Loan Charge : my story

[passerby]

I’m probably going to get some quite negative feedback for this but I want to share my Loan charge story and I’d like to hear other people’s

My story starts as a young gullible professional who fell for the cold call sales patter of a tax consultancy

I was promised IR35 immunity through a HMRC approved scheme.

The benefit in terms of take home was negligible against running a LTD company but back in 2007 IR35 was looming large.

After 13 months of using the scheme, cracks appeared .. the Loans changed hands suspiciously and I started to dig. What I found scared me senseless . I left the scheme straight away even sacrificing an invoice in my haste !

I quickly contacted a tax specialist (gilberts) and started to raise awareness to warn others. I contacted HMRC and fully disclosed everything as I was close to a nervous breakdown.

They raised an enquiry and then closed it in a later year without taking ANY action. I was told that no tax was due !

So after suffering with extreme stress and anxiety I could get on with my life. Fast forward 10 years and I have a family and a wife, two beautiful young children and I’m about to lose it all for something that happened before they all graced my life.

I am now subject to the loan charge. With my family now to suffer for actions of my past . The troubles I thought were behind me have now jeopardise everything I love.

I barley sleep, I may lose my family, I will lose their family home and I can’t live with the guilt.

HMRC’s lack of action has led to 10 years of interest and lifetime of hurt. Im paying 60% tax (including interest) on gaining a 5% increase in take home compared to a limited company. It didn’t fund a lavish lifestyle it made paying the bills a little easier.

The retrospective nature of the loan charge makes a mockery of the legal system.
I’m Just a number on a balance sheet, a department target linked to someone’s bonus.

When I am made bankrupt and I have to give up my job in the finance sector, HMRC will lose more tax in three years from my earnings than they will recoup from me by implementing the loan charge and I’ll probably end up claiming it all back in benefits within 5 years.

Where is the logic ... where is the justice ... where is humanity ?

Sorry for your situation, you are not alone.

Can I ask why you think this will bankrupt you? you only used the scheme for 13 months 10 years ago, no open enquiry so no interest, so the liability if any should be manageable.

[Joolsey86]

I'm hoping HMRC lose the right to go back the full 20 years. Doesn't effect me, mine but effects so many others.

Doesn't seem right they're concerned with accounts 20 years ago, but not those scheme promoters still operating today. Which is how I got suckered in. Amomgst other things, "How can this be illegal if it's still allowed to operate"

Time limit (years)

4

• Incomplete disclosure
• Not due to careless or deliberate conduct

6

• A loss of tax
• Due to careless conduct

20

• A loss of tax
• Due to a deliberate action, or
• A failure to notify liability, or
• Attributable to a notifiable tax avoidance scheme (DOTAS), a hallmarked scheme or listed scheme, and
• The user failed to notify HMRC

This is HMRC official discovery blurb.

Which means that any schemes which pre-existed prior to DOTAs (i.e. 1999-2004) (DOTAs was only notifiable on schemes created post its implementation date in 2004) - the government should have no legal recourse to go back and do a tax grab for any closed years.

[Delendog]

I'm hoping HMRC lose the right to go back the full 20 years. Doesn't effect me, mine but effects so many others.

Doesn't seem right they're concerned with accounts 20 years ago, but not those scheme promoters still operating today. Which is how I got suckered in. Amomgst other things, "How can this be illegal if it's still allowed to operate"

It suited the "elite" for this whole area of "wealth management" to be largely unregulated. What they (Gov/HMRC) don't like is that some of these schemes became mainstream and the "ordinary" person started to use them on mass which then starts to focus attention on themselves. This is why they are clamping down in such a hard way. How dare you do what we have been doing for years!

[here4beer]

What ruling? The April 2019 loan charge is actually legislation.

I'm hoping HMRC lose the right to go back the full 20 years. Doesn't effect me, mine but effects so many others.

Doesn't seem right they're concerned with accounts 20 years ago, but not those scheme promoters still operating today. Which is how I got suckered in. Amomgst other things, "How can this be illegal if it's still allowed to operate"

[Iliketax]

I think (hope) yours is the kind of case that'll be excluded, once the ruling is looked at again in March.

What ruling? The April 2019 loan charge is actually legislation.

The only thing that will definitely happen in March is a comparison of time limits. There is no need for the government to do any more. They might well include some narrative about the April 2019 loan charge. From a personal perspective, I think that the chances of the government deciding to change anything is tiny. Other people will have different views on the politics of it all though.

Review of changes made by sections 79 and 80
(1) The Chancellor of the Exchequer must review the effects of the changes made by sections 79 and 80 to TMA 1970, and lay a report on that review before the House of Commons not later than 30 March 2019.

(2) The review under this section must include a comparison of the time limit on proceedings for the recovery of lost tax that involves an offshore matter with other time limits on proceedings for the recovery of lost tax, including, but not limited to, those provided for by Schedules 11 and 12 to the Finance (No. 2) Act 2017.

(3) The review under this section must also consider the extent to which provisions equivalent to section 36A(7)(b) of TMA 1970 (relating to reasonable expectations) apply to the application of other time limits.

[Iliketax]

They raised an enquiry and then closed it in a later year without taking ANY action. I was told that no tax was due !

...

Im paying 60% tax (including interest)

Why do you think that you are paying interest? There is no interest on the April 2019 loan charge (or on a settlement if the year in which the loan was made is "closed").

When I am made bankrupt

Who has told you that you will be made bankrupt?

Have a look at this: Loan charge settlement – separating fact from fiction | Low Incomes Tax Reform Group

[here4beer]

I think (hope) yours is the kind of case that'll be excluded, once the ruling is looked at again in March.

Unfortunately mine was quite recent, so I'm buggered either way.

Ps. Amazes me HMRC don't have the power (or desire...) to close down the scheme promoter. Intead they dig up your 2007 accounts? Horrendous human beings.

[dammit chloe]

Sorry for the perhaps uninformed question as I have never gone down the Loans route and can only sympathise with this retrospective nonsense from afar.

If you have already been subject to an enquiry, and IF you still have the paperwork to demonstrate, is that not case closed?

That's the loan charge. It ignores the fact that years are closed. Who cares about the TMA and taxpayer protections eh. Not this Conservative Government that's for sure.

[simes]

They raised an enquiry and then closed it in a later year without taking ANY action. I was told that no tax was due !

Fast forward 10 years and I have a family and a wife, two beautiful young children and I’m about to lose it all for something that happened before they all graced my life.

I am now subject to the loan charge.

Sorry for the perhaps uninformed question as I have never gone down the Loans route and can only sympathise with this retrospective nonsense from afar.

If you have already been subject to an enquiry, and IF you still have the paperwork to demonstrate, is that not case closed?

[NotAllThere]

Just fyi - this is "HMRC Scheme Enquiries". That means anything beyond (below?) helpfulness is heavily discouraged by the mods.

[u9k82]

I’m probably going to get some quite negative feedback for this but I want to share my Loan charge story and I’d like to hear other people’s

My story starts as a young gullible professional who fell for the cold call sales patter of a tax consultancy

I was promised IR35 immunity through a HMRC approved scheme.

The benefit in terms of take home was negligible against running a LTD company but back in 2007 IR35 was looming large.

After 13 months of using the scheme, cracks appeared .. the Loans changed hands suspiciously and I started to dig. What I found scared me senseless . I left the scheme straight away even sacrificing an invoice in my haste !

I quickly contacted a tax specialist (gilberts) and started to raise awareness to warn others. I contacted HMRC and fully disclosed everything as I was close to a nervous breakdown.

They raised an enquiry and then closed it in a later year without taking ANY action. I was told that no tax was due !

So after suffering with extreme stress and anxiety I could get on with my life. Fast forward 10 years and I have a family and a wife, two beautiful young children and I’m about to lose it all for something that happened before they all graced my life.

I am now subject to the loan charge. With my family now to suffer for actions of my past . The troubles I thought were behind me have now jeopardise everything I love.

I barley sleep, I may lose my family, I will lose their family home and I can’t live with the guilt.

HMRC’s lack of action has led to 10 years of interest and lifetime of hurt. Im paying 60% tax (including interest) on gaining a 5% increase in take home compared to a limited company. It didn’t fund a lavish lifestyle it made paying the bills a little easier.

The retrospective nature of the loan charge makes a mockery of the legal system.
I’m Just a number on a balance sheet, a department target linked to someone’s bonus.

When I am made bankrupt and I have to give up my job in the finance sector, HMRC will lose more tax in three years from my earnings than they will recoup from me by implementing the loan charge and I’ll probably end up claiming it all back in benefits within 5 years.

Where is the logic ... where is the justice ... where is humanity ?