Reply to: Loan Charge Action Group

[cojak]

That article was posted in 2017, things have moved on since then.

[Lurker99]

Its actually a artical on this very website

https://www.contractoruk.com/ebt/new...uneration.html

Ah, ok apologies.

[uppoocreek]

Link to info

Its actually a artical on this very website

https://www.contractoruk.com/ebt/new...uneration.html

[Lurker99]

What can you do if affected?

If you have an outstanding loan that was made after December 9th 2010, it should have been taxed as income when it was made, under the DR rules. Check that the tax has in fact been paid, and if not, we say arrange to pay as soon as possible. The earlier you pay, the less interest you’ll be charged.

Outstanding loans from before December 9th 2010 will become taxable on April 5th 2019, so you’ll have until then to resolve the issue, such as by repaying the loan or settling with HMRC.

Who's 'we' that's providing this advice... posted to several threads I see.

[uppoocreek]

Can someone please confirm?

What can you do if affected?

If you have an outstanding loan that was made after December 9th 2010, it should have been taxed as income when it was made, under the DR rules. Check that the tax has in fact been paid, and if not, we say arrange to pay as soon as possible. The earlier you pay, the less interest you’ll be charged.

Outstanding loans from before December 9th 2010 will become taxable on April 5th 2019, so you’ll have until then to resolve the issue, such as by repaying the loan or settling with HMRC.

[TheLodge]

Petition against Loan Charge

Hi - I’d like to ask you to take a couple of minutes to sign the petition below. This relates to the 2019 Loan Charge seeks to historically tax a significant proportion of UK freelance workers for employment arrangements they used over the last twenty years. This is estimated to affect around 100,000 workers across all sectors

https://petition.parliament.uk/petitions/218582

[DeadDOTAS]

With the letter now been leaked to press and apparently no response yet from JonBonThompo and MellyBoy Stride, this ain't going to go away for them am afraid:

https://www.contractoruk.com/news/00..._thompson.html

Guess they now know what it feels like when you're at the receiving end from some shXtty letter!

[DeadDOTAS]

LCAG just peed all over JonBonThompo's and MelBoy's summer weekend barbecue:

Contractor group demand suicide helpline - Contractor Weekly

The actual letter this refers to has now been leaked to the press and is available here:
https://www.hmrcloancharge.info/blog...o-jon-thompson

Joking aside, we mustn't forget the reason for this is serious and in some cases literally existential:
LCAG has, over the past few weeks, triaged at least three people with acute suicide risk and is aware of another suicide attempt that led to hospitalisation.

That are doing great work in helping people, even if late at night / weekend, but they are not staffed/equipped to dealing with many similar cases.

With the flood gates opening following the 1st wave of HMRC Loan Charge warning letters, mainly to Horizon users this week, unfortunately there maybe many more such cases.

HMRC/ Jon Thompson / Mel Stride are causing this mess and human tragedy and it is purely THEIR responsibility to preventing further suicides and/or mopping up the mess they are leaving behind.

Please spread the word and tweet the links above. Expect more news coverage on the back of this also....
When you tweet, please use
#HMRCHumanCost and
#LoanChargeWillCostLives

Stay safe ppl and remember there is help available!

[DeadDOTAS]

Thanks for the update.

Please get back to your MP and say "sorry, it's not ok":
If they cannot sign the EDM - which some will not for various reasons -, ask them to ask specific written questions on your behalf.

We've got a catalogue of >2 pages to pick from. DM me please and I will send them to you.
All these will have to be published on the parliament website and become public record.
We mustn't let them get away with it!

Many thanks

[Scotslaw]

MP's response

Very well written, except you potentially shoot your self in the foot by stating "I decided at the outset to work through a limited liability company to be tax efficient.". That might be the case but it won't gain any sympathy from HMG...

Still, it will be interesting to read the MP's reply.

Got a response today:

Dear NAME,

Thank you for your email.

I am currently making some enquiries with HM Treasury regarding the concerns you have raised in your email below.

As soon as a response has been received I will be back in touch.

In the meantime, if there are any further issues you wish to bring to my attention please don't hesistate to get back in contact.

Kind regards
NAME MP

Then asked him to sign the EDM and received this...

Thanks for responding.

I won't sign the EDM at the momen as they really don't serve any purpose. I would rather get a formal response from the Government and the Minister than signing the EDM.

I hope that's ok.

[Iliketax]

I'm not arguing with your personal views. But I will stick my oar in on two bits:

Tax Avoidance isn't (and never has been) illegal.

While I agree that was the case in the past, I'm not sure that is entirely right now.

No man in this country is under the smallest obligation, moral or other, so as to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.

That approach has been rejected by Parliament by bringing in the General Anti-Abuse Rule (GAAR) 2013 legislation. ... Similarly, the widespread assumption that "tax avoidance is legal" no longer applies and HMRC will take action against what it refers to as "abusive tax avoidance schemes".

https://www.sra.org.uk/solicitors/co...ng-notice.page

The Loan charge is retrospective which whilst not illegal is something we've always been promised wouldn't occur

I don't know where that was promised. But if there was such a promise, it was taken away in 2004 (which is obviously five years after 1999).

However, experience has taught us that we are not always able to anticipate the ingenuity and inventiveness of the avoidance industry. Nor should we have to. Our objective is clear and the time has come to close this activity down permanently. I am therefore giving notice of our intention to deal with any arrangements that emerge in future designed to frustrate our intention that employers and employees should pay the proper amount of tax and NICs on the rewards of employment. Where we become aware of arrangements which attempt to frustrate this intention we will introduce legislation to close them down, where necessary from today.

[phil@pmtc]

My personal opinion on all this is as follows:

Tax Avoidance isn't (and never has been) illegal.
It is correct that HMRC clamp down on Tax Avoidance as the system of Taxation is a necessary evil for the economy of a stable Country.
HMRC must do this through application of the laws of the land.
Retrospective Taxation is just plain wrong and goes against the basic principle that a person has a right to certainty over their tax affairs.
The above 'right' has always been provided by the strict requirement placed upon HMRC of enquiry windows.
Enquiry Windows are part of legislation which must, by law, always be followed.
The Loan charge completely overrides this certainty and destroys the system as we know it.

Therefore, whether someone went into these schemes blind or with the full intention to save a few quid is, to me, completely irrelevant. It just makes it worse on a human level if it was mis-selling but even if it wasn't, that doesn't change the above.

The Loan charge is retrospective which whilst not illegal is something we've always been promised wouldn't occur and more importantly, it ignores the enquiry windows which does break the law. The argument is of course that its a new tax on a new source but that clearly has been explained numerous times to be wrong on many levels.

Even if someone disagrees with all of that, then its still wrong (in my opinion) for any government/department/authority to introduce something which clearly destroys lives to the extent that this does. Especially when they then refuse to accept all evidence that's in front of their face and keep repeating lines which have no place in reality.

Unfortunately, until someone is personally (either themselves or a loved one) affected, then they wont bother to learn the above and in the eyes of the public you're all evil, rich tax avoiders who probably have millions hidden away in the Canary Islands.

[Scotslaw]

Fair enough, but I would prefer to argue (in fact I have argued) that MyCo is there for the liability protection and to enable me to manage my gross income across periods where I am earning and not earning, as well as being a vehicle for pensions provision in later life. We're already seen as serial tax avoiders, so let's try to keep tax efficiency, right as it is, out of the frame.

There's a strong argument in that the 85% take home through an EBT is tax avoidance. The ~ 70% take home through a LLC not counting an average 25% down time and zero employment benefits... HMRC should be hard pressed to justify the 'tax avoider' label.

Leaving it out of the frame doesn't mean it's not in the mind of the recipient of the message. Bringing it out and stepping out in front of it on the other hand gives them one less bullet to aim at me should they counter argue.

I take a risk and the tax benefits are the financial recompense of the risk I take.
I don't expect sympathy for the risks I choose to take and in turn, don't expect to apologise for the rewards I expect in return.

You make a fair point though... Joe Public in general, and politicians in particular are sensitive to tax avoidance and evasion, so this point does need to be addressed with commensurate sensitivity.

[headspin]

Very well written, except you potentially shoot your self in the foot by stating "I decided at the outset to work through a limited liability company to be tax efficient.". That might be the case but it won't gain any sympathy from HMG...

and that's the common misconception about contractors that Joe Bloggs has - we coin it. But the truth is when everything is taken into account contractors are not really much better off. The people that do gain the most are the employers. We are just the low hanging fruit that lazy HMRC are picking off, instead of going after the scheme creators and making employers stump up some of what they are saving.

[malvolio]

Thanks...
I went on to explain why tax efficiency is important to me (and contractors in general) in the following sentence:

This is an important counterbalance to the risk I take being self-employed and for not being eligible for any employment rights or benefits.

I would have lost credibility otherwise, whilst talking about IR35.

Fair enough, but I would prefer to argue (in fact I have argued) that MyCo is there for the liability protection and to enable me to manage my gross income across periods where I am earning and not earning, as well as being a vehicle for pensions provision in later life. We're already seen as serial tax avoiders, so let's try to keep tax efficiency, right as it is, out of the frame.