Reply to: September loan charge deadline - thoughts

[webberg]

*

I understand the point that is being made and I assume that WTT has got counsel opinion to support what they are saying and that s13 has been taken into account and is not applicable.

Indeed we have.

However I should not be here.

[Iliketax]

So, in other words, using your example if you have received employment income you have to pay the tax.

Exactly.

So is there is a loan within the scope of the tax charge? You've not explained your facts or your accountant's feeling so we can't tell. But spending your time posting here suggests you have concerns.

If you have such a loan then there is employment income. If there's not, you don't. If your employer operates PAYE, there is still exactly the same amount of employment income. It's just that your actual tax liability is reduced by the PAYE withheld.

And I've tweaked the following bit as it's too late get rid of it.

I would have to repay them and suffer a tax charge as a BiK.

[Concernedlc]

Putting it into the context of council tax, s13 basically says "the person who has to pay the council tax is the person who lives there". It doesn't tell you anything about whether there is any council tax on your house, car or hotel room, how much the council tax is or whether you qualify for a discount.



No. It's the other way around. And s13 has nothing to do with that.

*If I live in the house then I owe the council tax
So, in other words, using your example if you have received employment income you have to pay the tax.

s13 is relevant it is the next logical step after establishing a liability, as it moves said liability from the employer to me.

To use another analogy, if we had an agreement by which I had to buy you a cup of coffee if I posted on here tomorrow and the conditions of me posting were;

1. That I was at work
2. That by virtue of me being at work I was in a suit

And I posted on here. You would be DMing me to find out where I was working so that you could get your cup of coffee.

Granted I might not be in a suit or at work and I might just be posting on here for another reason, but I'm sure you would argue that you were owed your cup of coffee. Surely in this instance, it is best for me to just not post and wait for you to evidence that I was in the office wearing a suit.

I understand that I am probably treading on a lot of toes by saying this and by the reaction I am getting it would appear to be the case.

Again it could be that it is because I am trying to apply logic. But, if a specific set of conditions need to be met before an action is taken - then that action is taken is it not easy to argue cause and effect (I imagine that there will be pushback on this point and I appreciate that cause and effect might not be linked). However, when disclosure is on the condition that there is a Part 7A liability and I disclose, then it is not hard for HMRC to argue employment income - yes, it can be argued that the employer should pay - but s13 states that the tax on the employment income is my responsibility. Even if you can successfully argue that the employer should pay the tax, I have still notified HMRC that in 2018/19 I received employment income which I have not paid tax on. The best bet is that the employer would pay the tax and then I would have to repay them or suffer a tax charge as a BiK.

I understand the point that is being made and I assume that WTT has got counsel opinion to support what they are saying and that s13 has been taken into account and is not applicable.

However, when you put an argument forward based on your counsel tax example you are in essence saying that whoever received the income has to pay the tax.

Again, I was merely trying to be helpful for the thousands of individuals who might not have representation.

If there is anyone who has a genuine comment regarding this and doesn't just want to shout me down perhaps they could DM me.

Otherwise I look forward to the next round.

[Iliketax]

Given what I was told about s13 I felt it was a good idea to make people aware, I am sure that there are a lot of people that have paid money and received advise to disclose, but may not be aware of the s13 point.

Putting it into the context of council tax, s13 basically says "the person who has to pay the council tax is the person who lives there". It doesn't tell you anything about whether there is any council tax on your house, car or hotel room, how much the council tax is or whether you qualify for a discount.

Therefore if we disclose surely we are caught

No. It's the other way around. And s13 has nothing to do with that.

[webberg]

see #12 - I thought this was going to be your last post.

I am following their advice, as stated from the start I was wondering if other people had been given similar advice - given that all the majority of the advice including yours is to disclose. Given what I was told about s13 I felt it was a good idea to make people aware, I am sure that there are a lot of people that have paid money and received advise to disclose, but may not be aware of the s13 point.

As I have stated before I am aware from reading the forum that you have a lot of people paying for your advice and I am sure that you have taken into account all the relevant points. However, there are probably just as many who have not paid for any advise and are unaware of this point.

Fair enough on all points.

[huntingground]

Just spoken to Danny Saker at 03000 534 226.
Don’t need to declare by 30th September as I am in settlement negotiations.
HMRC have to get back to me with final CLSO2 figures. All onus is on HMRC, I have done everything I can.
I can pause whilst the review is underway.
All of this is noted on my case files.

I contacted my tax advisers : If they have decided you don’t need to disclose and you are comfortable following that guidance then there is no need to disclose. We would always say to disclose regardless because we are uncomfortable relying on lack of written evidence. But that would be belt and braces rather than a requirement based on the information received from HMRC and noted on your file.

[Concernedlc]

see #12 - I thought this was going to be your last post.

I am following their advice, as stated from the start I was wondering if other people had been given similar advice - given that all the majority of the advice including yours is to disclose. Given what I was told about s13 I felt it was a good idea to make people aware, I am sure that there are a lot of people that have paid money and received advise to disclose, but may not be aware of the s13 point.

As I have stated before I am aware from reading the forum that you have a lot of people paying for your advice and I am sure that you have taken into account all the relevant points. However, there are probably just as many who have not paid for any advise and are unaware of this point.

[webberg]

Just as a summary, I have spoken to my accountant again.

They have commented that given the specific nature of the disclosure, especially relevant under Part 7A that acceptance of it being employment income allows HMRC to use s13

"13(1) The person liable for any tax on employment income under this Part is the taxable person mentioned in subsection (2) or (3).

13(2) If the tax is on general earnings, “the taxable person” is the person to whose employment the earnings relate.

13(3) If the tax is on specific employment income, “the taxable person” is the person in relation to whom the income is, by virtue of Part 6, 7 or 7A or any other enactment, to count as employment income."

Therefore if we disclose surely we are caught, I'd rather risk a 6k penalty than a penalty for submitting an incorrect return.

See post #11 above.

Whilst I'm sure that you may find other accountants who take a different view, if you are happy that they are not connected with the scheme you used, have thought about the problem, have the expertise to deal with it, then why pay them money only to ignore their advice?

[webberg]

Hi

simple question. Probably been asked and answered already.

For 2009-10 and 10-11 I had an EBT. I was issued an APN back in 2015 which I agreed a TTP and settlement. I paid that off back in 2017.

My question is do I still declare the EBT loan amounts ?

thanks and apologies if this has been answered already

Yes you do.

APN is NOT settlement.

Loan charge is NOT settlement.

Settlement is you and HMRC agreeing a final liability and who is liable to pay it.

[lowpaidworker]

Hi

simple question. Probably been asked and answered already.

For 2009-10 and 10-11 I had an EBT. I was issued an APN back in 2015 which I agreed a TTP and settlement. I paid that off back in 2017.

My question is do I still declare the EBT loan amounts ?

thanks and apologies if this has been answered already

[Concernedlc]

Just as a summary, I have spoken to my accountant again.

They have commented that given the specific nature of the disclosure, especially relevant under Part 7A that acceptance of it being employment income allows HMRC to use s13

"13(1) The person liable for any tax on employment income under this Part is the taxable person mentioned in subsection (2) or (3).

13(2) If the tax is on general earnings, “the taxable person” is the person to whose employment the earnings relate.

13(3) If the tax is on specific employment income, “the taxable person” is the person in relation to whom the income is, by virtue of Part 6, 7 or 7A or any other enactment, to count as employment income."

Therefore if we disclose surely we are caught, I'd rather risk a 6k penalty than a penalty for submitting an incorrect return.

[overseas]

I'm also questioning the need to respond by Sept 30th. I have one closed year 2003 (I didn't use the scheme for long).
I got the loan charge letter even though I'm not British and I haven't lodged a uk tax return since 2003. What I find it hard to believe is that they would charge penalties for people like me. In my case it's tempting to ignore Sept 30th and wait until the LC review in November.
I know disclosure does not necessarily always mean liability, however I am concerned that any response I make will be used against me in future. Even if the LC is scrapped for old closed years, what is to stop hmrc using the info they gather again in future. I'm only small fry but that hasn't stopped them so far has it?

[CanPayButWouldRatherNot]

review or no review ... this deadline isnt going away

[DealorNoDeal]

It is clear that I am going to have to argue this with HMRC...

Make sure you know what you're getting yourself in to

HMRC will fiercely resist anyone, who used a loan scheme, who argues that the LC doesn't apply to them.

If necessary, they'll take it all the way (FTT -> UTT -> Court of Appeal -> Supreme Court).

[Concernedlc]

@Webberg

Thank you for your patience, I was not expecting such a thorough response.

@Iliketax

My accountant is independent, and I have had several conversations with them about this. It is only because they are taking a view which does not fit the "norm" that I was wondering if other contractors have had similar conversations.

I would say that my understanding is consistent with that of my advisors, however, as mentioned above it always feels strange when you are seemingly swimming against the tide.

Condition 4 - this changes the date from the 5th April 2019 to the 16 March 2016 and makes the relevant step occur on the 16 March 2016 rather than the 5 April 2019. I would imagine that this would apply if you have repaid your loan after 16 March 2016 but before the 5 April 2019 it is not that there is no tax charge, but rather no relevant benefit at 5 April 2019.

I don't really intend on keeping this alive much longer as it was merely to see if others have had similar conversations with their advisors.