Any settlement figures yet?

[webberg]

That seems quite a simple fix to this outstanding loan mess. I assume it works because of the fiduciary trust relationship in that your dying 'best interest' is they don't take any thing from your estate?

Do not confuse the obligations of the trustees vis a vis the trust and beneficiaries with their entirely separate and distinct rights and obligations as representative of the lender.

In considering what is is "in the interests of the beneficiary", it is not impossible that a trustee would consider that assets held in cash are preferable to assets held in the form of a loan that many people (unwisely in my view) say they will never repay.

If there is a decision reached that the beneficiary is better off with cash, then loans will be recalled.

Defending a claimed repayment of a loan on the basis of the lender having another legal capacity in which they are charged with looking after a trust, is - we are advised by legal minds - unlikely to find much favour in Court.

Do not conflate the rights and obligations of the trustees and lenders. That is not a valid defence.

[dangermaus]

How my my scheme sounds very similar to yours, although i also took a tiny salary of 10k per year - the rest was small divis and big trust loans.

My 'complete settlement' done by a Tax Advisor, has my limited company paying employers NIC (13.8%), and me paying Employees NIC Class 1. I can't see Class 2 or 4 on there, unless that's already covered in my tiny salary?

Is yours complete settlement, or just personal?

edit - I'm very much of the opinion to just pay the 'lower' amount, and keep the delta aside in an ISA or something.

Mine is just personal settlement I guess although income tax and NIC’s have been calculated by HMRC.

I guess the difference with mine is that my ltd company didn’t pay me a salary which is maybe why class 1 NICs haven’t been calculated. I was paid a retainer and loan by the promoter

In HMRC’s detailed settlement terms it defines a contractor as the following:

2. Contractors
A contractor, for the purposes of these settlement terms, is someone who provides services to clients that don’t directly engage them. They may provide their services through an umbrella company, agency, partnership or their own company.

Contractors can be classed as either:

employed - they’ll have an employment contract, often providing their services via an offshore employer
self-employed - they’ll have a contract for services, meaning they provide their services in a self-employed capacity



It also goes on to mention the following:

2.2 National Insurance contributions (NICs): employed contractors
Employed contractors will not have to pay NICs personally but HMRC may still pursue their employer or other liable party.

2.3 NICs: self-employed contractors
Self-employed contractors will need to pay Class 2 and Class 4 NICs as appropriate on all DR loans or other payments. They may need to make voluntary restitution payments.

Class 2 and Class 4 NICs will be calculated using the rates and bands in the years the loans were made.



As I’ve never actually been an employee of my Ltd company (no employment contract? No payroll set up and never been paid a salary, I guess class 2 and 4 can be correct

Anybody else have a view on this?

[nobody123]

All

I requested settlement this time last year. Still haven't received settlement figure. Due to the loan charge approaching I asked HMRC for assurances that if my settlement offer is not provided and dealt with before 05th April 2019 will I be affected by LC if I settle after this date. This is the response I got from them.

"You have provided HMRC with all of the relevant information we need to help you settle your DR avoidance scheme use. If we have not agreed a binding settlement by 5 April 2019, the current settlement terms will still be available to you. We will write to offer you a final chance to settle under the existing terms and our letter will explain what steps you need to take. The loan charge will arise on 5 April 2019. If you accept our offer of settlement by the date specified in our letter making the offer, you will not need to declare and pay the loan charge. "

I will be keeping this email for safe keeping just in case. What are your thoughts on this?

Thanks

Sent from my CLT-L09 using Contractor UK Forum mobile app

[Boodog]

All

I requested settlement this time last year. Still haven't received settlement figure. Due to the loan charge approaching I asked HMRC for assurances that if my settlement offer is not provided and dealt with before 05th April 2019 will I be affected by LC if I settle after this date. This is the response I got from them.

"You have provided HMRC with all of the relevant information we need to help you settle your DR avoidance scheme use. If we have not agreed a binding settlement by 5 April 2019, the current settlement terms will still be available to you. We will write to offer you a final chance to settle under the existing terms and our letter will explain what steps you need to take. The loan charge will arise on 5 April 2019. If you accept our offer of settlement by the date specified in our letter making the offer, you will not need to declare and pay the loan charge. "

I will be keeping this email for safe keeping just in case. What are your thoughts on this?

Thanks

Sent from my CLT-L09 using Contractor UK Forum mobile app

There’s info from HMRC here:

HMRC issue briefing: disguised remuneration charge on loans - GOV.UK

So, as long as you provide the info they require for settlement by 5th April, you won’t need to pay the loan charge.

[ChimpMaster]

All

I requested settlement this time last year. Still haven't received settlement figure. Due to the loan charge approaching I asked HMRC for assurances that if my settlement offer is not provided and dealt with before 05th April 2019 will I be affected by LC if I settle after this date. This is the response I got from them.

"You have provided HMRC with all of the relevant information we need to help you settle your DR avoidance scheme use. If we have not agreed a binding settlement by 5 April 2019, the current settlement terms will still be available to you. We will write to offer you a final chance to settle under the existing terms and our letter will explain what steps you need to take. The loan charge will arise on 5 April 2019. If you accept our offer of settlement by the date specified in our letter making the offer, you will not need to declare and pay the loan charge. "

I will be keeping this email for safe keeping just in case. What are your thoughts on this?

Thanks

The part in bold is important. HMRC will play the obvious card of coercing you into settlement soon as possible, whereas in reality you could have until Sept 30th to sign the contract.

[webberg]

The part in bold is important. HMRC will play the obvious card of coercing you into settlement soon as possible, whereas in reality you could have until Sept 30th to sign the contract.

Slight correction - 31st August 2019 is the last day.

[Boodog]

The part in bold is important. HMRC will play the obvious card of coercing you into settlement soon as possible, whereas in reality you could have until Sept 30th to sign the contract.

Let’s face it, the deadline for settlement has been pushed back further and further - operationally HMRC would prefer settlement - the LC is yet another admin overhead and different set of calculations +-%?

[kryten22uk]

Slight correction - 31st August 2019 is the last day.

Can you expand on this? The settlement offers seem to arrive with a 30day acceptance period. Their email above suggests that you need to accept within that period to avoid LC. How come you suggest a date of 31-08-19? Ta.

[kryten22uk]

Does a settlement sum appear on your normal self assessment balance on GOV.UK? Just wondering if you can pay it off via their online payment system rather than bank transfer for example? Would be good if the former, so I can at least get some points/cashback via my payment card!

[passerby]

Does a settlement sum appear on your normal self assessment balance on GOV.UK? Just wondering if you can pay it off via their online payment system rather than bank transfer for example? Would be good if the former, so I can at least get some points/cashback via my payment card!

HMRC do not accept credit cards anymore