HMRC settlement Deadlines/delays and the LC HMRC settlement Deadlines/delays and the LC - Page 4
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  1. #31

    Nervous Newbie


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    Default HMRC contractor Loan harge

    Quote Originally Posted by phil@dswtres View Post
    Yep, though just made me think- as we well know they do like to ignore case law!
    Dear Phil,

    I have been following your advise on here for a while and wanted to reach out. I was hoping you might be able to advise on the below queries if possible.

    I joined SP Management in 2013 for 3 months. Following that I was in a permanent job / out of employment up until August 2015 when I rejoined the SPM scheme.

    I have been told by PTS that loan amount subject to charge is £110,101.51.

    Few questions based on the above.

    1) Will this be taxed at 35% (if I agree to settle) or will this be less? Reason I ask is that on the example scenario on The Knox trust website (link below) shows that £180,000 loan had a tax payable of £50,000 which is approximately 27.7%. I have never claimed any form of expense and have paid NI etc on previous tax returns.

    https://knoxhousetrust.com/2019-loan...on/#settlement

    2) Do I have to declare all loans before 2016? I heard that it's only loans after 2016 that need to be declared and that are affected.

    3) What are unprotected versus protected loans and how does it affect me in my particular case?

    4) What is the worst case scenario regarding tax on my loan versus being subject to the loan charge?

    5) 40,000 people are estimated to be affected on SP Management and a further 200,000 affected in the UK. I have to ask why should I even declare now, perhaps I should wait until HMRC come to me? I have no open enquiries and have never been queried by HMRC.

    6) How do I know if my scheme has a DOTAS or promotion reference number?

    7) I have been told by SPM that loans paid through SPM Malta are not taxable. Is that correct?

    I think these are all the questions I have at this stage. Thanks so much.

    Regards

  2. #32

    More time posting than coding


    Join Date
    Apr 2016
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    Default

    Quote Originally Posted by Crypto1 View Post
    1) Will this be taxed at 35% (if I agree to settle) or will this be less? Reason I ask is that on the example scenario on The Knox trust website (link below) shows that £180,000 loan had a tax payable of £50,000 which is approximately 27.7%. I have never claimed any form of expense and have paid NI etc on previous tax returns. Use this tax calculator to work it out. For each year, enter your total income (salary + loans). Then take the amount calculated and subtract any tax you already paid.
    https://www.uktaxcalculators.co.uk

    2) Do I have to declare all loans before 2016? I heard that it's only loans after 2016 that need to be declared and that are affected. All loans back to Apr 1999

    3) What are unprotected versus protected loans and how does it affect me in my particular case? protected years are ones where HMRC opened an enquiry or raised an assessment. Yours all sound like they're unprotected.

    4) What is the worst case scenario regarding tax on my loan versus being subject to the loan charge? You'll have to do the calcs yourself. For the LC, all loans will be treated as income in this tax year 2018/19

    5) 40,000 people are estimated to be affected on SP Management and a further 200,000 affected in the UK. I have to ask why should I even declare now, perhaps I should wait until HMRC come to me? I have no open enquiries and have never been queried by HMRC. Assuming you don't settle, if you don't disclose loans by 30 Sept 2019 you could get penalties if they eventually catch up with you. If you don't pay the LC by 31 Jan 2020, penalties could be even worse.

    6) How do I know if my scheme has a DOTAS or promotion reference number? The number would have been on your tax returns. I think this is unlikely otherwise you'd have had enquiries and APNs.

    7) I have been told by SPM that loans paid through SPM Malta are not taxable. Is that correct? Don;t know but it sounds a bit suss
    I'll take a stab at answering and Phil can correct as necessary.
    Last edited by Loan Ranger; 20th May 2018 at 10:01.

  3. #33

    More time posting than coding


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    Apr 2016
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    Quote Originally Posted by AVFC View Post
    I was requested in 2017 to complete SA tax returns for 13/14 and 14/15 by HMRC as they believed I had disguised remuneration in the form of loans. I completed these and declared the loans under additional income then paid the amounts due for each year. So, you paid full tax on the loans? If so, then those years are done and dusted.For the years 15/16 and 16/17 I had written confirmation and verbal confirmation that I did not need to complete SA's for these years even though I was a member of a scheme so I have the following questions? That sounds a bit strange.

    1 Given that I have not had any further letters from HMRC regarding 13/14 and 14/15 am I safe to assume that this is now sorted given that an accountant said that 13/14 might even have expired by now. Only if you paid full tax on the loans as income.

    2 I assume HMRC will charge people based on their P11D and P45 figures so if the P11D figure is different to what was received how will they ever know and successfully charge people especially if they have not requested people to complete SA's for any additional years For the LC, you are required to disclose your loans to HMRC by 30 Sept 2019.

    3 What is the likely chance of offsetting expenses on your SA against each of these years such as mileage, subsistence, they fee's charged by the scheme provider as an accountant told me that I am entitled to claim mileage\subsistence and that my employer\scheme provider was wrong to tell me that this was not allowed. May be possible if you haven't already filed a tax return.

    4 Given that all this was a result of the Rangers case whereby the Supreme Court ruled that Rangers as the employer was responsible for paying the tax and NI due then surely the contractors are not liable to pay the tax and this is all scare tactics by HMRC. I understand that BIG Group are looking to possibly challenge based on this argument. The LC can be transferred to you, as described here:

    April 2019 Loan Charge

    5 Last question. Any merits in sueing the scheme provider for fraud and misrepresentation of their goods and services? Probably not
    I have taken a stab, and Phil can correct as necessary.

  4. #34

    Still gathering requirements...


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    May 2018
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    Quote Originally Posted by phil@dswtres View Post
    1.You only need to register interest by 31 May. No loan details are required to be given.
    I sent an email to cl.resolution@hmrc.gsi.gov.uk, whilst I work out what I'm going to do. Although it's looking ever more likely I will settle, I need to work out what my liability is before I proceed down that route.

    In the email, I included my NI number and UTR reference.

    This was sent on Friday morning but I received no acknowledgement. Is there usually an automated response? If not, how can one check the email has been received?

  5. #35

    Nervous Newbie


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    May 2018
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    Default Amending SA Returns

    Quote Originally Posted by Loan Ranger View Post
    I have taken a stab, and Phil can correct as necessary.
    I paid all of what the SA calculation tool told me was owed for both years and my accountant said that I could go online and amend an SA retrospectively to claim any expenses that were no on the original SA I submitted although I have not done this yet.

    I understand that nobody in any of the schemes claimed expenses because they were told not to as it would attract a negative tax situation.

    For example I had a loan of 26K for 14/15 and paid something near 7k via the SA calculation tool. If I'd have submitted expenses based on mileage and subsistence at the standard HMRC rates they come to 9.5K so that would be a big reduction on the tax bill.

    If I voluntarily do SA's for the next two years and again pay whatever the system tells me I would assume I am clear for those years so I won't face any LC in 2019?

  6. #36

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    Quote Originally Posted by Loan Ranger View Post
    I'll take a stab at answering and Phil can correct as necessary.
    Thanks Loan Ranger.

    Given my loans are unprotected what does that specifically mean HRMC either can or cannot do?

    Also if I declare on one year and not the other (as I am working out if this is indeed taxable) how does HMRC find out? They will rake in billions it seems from others.

  7. #37

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    Quote Originally Posted by AVFC View Post
    I paid all of what the SA calculation tool told me was owed for both years and my accountant said that I could go online and amend an SA retrospectively to claim any expenses that were no on the original SA I submitted although I have not done this yet.

    I understand that nobody in any of the schemes claimed expenses because they were told not to as it would attract a negative tax situation.

    For example I had a loan of 26K for 14/15 and paid something near 7k via the SA calculation tool. If I'd have submitted expenses based on mileage and subsistence at the standard HMRC rates they come to 9.5K so that would be a big reduction on the tax bill.

    If I voluntarily do SA's for the next two years and again pay whatever the system tells me I would assume I am clear for those years so I won't face any LC in 2019?
    Yup agree. I didn't claim any expenses either on any of my years because was advised against it. I am having troubles trying to work out how to use the tax calculator.
    Can someone explain to me what documents I need in front of me to plug in the numbers and where I do this. Cheers

  8. #38

    Should post faster


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    Jul 2017
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    Quote Originally Posted by RickG View Post

    This was sent on Friday morning but I received no acknowledgement. Is there usually an automated response? If not, how can one check the email has been received?
    You should get an auto response in seconds.
    If not check their email address and your spam folder.

  9. #39

    Still gathering requirements...


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    May 2018
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    Quote Originally Posted by me206et View Post
    You should get an auto response in seconds.
    If not check their email address and your spam folder.
    Doh - thank you very much. The auto response was indeed in my SPAM folder.

  10. #40

    Nervous Newbie


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    Default Tax Calculator

    Quote Originally Posted by Crypto1 View Post
    Yup agree. I didn't claim any expenses either on any of my years because was advised against it. I am having troubles trying to work out how to use the tax calculator.
    Can someone explain to me what documents I need in front of me to plug in the numbers and where I do this. Cheers

    From what I am told you just need your P60 and the value of the loan in that year which you should be able to get from your p11D or by adding it up from your bank statements. If you have a P11D for a certain year just cross reference it to the money in from your scheme provider and see if it matches up.

    Then calculate the tax and take of what has already been paid on the P60. You might also be able to take off any benefit in kind tax that you have been hit for in the following year but not totally sure about this point.

    Also speak to a local accountant and get a position on the expenses bit as if they are allowed it could save you a few quid!

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