustees, are not qualified to give that advice but we do work with advisors and are able to make appropriate introductions. Alternatively if you have an adviser in place and have decided your course of action please do let me know.
I look forward to hearing from you.
Regards
Brent Thomas
Director
Dear xxxxxxxxxxxxxx
The The Assignment Solutions Limited Employee Trust Employees Benefit Trust (the “Trust”)
Background
You are a beneficiary of the Trust by virtue of your employment with Assignment Solutions Limited and during your employment with Assignment Solutions Limited you received various loans form the Trust. I am writing to you now because HMRC have enacted legislation which will give rise to a tax charge in respect of those loans should you take no action and any loans remain outstanding.
The Loan Charge
The legislation referred to above will, in simple terms, give rise to a tax charge where an individual has received a loan from a third party which can be linked to what HMRC describe as disguised remuneration tax avoidance schemes. The loans made to you by the Trust fall into this category.
Where such a loan remains outstanding at the end of 5 April 2019 the value of the loan will be subject to PAYE and NICs. As we understand it the charge is initially taxable on the employer, however, as you were employed by a non-UK company HMRC would not be able to enforce the charge against the Employer. HMRC have made specific provision for this in the legislation and that provision allows them to transfer the PAYE and NIC liability to you. As mentioned above taking no action will result in a tax charge on you. In addition the charge will be a standalone charge and will not be linked to the underlying planning. Paying the charge will not settle any HMRC enquiry or finalise matters in relation to the underlying planning.
The loan charge will not apply either where a settlement has been reached with HMRC or where the loan has been repaid in full with money prior to the end of 5 April 2019. If you have settled and confirmed such with the trustee please do ignore this email.
Reporting Obligations
You, the borrower, the trustee and the employer all have separate reporting obligations to HMRC in respect of loans outstanding at 16 March 2019, irrespective of whether they have been repaid by 5 April 2019. If you fail to report the loan charge information in the provided timescale or you provide inaccurate information HMRC have introduced a penalty regime. The trustee fully intends to meet its reporting obligations to HMRC.
Next Steps
It may be that you are fully aware of the potential charge, it may be that this is the first you have heard of it or, more likely, you are somewhere in between. The purpose of this email is firstly to make sure that you are aware and secondly to ask what your intentions in relation to the loan charge are.
If you need advice and guidance as to what steps to take we, as trustees, are not qualified to give that advice but we do work with advisors and are able to make appropriate introductions. Alternatively if you have an adviser in place and have decided your course of action please do let me know.
I look forward to hearing from you.
Regards
Brent Thomas
Director
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