Paid LOAN SETTLEMENT in 2015 and now have to pay a LOAN CHARGE? Paid LOAN SETTLEMENT in 2015 and now have to pay a LOAN CHARGE?
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  1. #1

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    Angry Paid LOAN SETTLEMENT in 2015 and now have to pay a LOAN CHARGE?

    Good evening,
    I was one of the (possibly few) people who paid the Contractor Loan Settlement when contacted repeatedly by the HMRC in 2013 and 2014. I was led to believe that would be the end of the matter and that I would not be asked for any further tax payment against the 'loan payments' I received.
    I have now just received a letter advising I owe what is now called a 'Loan Charge'.

    Is anyone else in this position, ie. paid up and now being asked for more under a different label? Any advice? I don't live in the UK any longer. I don't work, and my Ltd Co has been wound up. I don't have funds to pay more!

  2. #2

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    If you have already settled I am wondering what more there is for you to pay.
    Maybe contact HMRC and ask them?

  3. #3

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    Quote Originally Posted by retirednow View Post
    Good evening,
    I was one of the (possibly few) people who paid the Contractor Loan Settlement when contacted repeatedly by the HMRC in 2013 and 2014. I was led to believe that would be the end of the matter and that I would not be asked for any further tax payment against the 'loan payments' I received.
    I have now just received a letter advising I owe what is now called a 'Loan Charge'.

    Is anyone else in this position, ie. paid up and now being asked for more under a different label? Any advice? I don't live in the UK any longer. I don't work, and my Ltd Co has been wound up. I don't have funds to pay more!
    Am guessing you had "closed" years - so your CLSO you paid tax on the years that HMRC had opened an enquiry or DA, but got a few years "for free"? If thats the case, you've probably got a good argument that these are covered as "settled" years and hence excluded from LC 2019, as that was the deal for CLSO1 - settling the EBT years up to 2011.. I'd speak to HMRC to get clarity or go through an advisor.

    If you have loans from post-EBT schemes that weren't part of CLSO1, then, unfortunately you may well be liable.. again.. investing in a decent advisor should help get you clarity on your position.

  4. #4

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    Quote Originally Posted by CDJ View Post
    Am guessing you had "closed" years - so your CLSO you paid tax on the years that HMRC had opened an enquiry or DA, but got a few years "for free"? If thats the case, you've probably got a good argument that these are covered as "settled" years and hence excluded from LC 2019, as that was the deal for CLSO1 - settling the EBT years up to 2011.. I'd speak to HMRC to get clarity or go through an advisor.

    If you have loans from post-EBT schemes that weren't part of CLSO1, then, unfortunately you may well be liable.. again.. investing in a decent advisor should help get you clarity on your position.
    Or you have just received the mail shot because you are on a big list of "bad" people!

  5. #5

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    Quote Originally Posted by Clairol View Post
    If you have already settled I am wondering what more there is for you to pay.
    Maybe contact HMRC and ask them?
    Yes, I don't know why I'm putting that off!

  6. #6

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    Default Are Closed Years Exempt if One has Already Settled Open Years with CLSO1?

    Quote Originally Posted by Delendog View Post
    Or you have just received the mail shot because you are on a big list of "bad" people!
    This could be a very important point for some, who might otherwise be hoodwinked into paying up when they don't need to. HMRC seem to be very cosy and - dare I say it - evasive on earlier advice and reassurances...

    What is the legal position now, if one had earlier settled open years with CLSO1? Weren't the closed years untaxable as part of that legal agreement, or does the new legislation override that legality? Or are HMRC going to chance it, and it will have to be challenged to find out the answer (like so many things probably queued up until after April 2019 and Brexit)?

    Interesting times!

  7. #7

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    Quote Originally Posted by Groundhogdays View Post
    This could be a very important point for some, who might otherwise be hoodwinked into paying up when they don't need to. HMRC seem to be very cosy and - dare I say it - evasive on earlier advice and reassurances...

    What is the legal position now, if one had earlier settled open years with CLSO1? Weren't the closed years untaxable as part of that legal agreement, or does the new legislation override that legality? Or are HMRC going to chance it, and it will have to be challenged to find out the answer (like so many things probably queued up until after April 2019 and Brexit)?

    Interesting times!


    I entered into CLOS1 and had agreed in principle to settle nearly 3 years ago - I paid an extortionate amount to a Tax Professional - 3 years later nothing from HMRC - I assumed I had heard nothing as they were busy - but kept waiting on the settlement. I believe now that they did this deliberately as Loan Chharge was coming into legislation -

  8. #8

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    Quote Originally Posted by Aki1 View Post
    I entered into CLOS1 and had agreed in principle to settle nearly 3 years ago - I paid an extortionate amount to a Tax Professional - 3 years later nothing from HMRC - I assumed I had heard nothing as they were busy - but kept waiting on the settlement. I believe now that they did this deliberately as Loan Chharge was coming into legislation -

    Leaving enquiries open after running out of questions certainly became an HMRC tactic, whereas they might otherwise have formally closed them. Most people didn't know that they could get HMRC to close an enquiry if no further questions and without having identified any liability under current law (at the time).

    I think the same happened with CLSO1 latterly, once HMRC had Rangers ruling and Loan Charge on the horizon. Pretty shoddy treatment, but one has to understand what and who one is dealing with. It's a dirty business now all round where trust and fair play doesn't come into it. For our survival, we must grow thicker skins or we risk our mental health.

    I've held back until now, but can see that HMRC is deliberately stalling on settlement correspondence with individuals - probably to reap the Loan Charge harvest later. Recognise a pattern here?

    Tax advisor help now, may or may not help. I think HMRC is more likely to respond either to a group representative already in talks, or else to someone who has all their info ready and funds readily available to settle.

    Or one can hold out for 2019 or 2020 cliffhanger, and hope a last minute save comes up in the form of MPs forcing a change in legislation, or legal cases turn into a game changer.

    I'm not even sure HMRC want us to settle, when they can sit pretty, herd everyone into the Loan Charge, then hit repeat as loans will still be outstanding, even if only the potential IHT exposure.

  9. #9

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    I settled in 2014, and also received the loan charge letter last week.

    I took a close look at the CLSO 01 wording:

    You can settle your affairs now. This will give you certainty about your tax liabilities and save you and us costs.Reaching agreement now will mean that liabilities in relation to sums you have received under these arrangements of years up to and including 2010/11 are final.

    Looks unambiguous. But the next line says:

    During this settlement opportunity we will restrict settlement to 2010/11, and earlier years for which we have open enquiries or assessments. If any future proceedings we will consider the conditions for all potential years of charge to 2010/11.

    So the key question is whether HMRC had an open enquiry for all years up to 2010/11, or only some. I've contacted HMRC for clarification via email (I couldn't get though on the phone) so will have to wait and see.

  10. #10

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    I have a mail from our friends at HMRC saying that CLSO as was the end of it for me including unprotected years
    Last edited by bluemonkey71; 15th August 2018 at 22:29.

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