Reply to: HMRC say the loan is taxable, therefore it cannot be a loan. Right? WRONG

[Saleos]

Despite impressions created to the contrary there is little point in ringing WTT for an update on the case he alluded to, as it isn't their case so they won't know what is happening; only what has happened. You can find out what has already occurred in the past for free as it is in the public domain.

Clairol

You're probably best ringing WTT directly. Graham hasn't been so active on here recently.

[DavidD]

HMRC says the loan is taxable, therefore it cannot be a loan. Right? Right (FTFY)

If a case ever makes it to court - It will be proved that it can't be both... It simply cant be when you follow the money (as will surely happen) and I can never foresee a scenario where someone earns some money;

18% (in the K2 scenario) is taken by promoters
40-55% is taken by the government as they have determined it is taxable disguised remuneration;
100% is taken by some other crowd..

No court will ever sanction that, no-one will ever say that is acceptable, no-one will ever say that is reasonable, no one will ever say that can pass any sort of reality test.....

People can talk about contract law, trust law and tax law till the cows come home.... If the time ever comes it will be proved that the same £1 cannot be taxable as (essentially) a salary and payable in full as a loan. Never going happen....

For the record as noted elsewhere I will never pay even a single penny to these crowds under any circumstance.

PS - If any of the people claiming to own these 'loans' peruse here - the example above is why you bought a bad debt - it is simple unaffordable and never can never scale up to be economic for you - so lick your wounds and find some other chumps to scam.

[piebaps]

Clairol

You're probably best ringing WTT directly. Graham hasn't been so active on here recently.

[Clairol]

Any news on this please?

In due course yes.

I understand that there is an oral hearing into the latest action due to take place next week (virtually of course).

It's available to join for the public and we will of course.

Hi Graham, is there any up date on this please?

[Confusedetc]

Then HMRC has told you a load of nonsense.

They have told you how to declare and pay the loan charge. This is a tax on accumulated loans as at 5th April 2019.

The tax due on the loans is actually calculated by adding to your other income the loans drawn in each tax year, assuming that you have open enquiries for those years. If you do not have enquiries then HMRC will tell you that the loan charge applies - but it may not.

I suggest that if you have all of HMRC's advice in writing, then you share it with an adviser and have them obtain a sign off from HMRC that everything is settled.

I fear it is not settled. I fear that some idiot in HMRC has fooled you and that is frankly unacceptable.

happy to help if you want to contact me. (Free of charge)

I see what you mean now, on their website it says:
Open enquiries
Paying the loan charge does not resolve the underlying tax dispute with HMRC for the years in which loans were made. Tax years that are subject to an open enquiry or assessment will still need to be resolved, either by way of settlement with HMRC or through litigation.
>>

Made contact for help thanks

[webberg]

Could you share details of which tribunal? Or maybe provide a summary once it has been decided on?

In due course yes.

I understand that there is an oral hearing into the latest action due to take place next week (virtually of course).

It's available to join for the public and we will of course.

[DealorNoDeal]

Nope, but why should I.
I have done what they have asked of me both by letter and phone, and no where does it say in their letter regarding the loan charge, that after doing everything they have asked for, that actually that's not everything, there is more, but they just haven't told me what yet.

Am I supposed to go on the rest of my life being worrying about being punished and incurring further fines and being asked for more money, for being stupid and getting scammed, when I have gone to every effort to pay the tax that was not paid on that money I received.

Don't get me wrong, I'm not having a pop at you or anything.

It's just that, strictly speaking, paying the loan charge does not finalise matters. Any enquiries HMRC opened into your scheme tax returns will still remain open. Likewise, any assessments (discoveries) they raised into your tax returns will still be open. Only settling would have closed all this off (which perversely they wouldn't let you do).

FWIW, IMO, I doubt HMRC will bother you again. (But webberg doesn't share this view. He believes HMRC will continue to pursue people, who've paid the loan charge, until everything is completely finalised.)

[RickG]

Very good question and one that is being tested in tribunal right now.

Playing Devil's Advocate here, why did you, the recipient of the money, not ask HMRC - at the time - why no tax was being withheld from the payment?

Could you share details of which tribunal? Or maybe provide a summary once it has been decided on?

[webberg]

HMRC informed me I cannot settle because I missed that opportunity, so I have followed everything they have told me to do both by letter and many phone conversations with the loan charge dept, to combine the outstanding loans, split by 3, add that amount to each tax year for last year and next 2 tax years, and pay the tax owed which is calculated which I should have paid had it been classified correctly originally (and not hidden).

What more can they expect me to pay and do ? they have told me doing this will clear this situation up and I can then move on from it. I should not owe them anything else and have to further worry about more unknown charges being levied on me which you seem to indicate.

Then HMRC has told you a load of nonsense.

They have told you how to declare and pay the loan charge. This is a tax on accumulated loans as at 5th April 2019.

The tax due on the loans is actually calculated by adding to your other income the loans drawn in each tax year, assuming that you have open enquiries for those years. If you do not have enquiries then HMRC will tell you that the loan charge applies - but it may not.

I suggest that if you have all of HMRC's advice in writing, then you share it with an adviser and have them obtain a sign off from HMRC that everything is settled.

I fear it is not settled. I fear that some idiot in HMRC has fooled you and that is frankly unacceptable.

happy to help if you want to contact me. (Free of charge)

[Confusedetc]

Have you got it in writing from HMRC that paying the loan charge will be the end of the matter? That it will finalise your affairs?

Nope, but why should I.
I have done what they have asked of me both by letter and phone, and no where does it say in their letter regarding the loan charge, that after doing everything they have asked for, that actually that's not everything, there is more, but they just haven't told me what yet.

Am I supposed to go on the rest of my life being worrying about being punished and incurring further fines and being asked for more money, for being stupid and getting scammed, when I have gone to every effort to pay the tax that was not paid on that money I received.

[DealorNoDeal]

...they have told me doing this will clear this situation up and I can then move on from it...

Have you got it in writing from HMRC that paying the loan charge will be the end of the matter? That it will finalise your affairs?

[DealorNoDeal]

It makes you wonder who will be next to try and milk this...

Sicilian mafia acquire contractor loans

[Confusedetc]

Please see above.

Thanks for the reply, I am unsure what you mean by the below though:
This is the loan charge? Be aware that paying the loan charge settles nothing. eventually you will have to agree the tax position for each year you had payments and the amount paid via the loan charge will be a credit against that but there may be more to pay.

HMRC informed me I cannot settle because I missed that opportunity, so I have followed everything they have told me to do both by letter and many phone conversations with the loan charge dept, to combine the outstanding loans, split by 3, add that amount to each tax year for last year and next 2 tax years, and pay the tax owed which is calculated which I should have paid had it been classified correctly originally (and not hidden).

What more can they expect me to pay and do ? they have told me doing this will clear this situation up and I can then move on from it. I should not owe them anything else and have to further worry about more unknown charges being levied on me which you seem to indicate.

[Iter]

If no loan agreement exists, then the contractor should not have to pay back the monies. But (from reading the posts here), it seems that (legally) a loan agreement was place for the vast majority of the schemes that operated, despite what the recipient of those monies may think (or may have thought at the time).

However, whether there was or was not a loan in place does not alter the view that tax is due (in the eyes of HMRC, by the contractor) on the original payment from the client to the employer/scheme operator.

Tax has been paid and settled with HMRC

[webberg]

I hope this is the case, I was wondering if anyone has actually ever been forced to pay back this money ? had heavies sent round to retrieve it if not paid etc. I am not aware that such an event has happened.
Like you say I can't see how this would ever stand up in court, I really hope it wouldn't. Like I have been saying, "hope" in matters legal is often false. You are better off with evidence and argument.

I've recently paid back a vast sum of money to HMRC and will have to do so for the next 2 years after having the total loan split by 3 years. This is the loan charge? Be aware that paying the loan charge settles nothing. eventually you will have to agree the tax position for each year you had payments and the amount paid via the loan charge will be a credit against that but there may be more to pay.
Whilst I am now happy I am doing the right thing and getting this sorted, in the back of my mind is as part of this loan agreement and having to pay it back after 10 years (It makes me feel sick how I was so stupid I didnt read the T&C's properly with this in it), that come this time they are going to come after me.

It's actually causing me alot of stress and anxiety thinking about it every day at the moment. you are not alone in feeling as you do. Help is available. We (WTT) and others offer a free initial call to help you understand this and put you in touch with people who can help. Call us.

Please see above.