Reply to: Really need advice as just discovered I was in a loan scheme and have 6 hours left

[piebaps]

Just human nature webberg. Anonymous web forum vs something you were sold by real people. Nobody likes to discover that they were conned and the first instinct is denial. Acceptance comes a little later in the curve.

[webberg]

What he said.

Pretty much everything you have quoted is nonsense and will not offer any modicum of protection or allow you to make a valid argument.

One of the frustrations in this whole exercise is what people try to cling on to the very promoters who dropped them into the mess they're in. Never understood that.

[eek]

The umbrella company were/say they were my employer and the loans were above HMRC interest rate and the loans were under 10,000 for each tax year. Looking at HMRC “Expenses and benefits: loans provided to employees” It says this:

What's exempt

You might not have to report anything to HMRC or pay tax and National Insurance on some types of beneficial loans.

This includes loans you provide:

in the normal course of a domestic or family relationship as an individual (not as a company you control, even if you are the sole owner and employee)

with a combined outstanding value to an employee of less than £10,000 throughout the whole tax year (£5,000 for 2013 to 2014)

to an employee for a fixed and invariable period, and at a fixed and invariable rate that was equal to or higher than HMRC’s official interest rate when the loan was taken out

under identical terms and conditions to the general public as well (this mostly applies to commercial lenders)

that are ‘qualifying loans’, meaning all of the interest qualifies for tax relief - see the technical guidance for an explanation of this complex area

using a director’s loan account as long as it’s not overdrawn at any time during the tax year

Sorry it's bullsh1t - and completely irrelevant as you received money from them and HMRC believe that money is directly connected to your income - this loans would be for different reasons say relocation expenses and not connected to the salary you are being paid.

[eek]

Here is the message I just received from my former umbrella company - in short they say it was not a loan scheme and for me to just send the p60 as part of my tax return (I.e the p60 for the small £285 weekly wage I was paid which did have tax and NI deducted).


”Hi

First of all – you have not been part of a disguised remuneration scheme with Simply. You were employed through Simply from January 2018 to August 2018. Who did you go to work for after you left us? I can tell you now that over 500,000 of these generic letters have gone out from HMRC. All they are saying is that they believe you have been part of a scheme, not that you have. You can take a look at the letter and see that it says that. These letters are scare mongering people into phoning HMRC and telling them they have had loans – you have not had an illegal loan. All the letter is asking you to do is complete a self assessment for the year 2018-2019.

With regard to the Disguised Remuneration letter you have been sent, all that letter is saying is that they “think” that you have participated in disguise remuneration. Our commercial arrangements are not currently caught by disguised remuneration legislation. They sit outside the Benefit In Kind regime and are specifically excluded from the type of loans HMRC are trying to target, I have noted the link to confirm how they are exempt from taxation: Expenses and benefits: loans provided to employees: What's exempt - GOV.UK
I have spoken with over 500 people the past month about these letters and they have all been fine once completing the self assessment. Now everyone who comes through Simply is employed and we pay tax and national insurance every time the person is paid in real time with HMRC so normally would not have to complete the self assessment. However, in this case, HMRC are asking everyone to complete them. They are being extremely pushy in their manner and causing a lot of stress and anxiety to people.

Regards”


What do you think?

Well the one thing it doesn't say is that we deducted all PAYE payments correctly so you have nothing to worry about - and that's a very carefully written template letter which tells me they know it's a pile of lying crap...

[Raymondo]

The umbrella company were/say they were my employer and the loans were above HMRC interest rate and the loans were under 10,000 for each tax year. Looking at HMRC “Expenses and benefits: loans provided to employees” It says this:

What's exempt

You might not have to report anything to HMRC or pay tax and National Insurance on some types of beneficial loans.

This includes loans you provide:

in the normal course of a domestic or family relationship as an individual (not as a company you control, even if you are the sole owner and employee)

with a combined outstanding value to an employee of less than £10,000 throughout the whole tax year (£5,000 for 2013 to 2014)

to an employee for a fixed and invariable period, and at a fixed and invariable rate that was equal to or higher than HMRC’s official interest rate when the loan was taken out

under identical terms and conditions to the general public as well (this mostly applies to commercial lenders)

that are ‘qualifying loans’, meaning all of the interest qualifies for tax relief - see the technical guidance for an explanation of this complex area

using a director’s loan account as long as it’s not overdrawn at any time during the tax year

[Raymondo]

What did he promise to do?

Here is the message I just received from my former umbrella company - in short they say it was not a loan scheme and for me to just send the p60 as part of my tax return (I.e the p60 for the small £285 weekly wage I was paid which did have tax and NI deducted).


”Hi

First of all – you have not been part of a disguised remuneration scheme with Simply. You were employed through Simply from January 2018 to August 2018. Who did you go to work for after you left us? I can tell you now that over 500,000 of these generic letters have gone out from HMRC. All they are saying is that they believe you have been part of a scheme, not that you have. You can take a look at the letter and see that it says that. These letters are scare mongering people into phoning HMRC and telling them they have had loans – you have not had an illegal loan. All the letter is asking you to do is complete a self assessment for the year 2018-2019.

With regard to the Disguised Remuneration letter you have been sent, all that letter is saying is that they “think” that you have participated in disguise remuneration. Our commercial arrangements are not currently caught by disguised remuneration legislation. They sit outside the Benefit In Kind regime and are specifically excluded from the type of loans HMRC are trying to target, I have noted the link to confirm how they are exempt from taxation: Expenses and benefits: loans provided to employees: What's exempt - GOV.UK
I have spoken with over 500 people the past month about these letters and they have all been fine once completing the self assessment. Now everyone who comes through Simply is employed and we pay tax and national insurance every time the person is paid in real time with HMRC so normally would not have to complete the self assessment. However, in this case, HMRC are asking everyone to complete them. They are being extremely pushy in their manner and causing a lot of stress and anxiety to people.

Regards”


What do you think?

[Paralytic]

I haven't heard anything from him for a while. He promised to sort things out for me but he has gone underground and left me high and dry. Looking at a LOT more to pay now because of this.

What did he promise to do?

[PMTAXvictim]

Well i would suggest Phil Manley but ......

I haven't heard anything from him for a while. He promised to sort things out for me but he has gone underground and left me high and dry. Looking at a LOT more to pay now because of this.

[eek]

Hi. I’ve been up all night working furiously. Turns out I actually only was contacted in In late Aug regarding this loan charge. Previous correspondence was just that I’d underpaid tax so tax code would be adjusted.

I’ve contacted the umbrella company so I can see the loans. I assume I pay tax on the loans rather than the entire loan back. Working it out, I was saving around £60 per week on this scheme so can see why I thought it was legit - how stupid have I been. It’s going to cost me much more.

There were weeks I didn’t work etc so can’t accurately establish the actual amount of the loans.

I actual over paid tax and NI in one of my employments only 2017-2018 so assume this will be deducted from the 2017-2018 tax period when on this loan scheme.

Many many thanks for all the help. I’m shattered and devastated and I can’t imagine what others have and are going through.

You need to pay tax on the amounts that you were "lent". The loan charge is an unavoidable advanced payment on the tax owed that you do need to pay.

You will also need to settle with HMRC and agree the amount of tax that needs to be paid. This loan charge payment is an advanced payment on that settlement (but if you pay more than the final settlement amount you will not get the difference back).

[Raymondo]

Given as webberg says all advisors are going to be beyond busy today. You need figures which will be £550 for each week as that was the amount you received with no tax paid on it.


£550*13 (so £7150) for 17/18
£550*16 (so £8800) for 18/19 - As there was 17 weeks between April 5th and the end of July less 1 week for bank holidays.

You really need to work out when you started working and finishing but if you have nothing else that is the figures you are looking at - just a touch under £16k in loans.

Hi. I’ve been up all night working furiously. Turns out I actually only was contacted in In late Aug regarding this loan charge. Previous correspondence was just that I’d underpaid tax so tax code would be adjusted.

I’ve contacted the umbrella company so I can see the loans. I assume I pay tax on the loans rather than the entire loan back. Working it out, I was saving around £60 per week on this scheme so can see why I thought it was legit - how stupid have I been. It’s going to cost me much more.

There were weeks I didn’t work etc so can’t accurately establish the actual amount of the loans.

I actual over paid tax and NI in one of my employments only 2017-2018 so assume this will be deducted from the 2017-2018 tax period when on this loan scheme.

Many many thanks for all the help. I’m shattered and devastated and I can’t imagine what others have and are going through.

[eek]

Given as webberg says all advisors are going to be beyond busy today. You need figures which will be £550 for each week as that was the amount you received with no tax paid on it.


£550*13 (so £7150) for 17/18
£550*16 (so £8800) for 18/19 - As there was 17 weeks between April 5th and the end of July less 1 week for bank holidays.

You really need to work out when you started working and finishing but if you have nothing else that is the figures you are looking at - just a touch under £16k in loans.

[webberg]

Most advisers are not only closed but too busy to help.

use estimates and file what you can.

[GhostofTarbera]

I know. It’s embarrassing. I never learn.

So just pay the £45K + £5K interest and job done

Get a bounce back loan and pay it over 10 years


Sent from my iPhone using Contractor UK Forum

[Raymondo]

And you left it until virtually every professional advisor has closed for the day and gone home.

Sorry I cannot offer any help but leaving things until the last moment has compounded your problem.

I know. It’s embarrassing. I never learn.

[Raymondo]

£975 a week, a month, a day? Kind of important.

Assuming it's weekly, then that's a "loan" of £550 x 52.2 (weeks) x 2 years = £44,370.

Hi mate. My salary was £975 per week. However I received a payslip for £285 (after deductions about £235) and a loan of £550. So was paid approx £785 or about £60 more than PAYE.

I was in this scheme for about 7 months. 3 months in 2017-2018 and 4 months 2018 -2019.

Total sum of loans are less than 10,000 for each tax year and I was told this made it exempt. I was also told by an accountant it didn’t get caught by the loan charge but HMRC think differently . I joined here in 2018 but after I was told by this accountant everything was ok I stopped thinking about it. I believe I got a letter for the first time back in April if this year regarding this. I’ve been away from home self isolating with a sick child since April - helping my partner. I found an unopened letter from August yesterday. No excuses though. My fault. I annoy myself.