AML Loan Charge Calculator AML Loan Charge Calculator - Page 4
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  1. #31

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    Default Advice Please

    I registered for the settlement scheme last year and expected something through the post but to date I have received nothing from HMRC. I have years 2013-14 and 2014-2015 under enquiry whereby I completed SA's for both years. It now seems that I entered the wrong figure for 2014-15 so I need to somehow amend this if possible and pay additional tax. I have been told different views on whether or not expenses such as mileage are allowed to be offset against each year. I did not include an expenses on the original SA's so I would like some clarity on this subject asap given the time restrictions.

    I also had loans for 2015-2016 and 2016-2017 but HMRC have mentioned nothing about these years and I have letters saying I do not need to complete SA's for them strangely so again whats my stance on these?

    I have no idea when the protected thing means either so can someone explain this please?

    Thanks for any advice

  2. #32

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    Quote Originally Posted by AVFC View Post
    I registered for the settlement scheme last year and expected something through the post but to date I have received nothing from HMRC. I have years 2013-14 and 2014-2015 under enquiry whereby I completed SA's for both years. It now seems that I entered the wrong figure for 2014-15 so I need to somehow amend this if possible and pay additional tax. I have been told different views on whether or not expenses such as mileage are allowed to be offset against each year. I did not include an expenses on the original SA's so I would like some clarity on this subject asap given the time restrictions.

    I also had loans for 2015-2016 and 2016-2017 but HMRC have mentioned nothing about these years and I have letters saying I do not need to complete SA's for them strangely so again whats my stance on these?

    I have no idea when the protected thing means either so can someone explain this please?

    Thanks for any advice
    Legally, any loan you have had you are required to disclose. Just because they haven't mentioned it doesn't mean that it didn't happen. Legally, for the Loan Charge, opinion seems to be that you are entering evasion territory and the massive fines associated with it if you don't.

    Some people claim success with mileage but you need to be able to prove it.

    Whether or not you have been asked to complete an SA is irrelevant.

    PS Join LCAG and help fight it if you haven't already.

  3. #33

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    Quote Originally Posted by dammit chloe View Post
    Legally, any loan you have had you are required to disclose. Just because they haven't mentioned it doesn't mean that it didn't happen. Legally, for the Loan Charge, opinion seems to be that you are entering evasion territory and the massive fines associated with it if you don't.

    Some people claim success with mileage but you need to be able to prove it.

    Whether or not you have been asked to complete an SA is irrelevant.

    PS Join LCAG and help fight it if you haven't already.
    But HMRC have all of the details on P11D so I fail to see how they wouldn't know about the latter two years. I have also been told that if I pay the two years that are not under investigation before 5th April then HMRC can't charge interest even if I register them because they do not have an open an investigation. This was the opinion of two tax advisors.

    My account also told me that I can claim mileage even though my so called employer under the scheme said I could not so you can see that it's all a big minefield for everyone involved.

    How can you settle something when nobody can give clear accurate answers.

    What is LCAG are you referring to Big Group and what is the LCAG actively given we are 14 days away from end of financial year?

  4. #34

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    Quote Originally Posted by AVFC View Post
    But HMRC have all of the details on P11D so I fail to see how they wouldn't know about the latter two years. I have also been told that if I pay the two years that are not under investigation before 5th April then HMRC can't charge interest even if I register them because they do not have an open an investigation. This was the opinion of two tax advisors.

    My account also told me that I can claim mileage even though my so called employer under the scheme said I could not so you can see that it's all a big minefield for everyone involved.

    How can you settle something when nobody can give clear accurate answers.

    What is LCAG are you referring to Big Group and what is the LCAG actively given we are 14 days away from end of financial year?
    LCAG. Please see my latest post. It is not Big Group.

    I think you need to slow down a little. There is still time to find out a bit more and I can't tell you much from what you have said. What I can tell you is that the game is weighted in HMRC's favour. Just because they have not told you do do something doesn't mean you don't have to do it. By law, in the end, all loans need to be settled or declared.

    "I have also been told that if I pay the two years that are not under investigation before 5th April then HMRC can't charge interest even if I register them because they do not have an open an investigation"

    This bit is true but you still need to settle or pay the Loan Charge on them.

  5. #35

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    Quote Originally Posted by dammit chloe View Post
    LCAG. Please see my latest post. It is not Big Group.

    I think you need to slow down a little. There is still time to find out a bit more and I can't tell you much from what you have said. What I can tell you is that the game is weighted in HMRC's favour. Just because they have not told you do do something doesn't mean you don't have to do it. By law, in the end, all loans need to be settled or declared.

    "I have also been told that if I pay the two years that are not under investigation before 5th April then HMRC can't charge interest even if I register them because they do not have an open an investigation"

    This bit is true but you still need to settle or pay the Loan Charge on them.
    But your missing the point on the two years that are not currently under investigation. The tax and interest is the "The Loan Charge" so if there is no interest to pay which is a big factor then there is nothing else they can charge on those two years except the tax, rather like originally declaring the loan as additional income in the tax year it was received. As for the two years under investigation one year was only £8k which i declared and paid three years ago and the second one £25K and paid all the tax that the SA requested. I would have thought that HMRC would have come after me by now for more on the two open years if needed.

    My other point around expenses was that I had £2500 for the first year which I didn't offset against the £8k and £9000+ for the second year again which I didn't offset against the £25k I want to reopen these years in inject the expenses if possible.

    I have also read the LCAG website and tonight contacted my local MP for Swindon to plead with him to sign the EDM and get his colleagues to do the same. My advice for the LCAG is to focus the campaign towards maybe getting a BBC Panorama program done or a slot on Breakfast TV maybe with Eamonn Holmes because he hates HMRC and so does Lizz Kelly. Frankly any of the presenters would be only to keen to help shaft HMRC as they are all under the spotlight for tax reasons. Your fight against the big mask of brexit so getting airtime will be hard but something has to change before more people jump or step in front of trains.

    Absolutely gobsmacked about the Evening Standard running that piece given their editor "Trustfund George" was the architect of the Loan Charge.

    I wish LCAG all the best and will join but I intend to pay as it seems a fruitless task given Rangers had loads more cash and still lost. If people read their judgement the supreme court only needed to add one line to the end of it like " If a person is an employee only then explicit responsibility of tax on all monies received within that employment falls due on the employer and not the employee" They didn't because the bet was £1.2bn hence they do the bidding of the HMRC and the government which tells you all how this case will end. Rangers won at round one and got stuffed at rounds two and three.

  6. #36

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    Quote Originally Posted by AVFC View Post
    But your missing the point on the two years that are not currently under investigation. The tax and interest is the "The Loan Charge" so if there is no interest to pay which is a big factor then there is nothing else they can charge on those two years except the tax, rather like originally declaring the loan as additional income in the tax year it was received. As for the two years under investigation one year was only £8k which i declared and paid three years ago and the second one £25K and paid all the tax that the SA requested. I would have thought that HMRC would have come after me by now for more on the two open years if needed.

    My other point around expenses was that I had £2500 for the first year which I didn't offset against the £8k and £9000+ for the second year again which I didn't offset against the £25k I want to reopen these years in inject the expenses if possible.

    I have also read the LCAG website and tonight contacted my local MP for Swindon to plead with him to sign the EDM and get his colleagues to do the same. My advice for the LCAG is to focus the campaign towards maybe getting a BBC Panorama program done or a slot on Breakfast TV maybe with Eamonn Holmes because he hates HMRC and so does Lizz Kelly. Frankly any of the presenters would be only to keen to help shaft HMRC as they are all under the spotlight for tax reasons. Your fight against the big mask of brexit so getting airtime will be hard but something has to change before more people jump or step in front of trains.

    Absolutely gobsmacked about the Evening Standard running that piece given their editor "Trustfund George" was the architect of the Loan Charge.

    I wish LCAG all the best and will join but I intend to pay as it seems a fruitless task given Rangers had loads more cash and still lost. If people read their judgement the supreme court only needed to add one line to the end of it like " If a person is an employee only then explicit responsibility of tax on all monies received within that employment falls due on the employer and not the employee" They didn't because the bet was £1.2bn hence they do the bidding of the HMRC and the government which tells you all how this case will end. Rangers won at round one and got stuffed at rounds two and three.
    You already seem to know a lot about your situation and I am not a tax advisor but I am a bit confused, maybe because there is a lot of info. AFAIK interest is only applicable to open years settled under the CLSO2 settlement opportunity. Closed years and years you pay the Loan Charge on do not attract interest. Of course Loan Charge doesn't settle those open years so there's that.

    Each person has to make their own best decisions according to their circumstances.

    Most of the things you suggest have or are being done. Someone from LCAG tweeted Eamonn Homes and he picked up on it and did a slot on Talk Radio about it. We are trying to get a documentary done but that is more difficult.

    Virtually all the press coverage has been achieved through the LCAG efforts.

    Political pressure is a big factor here. We have a lot of cross party support, and in some people's view, the only people standing in the way of a change being made are Hammond and Stride. If that pair get removed, there is a decent possibility the Loan Charge could be withdrawn.

    The APPG report is due out in a week or so, I doubt it will be kind to HMRC or Treasury.

    It's also worth checking out the contract you are made to sign when settling. You have confessed to everything and you no longer have any rights or any recourse should things change. It is something that you would have thought only existed in cold war East Germany.

    If you are contracting and wish to keep contracting it is worth fighting anyway to stop even further aggressive moves by HMRC or the government.
    Last edited by dammit chloe; 24th March 2019 at 10:17.

  7. #37

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    I am late to the game here but just trying to clear this up in my head. Is the decision to settle going to be down to how much your income is now versus then? I am ignoring IHT here.

    Example:

    Loans:
    £50k loan from 2008/09

    Settlement scenario (A):
    HMRC recalculate your 2008/09 tax return by adding the £50k loan amount to your assessable income at the time.
    They then add interest from 2008/09 to today.
    Pay revised income tax figure + interest.

    Declare scenario (B):
    You include the £50k loan amount as your assessable income in your 2018/19 tax return.
    Pay income tax figure. Not interest applies.


    Only looking at scenario A - is this the type of consideration to make and compare it today including the loan figure in current tax return?

    A - no salary:
    £k
    0 Salary
    50 Loan
    --
    50 Assessable
    --
    Plus
    10 Tax
    2 Interest
    --
    12 owed under settlement

    A - salary:
    £k
    50 Salary
    50 Loan
    --
    100 Assessable
    --
    Plus
    30 Tax
    6 Interest
    --
    36 owed under settlement

  8. #38

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    Quote Originally Posted by dmuk View Post
    I am late to the game here but just trying to clear this up in my head. Is the decision to settle going to be down to how much your income is now versus then? I am ignoring IHT here.

    Example:

    Loans:
    £50k loan from 2008/09

    Settlement scenario (A):
    HMRC recalculate your 2008/09 tax return by adding the £50k loan amount to your assessable income at the time.
    They then add interest from 2008/09 to today.
    Pay revised income tax figure + interest.

    Declare scenario (B):
    You include the £50k loan amount as your assessable income in your 2018/19 tax return.
    Pay income tax figure. Not interest applies.


    Only looking at scenario A - is this the type of consideration to make and compare it today including the loan figure in current tax return?

    A - no salary:
    £k
    0 Salary
    50 Loan
    --
    50 Assessable
    --
    Plus
    10 Tax
    2 Interest
    --
    12 owed under settlement

    A - salary:
    £k
    50 Salary
    50 Loan
    --
    100 Assessable
    --
    Plus
    30 Tax
    6 Interest
    --
    36 owed under settlement
    As far as I am aware if your year is closed then there is no interest to pay when you settle, as it is voluntary.

    If you think that the Loan Charge may be overturned and have no open years then you can take the risk to not settle. If you have open years, then regardless of what happens with the loan charge you will have to deal with the issue. Interest will be stacking up.

    If you settle, whatever happens with the loan charge or litigation for your particular scheme you will not get the money back.

    So depending on the interest and open/closed issue and your earnings in the year you settling compared to your earnings for the loan charge year, it's a maths job.

    Or you think the loan charge is a complete outrage and choose to fight. Or for your open years you are prepared to litigate.

  9. #39

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    Be very careful.

    If your earlier year is under enquiry, your choice is essentially settle or fight.

    The loan charge is NOT settlement.

    If the year is under enquiry and you choose not to settle and the loan charge applies, then you will pay some tax in January 2020.

    In due course, it will be necessary to settle the year under enquiry. When that happens, the tax and interest due will be calculated, credit given for the loan charge paid and you will owe the difference.

    (In the event that the loan charge is more than the tax and interest due from the earlier year, there is no repayment).

    And I have simplified the above to show the effect rather than the exact mechanism used in the legislation, necessary in order to refute claims that the loan charge is retrospective.

    If your earlier year has no enquiry, then HMRC will claim that the loan charge is due and you have no option to settle the earlier year EXCEPT by way of voluntary restitution. That means that you pay an amount equal to the tax that would be due but you pay no interest as it's not tax.

    If you choose not to volunteer a payment, then you need to defeat the loan charge.

    Defeating the loan charge is being attempted by:

    1. Political means, i.e. persuading HM Treasury to reverse or remove the law presently on the statute book.

    2. Judicial Review, i.e. persuade a Judge that the law contravenes human rights or natural justice or perhaps some other grounds.

    3. Particular schemes not being within the remit, i.e. a loan direct from an employer is technically outside the rules. Beware this one however as HMRC has already persuaded the GAAR Panel that even though the law is clear and unequivocal, because Parliament "intended" to include all loans, it is "natural" to extend the loan charge to such situations.

    4. Argue that there is no loan (which is what HMRC claim for income tax purposes) and instead the payment is either employment income or a trust distribution or some other beast.

    (The last may allow escape of the loan charge but not perhaps the tax liability).

    Get advice.
    Best Forum Adviser & Forum Personality of the Year 2018.

    (No, me neither).

  10. #40

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    Quote Originally Posted by NeedTheSunshine View Post
    As far as I am aware if your year is closed then there is no interest to pay when you settle, as it is voluntary.

    If you think that the Loan Charge may be overturned and have no open years then you can take the risk to not settle. If you have open years, then regardless of what happens with the loan charge you will have to deal with the issue. Interest will be stacking up.
    Please could you clarify 'open years'? I assume you are referring to an HMRC open enquiry? And if so, does this scenario actually exist as I suspect HMRC have chosen to keep these enquiries open even though years have passed.


    Quote Originally Posted by NeedTheSunshine View Post
    Or you think the loan charge is a complete outrage and choose to fight. Or for your open years you are prepared to litigate.
    Good point - there's this third scenario of hoping the law will be overturned.

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