How does the Loan Charge actually get applied? - Contractor UK Bulletin Board

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RickG started a topic How does the Loan Charge actually get applied?

3 August 2018, 10:21
How does the Loan Charge actually get applied?

Does anyone know yet (or can anyone hypothesise if it is not clear yet) how the Loan Charge will be applied by HMRC?

I believe the individual fills in a SA tax return in 2019 (for year ending April 2019). On there will be a question regarding outstanding loans to which the LC applies. If the individual is unsure if the LC applies, they should declare the loans regardless.

Does the tax due automatically apply at this stage? Or does HMRC need to make a determination?

Where the LC applies to the employer, what steps do HMRC take to try to recover the tax from them first? The gov.uk information page here:

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

Talks vaguely about transfer of liability, but does not go into any great detail on how this is achieved and what steps HMRC need to take to make it happen.

Unless I'm very much mistaken, it's dawning on me that this LC19 won't just automatically be a bill presented to you on the 5th Apr 2019. HMRC will surely need to go through the proper channels to prove that it does indeed apply to you - or at least give the option of challenging it. This is what I am trying to understand.
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