Loan Charge. What should I do. Loan Charge. What should I do.
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  1. #1

    Default Loan Charge. What should I do.

    I am new to this forum, I have just received my counter avoidance settlement letter from HMRC. It is a significant amount of money but I can afford to pay it. On all the years I received loans I was also employed and paid the maximum tax rate. The loans were put into a fund for my children's inheritance and my early retirement so were essentially untouched. Would I be better off paying the loan charge as this doesn't seem to attract interest and the tax rate will be much the same?

    Any advice much appreciated. Thank you

  2. #2

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    I don't think you have any alternative.

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    Just do the arithmetic - it's not that difficult.
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    Quote Originally Posted by Retrospective View Post
    I am new to this forum, I have just received my counter avoidance settlement letter from HMRC. It is a significant amount of money but I can afford to pay it. On all the years I received loans I was also employed and paid the maximum tax rate. The loans were put into a fund for my children's inheritance and my early retirement so were essentially untouched. Would I be better off paying the loan charge as this doesn't seem to attract interest and the tax rate will be much the same?

    Any advice much appreciated. Thank you
    Paying the loan charge doesn’t settle your tax affairs - they could still come after you for the interest.

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    Quote Originally Posted by Boodog View Post
    Paying the loan charge doesn’t settle your tax affairs - they could still come after you for the interest.
    Very goods point. Well worth getting an adviser.

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    Quote Originally Posted by BrilloPad View Post
    Very goods point. Well worth getting an adviser.
    Personally, if all the years are open then I would settle, especially since you can afford to. Otherwise the interest charge could end up being more in the long run.

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    Quote Originally Posted by Boodog View Post
    Personally, if all the years are open then I would settle, especially since you can afford to. Otherwise the interest charge could end up being more in the long run.
    Agree with this. As keeps being said, paying the loan charge doesn't settle any open underlying tax enquiries. The alternative to settling is to fight. Once you settle, it is final. You will not get your money back regardless of what happens with the loan charge.

    Perhaps join Big Group (not sure what their plans are as not part of that group due to having no open years). I know several people with open years who are part of Big Group.

    Also you could join LCAG - they exist with the sole aim of fighting the loan charge. However, there are people in a mixture of situations who are members (open/closed years combos etc). There is a forum where you can post questions and read other ongoing discussions.

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    Quote Originally Posted by NeedTheSunshine View Post
    Agree with this. As keeps being said, paying the loan charge doesn't settle any open underlying tax enquiries. The alternative to settling is to fight. Once you settle, it is final. You will not get your money back regardless of what happens with the loan charge.

    Perhaps join Big Group (not sure what their plans are as not part of that group due to having no open years). I know several people with open years who are part of Big Group.

    Also you could join LCAG - they exist with the sole aim of fighting the loan charge. However, there are people in a mixture of situations who are members (open/closed years combos etc). There is a forum where you can post questions and read other ongoing discussions.
    I think it’s only worth joining LCAG if you have closed years, but their success rate so far isn’t good, even with significant MP backing and H of P debates - happy to be corrected here.

    I doubt Big Group will be transparent on this forum as to what their plans are. Presumably, if you don’t settle open years and decide to fight, then you will have to contest that the loan charge doesn’t apply and be confident that the scheme in which you participated was legitimate - again, happy to be corrected!

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    Quote Originally Posted by NeedTheSunshine View Post
    Agree with this. As keeps being said, paying the loan charge doesn't settle any open underlying tax enquiries. The alternative to settling is to fight. Once you settle, it is final. You will not get your money back regardless of what happens with the loan charge.

    Perhaps join Big Group (not sure what their plans are as not part of that group due to having no open years). I know several people with open years who are part of Big Group.

    Also you could join LCAG - they exist with the sole aim of fighting the loan charge. However, there are people in a mixture of situations who are members (open/closed years combos etc). There is a forum where you can post questions and read other ongoing discussions.
    Big Group has been mentioned and I'll respond.

    We plan to litigate. We have two schemes on the brink and more waiting.

    Because the loan charge is now with us, we have developed a position on that as well. This is an extension of our core strategy and is complementary to what we are trying to achieve.

    If you have open years then unless you settle, you need a strategy. I have no doubt that post whatever date the settlement period is finally closed, those with open enquires will get a nice closure notice from HMRC along with an invitation to contest it in Tribunal.

    Doing that on your own is an expensive and scary ride.

    I have little doubt that those with closed years but exposure to the loan charge will get increasingly urgent reminders and eventually assessments/statements and demands for the money. These will be pursued with the usual vigour by Debt Management.

    Resisting that on your own is an expensive and scary ride.

    I hope LCAG is successful. That will remove one layer of the equation.

    I think though that whether you have open or closed years, unless you settle you need to prepare.

    Burying your head in the sand is not a strategy.
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    Quote Originally Posted by webberg View Post
    Big Group has been mentioned and I'll respond.

    We plan to litigate. We have two schemes on the brink and more waiting.
    Can you clarify what you mean by ‘on the brink’ - i.e. do you have an actual court date for these two schemes. Can you disclose which schemes these are?

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