AML 2019 Loan Charge

[jazzyg]

AML with LTD Company

Do we have any people who had used AML but had limited company in place as well.This is what AML sold as Split Planning?

[webberg]

What if the flow was

End Client -> Agency ->LTD Co -> Promotor (AML)->AML loan to me

Pretty much the same place.

[Dundeegalaxy]

I was working through Principle Contractors with a Ltd company. After speaking with Vanquish I was sent the below. Thoughts?

Thank you for taking the time to make contact and speak with us today.
The Loan Charge, which will be brought in on the 6th of April next year, is unprecedented in its scope. Fortunately there are a number of options available to you. These options help to mitigate or eliminate the Loan Charge.

In summary, these are:

• Pay the “Loan Charge” by 31st of January 2020. This will typically cost 40-45% of the loan amount in tax; or
• Register for the “Contractor Loan Settlement Opportunity” before May 31st 2018 and make payments to HMRC within an agreed timescale. The timescale is usually 2-5 years from the date the settlement is agreed and typically will cost 25-35% of the loan sum in tax; or
• Repay your loan using our preferred loan repayment opportunity.

As indicated, your preferred option is the loan repayment opportunity, which enables your loan to be repaid before the April 6th 2019 deadline. This means that you should not be subject to the new Loan Charge legislation on this date. The arrangement will need to be completed in stages with implementation after the Pre Budget Report but before 6th April 2019.

For us to proceed, we need you to complete the attached Agreement Form, provide authority to the planning provider(s) to provide us with the details of your loan(s) outstanding and to pay your initial fee of £250.

This fee should be paid electronically to: xxx

[jazzyg]

Pretty much the same place.

Not a good place...What seems to be the settlement route here..? Let's say Contractor A at £400/day used AML and Contractor B at same rate used AML with LTD company. Their Billings to the Agency are say 400*5*4+20% VAT= 9600 a month.

A got 84% of this amount .84*8000 and
B got some income through Salary + Dividends and rest as partnership income + loans.

How would HMRC deal with B if B decides to settle.

Regards

[jazzyg]

I was working through Principle Contractors with a Ltd company. After speaking with Vanquish I was sent the below. Thoughts?

Thank you for taking the time to make contact and speak with us today.
The Loan Charge, which will be brought in on the 6th of April next year, is unprecedented in its scope. Fortunately there are a number of options available to you. These options help to mitigate or eliminate the Loan Charge.

In summary, these are:

• Pay the “Loan Charge” by 31st of January 2020. This will typically cost 40-45% of the loan amount in tax; or
• Register for the “Contractor Loan Settlement Opportunity” before May 31st 2018 and make payments to HMRC within an agreed timescale. The timescale is usually 2-5 years from the date the settlement is agreed and typically will cost 25-35% of the loan sum in tax; or
• Repay your loan using our preferred loan repayment opportunity.

As indicated, your preferred option is the loan repayment opportunity, which enables your loan to be repaid before the April 6th 2019 deadline. This means that you should not be subject to the new Loan Charge legislation on this date. The arrangement will need to be completed in stages with implementation after the Pre Budget Report but before 6th April 2019.

For us to proceed, we need you to complete the attached Agreement Form, provide authority to the planning provider(s) to provide us with the details of your loan(s) outstanding and to pay your initial fee of £250.

This fee should be paid electronically to: xxx

Just stay away from these guys..or any scheme providers. They got you in this mess in the first place!!

Speak to proper Tax Advisors. The ones who tell you that you have to sort this out. Webberg from WTT is one person and there are other advisors as well.

[simpleman]

I received my email from Knox & SP Management yesterday (24th Apr 2018) as well as duplicates from both today.

Firstly I just wanted to thank everyone who has shared their experiences on this post as it's been really helpful and supportive knowing that we're not alone. This is a potentially life changing scenario for some.

I'm useless with 'finance speak' and even more so with 'law speak' but if I have understood the situation correctly:

1. I paid [Management Company] my monthly wages.
2. [Management Company] paid me back my wages minus taxes as a loan payment.
3. HMRC declares that all loans in this scheme now have to be settled.
4. [Management Company] then offers a deal whereby we pay off this loan (which was our money to begin with).

I've grossly simplified my understanding of this situation but if this is correct then this... is... insane...

Again if I'm understand correct, from reading this thread it sounds like the best option is to settle with HMRC and pay the taxes on the loan amount (35%?).

My situation is that I used this scheme between Jun 2016 - Mar 2017 and received loan payments totalling £38k. Does this mean I am facing a potential charge of £13300 (plus penalties plus interest)? Is that correct?

What scares me though is the example scenario provided by Knox:

A contractor was involved in an arrangement from 2008/09 until 2010/11. They received a retainer each year equal to the Personal Allowance and loans of £50,000 in 2008/09, £60,000 in 2009/10 and £70,000 in 2010/11. They have had no enquiries or assessments from HMRC.

The contractor is now employed and is expected to be earning £100,000 a year in 2019/20 with tax deducted under PAYE.

Their total tax liability under the CLSO for the three years is around £50,000.

In comparison the loan charge would mean that on top of the tax due on the PAYE income, it will increase their tax liability for 2019/20 by £83,300.

Repaying the loan will cost £180,000.

In this scenario the contractor has to return the full loan amount.

What's the deal here?

[webberg]

Not a good place...What seems to be the settlement route here..? Let's say Contractor A at £400/day used AML and Contractor B at same rate used AML with LTD company. Their Billings to the Agency are say 400*5*4+20% VAT= 9600 a month.

A got 84% of this amount .84*8000 and
B got some income through Salary + Dividends and rest as partnership income + loans.

How would HMRC deal with B if B decides to settle.

Regards

I'd rather not discuss that here.

[Dundeegalaxy]

So is there a difference in being in this predicament through a Ltd company rather than whatever other means there was? The info available is very shoddy! Will be seeking advice from a tax advisor but very much hoping I am not going to have to stump up the £20,000 plus for the 1.5 years I was going through PCL!

[jazzyg]

So is there a difference in being in this predicament through a Ltd company rather than whatever other means there was? The info available is very shoddy! Will be seeking advice from a tax advisor but very much hoping I am not going to have to stump up the £20,000 plus for the 1.5 years I was going through PCL!

I agree with you..All cases have been missold and are holding up hands to say we want to settle. No matter what structure was used for DR, you have to calculate tax by adding loans to income and seeing what is due to be paid + interest.

[PokemonStay]

Just stay away from these guys..or any scheme providers. They got you in this mess in the first place!!

Speak to proper Tax Advisors. The ones who tell you that you have to sort this out. Webberg from WTT is one person and there are other advisors as well.

I am interested to know how to tell the difference between a rogue adviser and a proper adviser?