Reply to: Disguised remuneration / loan charge

[Fred Bloggs]

I may have an alternative option for voiding the loan charge, or any settlement agreement (that you may have come to with the HMRC). I know someone who has done it, and wants to share how he did it with others. If you would like to know more, then PM me.

Oh my. Did the poster put this up for a bet?

[sadkingbilly]

Absolutely this. Ph1com - If you do not contact WTFH with details of his request (spoiler: not a request) and then proceed to post we will permanently ban you from this forum.

In the meantime, please note that this poster does NOT have PM rights, so don’t bother contacting him.

drat! - i've run out of snake oil too.

[cojak]

If it was legal and genuine, you (and others) would be shouting about it from the rooftops.

If you'd like to provide me with the name of the person who has done this successfully, then I will contact them to confirm/deny what you have said.

Absolutely this. Ph1com - If you do not contact WTFH with details of his request (spoiler: not a request) and then proceed to post we will permanently ban you from this forum.

In the meantime, please note that this poster does NOT have PM rights, so don’t bother contacting him.

[WTFH]

If you would like to know more, then PM me.

If it was legal and genuine, you (and others) would be shouting about it from the rooftops.

If you'd like to provide me with the name of the person who has done this successfully, then I will contact them to confirm/deny what you have said.

[sadkingbilly]

I may have an alternative option for voiding the loan charge, or any settlement agreement (that you may have come to with the HMRC). I know someone who has done it, and wants to share how he did it with others. If you would like to know more, then PM me.

got a sideline in snake oil too, perchance?

[eek]

Some tulip or other

If you want advice speak to WTT or some other tax expert not a random person online that you don't personally know..

[Ph1com]

I may have an alternative option for voiding the loan charge, or any settlement agreement (that you may have come to with the HMRC). I know someone who has done it, and wants to share how he did it with others. If you would like to know more, then PM me.

[woody1]

I have just had clarity on Employers' NICs and the transfer of liability from HMRC: 2. If HMRC transfers any liability to the employee, then both tax and primary Class 1 NICs will usually be collected from the employee. Secondary Class 1 NICs (traditionally paid by the employer) will not be transferred.

They may not transfer primary NICs either. They didn't in the case of loan and other DR schemes.

Probably the only way to know for sure would be to request a settlement calculation. This should also tell you how much interest is due.

[bylren001]

I have just had clarity on Employers' NICs and the transfer of liability from HMRC: 2. If HMRC transfers any liability to the employee, then both tax and primary Class 1 NICs will usually be collected from the employee. Secondary Class 1 NICs (traditionally paid by the employer) will not be transferred.

[woody1]

I seem to recall that NI was only payable with self-employed schemes (class 4?).

Where scheme members were employees, receiving a small salary under PAYE and loans, then settlement was only tax (+ late payment interest). IE. no employee or employer NICs.

However, I don't know if "dodgy umbrellas" are treated differently to schemes.

[eek]

Just wanting to make sure if the same calculation would apply if I was trying to estimate my liability from using one of thes dodgy umbrella companies. So far I have made provision for tax, employees NI but not employers NI. If HMRC transfer the liability to me will I be liable for all three?

HMRC will look at what the agency reported the scheme received and will calculate what is owed including Employer NI and then ask you to pay it...

In theory they could seek the employer NI from the agency but the reality is that they have only just started at looking at that and currently they are focussed on recovering the lost VAT that way....

[bylren001]

If you are settling a year, then you can work out the underpayment as follows.

Add up all the loan payments you received in that year (L).
Note the total salary you received in that year (S).
Note the amount of PAYE tax you already paid (TP).

Enter your Gross Income for the year (L+S) into this tax calculator.
https://www.uktaxcalculators.co.uk

Note the Tax Due (TD). The amount you've underpaid is TD-TP.

In addition to tax, you will also be charged late payment interest. (If you were an employee, on PAYE, then there shouldn't be any additional NI.)

Just wanting to make sure if the same calculation would apply if I was trying to estimate my liability from using one of these dodgy umbrella companies. There are three potential liabilities PAYE, Employees NI, Employers NI. If HMRC transfer the liability to me will I be liable for all three?

[Chevalier]

Thanks for the info., it confirms my worse fears. If the loan charge is payable, as opposed to settling the individual years, then would I still be able to elect to spread it over three years? And also, do you think I would have a strong basis for arguing that the loan charge should be based not on the unverified figure provided by the promoter, but on HMRC's calculations for the individual years remittances from the promoter to me, as these payments represent reality, not the promoters figures?

The loan charge is based upon the value of loans or similar arrangements outstanding in 2019 (NB just the principal sum)

If there were any loans (or similar) made between 2010 or 2019 these would be rolled up into the loan charge regardless of whether an investigation or discovery was made - unless of disclosure to a very high standard was made. This might be a reason why the assessed values may be different.

if there’s still an unexplained difference appeal and discuss with HMRC. Failing that you always the option to appeal to the tax tribunal system

[interestedparty]

Thanks for the info., it confirms my worse fears. If the loan charge is payable, as opposed to settling the individual years, then would I still be able to elect to spread it over three years? And also, do you think I would have a strong basis for arguing that the loan charge should be based not on the unverified figure provided by the promoter, but on HMRC's calculations for the individual years remittances from the promoter to me, as these payments represent reality, not the promoters figures?

Update - I've just realised the option to spread over 3 years is no longer available, although I can make a late request - the odds on this being accepted seems unlikely.

[interestedparty]

The loan charge was brought in to “encourage” settlement, with a condition that if settlement hadn’t been agreed by a certain date then the loan charge applied.

The 2020 settlement terms indicate you have to pay the loan charge, then HMRC will consider whether you need to pay anything over and above this for previous years (residual tax)

I don’t think you will pay anything less than the loan charge if you have not settled.

Thanks for the info., it confirms my worse fears. If the loan charge is payable, as opposed to settling the individual years, then would I still be able to elect to spread it over three years? And also, do you think I would have a strong basis for arguing that the loan charge should be based not on the unverified figure provided by the promoter, but on HMRC's calculations for the individual years remittances from the promoter to me, as these payments represent reality, not the promoters figures?