AML 2019 Loan Charge

[Swan1e]

I've requested settlement and I'm deciding whether to proceed or not, however has anyone been successful in settling and getting the loans wrote off? if yes
1. what is the process of doing so,
2. was there any admin charges
3. can this be done by me or a tax expert
4. was there any IHT

I have loans with AML, Smartpay and SP management, is my problem X 3 and I have loans well into 6 figures.


thanks in advance

[webberg]

I've requested settlement and I'm deciding whether to proceed or not, however has anyone been successful in settling and getting the loans wrote off? if yes
1. what is the process of doing so,
2. was there any admin charges
3. can this be done by me or a tax expert
4. was there any IHT

I have loans with AML, Smartpay and SP management, is my problem X 3 and I have loans well into 6 figures.


thanks in advance

1. Ask AML/Knox House. Our experience is that they will write off, once you copy them the HMRC agreement.

2. Yes. They vary but a few hundred pounds.

3. The loan is a loan and tax expertise is irrelevant

4. Almost certainly HMRC will claim that there is.

[dangermaus]

I have some loans to be included in my tax return for the 2018-2019 year. My accountant has spoken to HMRC and has been advised to treat all payments paid by my Ltd Conpany to SP Management (including SPM’s fees) for that year as salary, rather than just the retainer and loans paid by SPM to my personal account.

Surely that’s not right?! Why should a payment by my Ltd company to SPM for services (their fees) be treated as my own personal income? Surely it should just be what has paid to me personally?

[webberg]

I have some loans to be included in my tax return for the 2018-2019 year. My accountant has spoken to HMRC and has been advised to treat all payments paid by my Ltd Conpany to SP Management (including SPM’s fees) for that year as salary, rather than just the retainer and loans paid by SPM to my personal account.

Surely that’s not right?! Why should a payment by my Ltd company to SPM for services (their fees) be treated as my own personal income? Surely it should just be what has paid to me personally?

What you have is HMRC's dogma and alleged "analysis" of the situation.

In HMRC land, the correct amount you are taxable on is that sum invoiced by your agent/intermediary, to the end client for your time and services.

From that amount, you have paid a fee and because that is a fee for a tax avoidance scheme, it is not tax deductible.

Ergo, you are due to pay tax as if you had received the full amount invoiced.

That analysis is flawed (in my opinion).

Rangers said that the income taxable upon the individual was the amount that the individual was entitled to "FROM THE EMPLOYER".

Last time I looked, the end client was not the employer (and if HMRC think they are, they why have they not sent a PAYE assessment to them?)

The employer was either your company or SP or some other intermediary.

If it was your company, that entity never had free use of the gross invoiced amount and cannot therefore have promised it to you as remuneration.

If it was SP, then their legal entitlement was to a fee for substantially the whole of the invoiced sum. Therefore they could (arguably should) be liable to PAYE on that as de facto employer or as a party acting in place of an employer. (We have seen HMRC issue notices of liability to such entities).

If it was an intermediary, then perhaps the rules in s 44 ITEPA should be called into play.

Whichever way you cut this however, the point remains that the amount paid in fees was never yours.

[dmuk]

I have been watching the recent commons debate on the loan charge at Parliamentlive.tv - Commons

This is entertaining viewing and is reassuring that some MPs are challenging HMRC.

Many of the MPs state the same message as members of the forum that HMRC sat back while these schemes were in action. One claim is that HMRC approved many of scheme or scheme provider. Where can one source this evidence for my own particular provider?

I know the scheme provider claimed they were rubber stamped by HMRC however what material evidence would support this?

[webberg]

I have been watching the recent commons debate on the loan charge at Parliamentlive.tv - Commons

This is entertaining viewing and is reassuring that some MPs are challenging HMRC.

Many of the MPs state the same message as members of the forum that HMRC sat back while these schemes were in action. One claim is that HMRC approved many of scheme or scheme provider. Where can one source this evidence for my own particular provider?

I know the scheme provider claimed they were rubber stamped by HMRC however what material evidence would support this?

Be very clear.

HMRC has never approved of any scheme.

Not only is such action not possible in law, it is contrary to HMRC policy and has been for as long as I an recall.

If a scheme promoter claimed that they were "approved", they were not telling the truth.

[dangermaus]

What you have is HMRC's dogma and alleged "analysis" of the situation.

In HMRC land, the correct amount you are taxable on is that sum invoiced by your agent/intermediary, to the end client for your time and services.

From that amount, you have paid a fee and because that is a fee for a tax avoidance scheme, it is not tax deductible.

Ergo, you are due to pay tax as if you had received the full amount invoiced.

That analysis is flawed (in my opinion).

Rangers said that the income taxable upon the individual was the amount that the individual was entitled to "FROM THE EMPLOYER".

Last time I looked, the end client was not the employer (and if HMRC think they are, they why have they not sent a PAYE assessment to them?)

The employer was either your company or SP or some other intermediary.

If it was your company, that entity never had free use of the gross invoiced amount and cannot therefore have promised it to you as remuneration.

If it was SP, then their legal entitlement was to a fee for substantially the whole of the invoiced sum. Therefore they could (arguably should) be liable to PAYE on that as de facto employer or as a party acting in place of an employer. (We have seen HMRC issue notices of liability to such entities).

If it was an intermediary, then perhaps the rules in s 44 ITEPA should be called into play.

Whichever way you cut this however, the point remains that the amount paid in fees was never yours.

Thanks for clarifying Webberg

In my settlement offer from HMRC it shows tax and NIC calculated based on sums received personally rather than on gross amounts paid the the schemes in question. It seems the terms offered in settlement are much more favourable than coming clean in a current tax return. Strange

[Iter]

The loan charge is meant to be tax on ‘outstanding loans’ [emoji848] Would this not be the amounts in theory then that you personally received and shown on payslips?

[here4beer]

The loan charge is meant to be tax on ‘outstanding loans’ [emoji848] Would this not be the amounts in theory then that you personally received and shown on payslips?

I ******** wish.

You also have to settle your limited company too (ie, having the corp tax readjusted). So, if personal settlement is £X,xxx, my 'complete' settlement is actually £X,xxx+80%

Horrendous.


I don't regret the scheme, I regret coming forwards to settle. My colleagues are still rolling in cash, while I'm having to sell my family home.

[dangermaus]

I ******** wish.

You also have to settle your limited company too (ie, having the corp tax readjusted). So, if personal settlement is £X,xxx, my 'complete' settlement is actually £X,xxx+80%

Horrendous.


I don't regret the scheme, I regret coming forwards to settle. My colleagues are still rolling in cash, while I'm having to sell my family home.

Surely you can’t be made to pay corporation tax on the same money you are being taxed on as if it were salary?!

That money isn’t profit if it’s classed as been paid and taxed as salary so shouldn’t incur a corporation tax charge...

Did you get professional advice before arranging settlement?