Could I end up paying HMRC the tax and being asked to pay my loan back? Could I end up paying HMRC the tax and being asked to pay my loan back?
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  1. #1

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    Default Could I end up paying HMRC the tax and being asked to pay my loan back?

    Hi. I’m new here and seeking advice so please be gentle.

    I’ve tried to read as much as possible about the loan charge. I can’t afford the tax advice.

    Last week, I had the letter from HMRC about possible disguised remuneration and I contacted them. They said they are querying an umbrella company with offshore element that I used for 4 months in 2017. My agent at the time recommended this to me.

    I understand I’m now going to have to pay tax on this money so in the vein of getting it sorted, I have a settlement spreadsheet to complete.

    I was trying to fill it in and got confused by the question about whether I was going to be ‘writing the loan off’. I don’t understand this. Do I have to ask the offshore company to write the loan off? I’m really worried about asking them to do this, could they say no?

    When I briefly spoke to the offshore company (after I got the HMRC letter) they told me the loan I have isn’t affected by the loan charge and that I shouldn’t worry. (Obviously I appreciate they would say that)

    I’m actually really worried now that I am going to end up paying the tax due to HMRC and then the offshore company who gave me the loan are going to request the money back or at least keep charging me interest every year. Does anyone know if this can happen? Has it happened to anyone on here? Could they take me to court for not paying it? Would it be a UK court or offshore? I’m really worried they may come after me and it’s making me very anxious. I’ve expkaimrd all this to HMRC.

    I’ve tried to dig out the loan agreement which clearly says it’s a business loan that’s repayable and that I have to pay interest.
    Of note, I paid interest on it earlier this year. HMRC said I could send them this evidence?

    I’ve explained all this to HMRC who didn’t seem to know what to say to me and they are getting someone more senior to call me back. I haven’t heard from this person yet.

    I am really worried about this mess I’ve got in to.

    Thanks in advance for any help

  2. #2

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    You're not the first to ask this and really HMRC has made a complete mess of the whole situation.

    Can I recommend that you go here: Loan Charge Action Group and join up with LCAG to fight against HMRC's retrospective tax. Write to your MP via WriteToThem - Email your Councillor, MP, MEP, MSP or Welsh, NI, or London Assembly Member for free so that your MP can fight your corner in parliament.

  3. #3

    Still gathering requirements...


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    Clare .... above is very sensible advice.

    get some assistance from people that are in the know before you do anything.

    Join LCAG 100%. I did I now have a much better idea. I will still need some professional advice and there are two firms who people will put you in touch with.

    Will be the best £100 you spend joining LCAG.. trust me

  4. #4

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    We (WTT) and Phil Manley (DSW) both offer a free initial consultation and I recommend that you call one or both of us.

    It sounds as though you have a loan from an employer that they claim is outside the loan charge and outside the disguised remuneration rules.

    In terms of disguised remuneration, two recent GAAR opinions show that HMRC is viewing the question of whether money was received via a route that "was within the intent of Parliament" is taxable, even if (inconveniently) the gateway condition of a third party being present is not met. This will be an argument eventually sorted out in Tribunal or Court (in perhaps 5 years time).

    In terms of the loan charge, the promoter may have a point for so long as the loan was made by the employer and remains with the employer. That is not that rare but not that common.

    Regardless of the tax position, you do need to have the obligation to repay the loan removed. HMRC has no influence on whether the lender can collect from you. HMRC however does make vague promises about "extracting" you from tax avoidance. They can't.

    Call us or Phil or both.
    Best Forum Adviser & Forum Personality of the Year 2018.

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  5. #5

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    Quote Originally Posted by webberg View Post
    In terms of disguised remuneration, two recent GAAR opinions show that HMRC is viewing the question of whether money was received via a route that "was within the intent of Parliament" is taxable, even if (inconveniently) the gateway condition of a third party being present is not met.
    Hi Graham, which cases were those?

  6. #6

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    Quote Originally Posted by GoneSurfing View Post
    Hi Graham, which cases were those?
    Not cases but GAAR opinions.

    Dated (from memory) 11th and 12th October and released in November.

    One is here

    https://assets.publishing.service.go...ans__Mr_B_.pdf
    Best Forum Adviser & Forum Personality of the Year 2018.

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  7. #7

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    Quote Originally Posted by webberg View Post
    We (WTT) and Phil Manley (DSW) both offer a free initial consultation and I recommend that you call one or both of us.

    It sounds as though you have a loan from an employer that they claim is outside the loan charge and outside the disguised remuneration rules.

    In terms of disguised remuneration, two recent GAAR opinions show that HMRC is viewing the question of whether money was received via a route that "was within the intent of Parliament" is taxable, even if (inconveniently) the gateway condition of a third party being present is not met. This will be an argument eventually sorted out in Tribunal or Court (in perhaps 5 years time).

    In terms of the loan charge, the promoter may have a point for so long as the loan was made by the employer and remains with the employer. That is not that rare but not that common.

    Regardless of the tax position, you do need to have the obligation to repay the loan removed. HMRC has no influence on whether the lender can collect from you. HMRC however does make vague promises about "extracting" you from tax avoidance. They can't.

    Call us or Phil or both.

    Thank you so much for your reply. I have contacted your company and DSW for a consultation.

    I rang HMRC for the third time yesterday, speaking to a third call handler who told me I wouldn’t get a call back from someone more senior for 2 weeks.

    I explained everything to her again. I got extremely upset on the phone. I feel like HMRC have given me to fill a form in, but lots of the questions don’t make sense to me (especially the one about the loan being written off). The answer from my umbrella on that is They wouldn’t write it off. I’ve had to pay 3 payments of interest on the loan also. I know the umbrella are unlikely to have my best interests in mind. However, this is all frightening me because I don’t really understand what I’ve gotten myself in to and how can I pay tax on something and then be expected to pay the same money back?

    I have no idea what this umbrella company are capable of. Can they take me to Court off shore if I don’t make further interest payments?

    I’m upset because HMRC aren’t offering any guidance and I obviously don’t want to end up paying penalities or not complying but it’s so hard when I’m the one chasing them for answers and the call handlers themselves don’t appear trained to answer my questions.

    Yesterday, the call handler said that the best thing she thought I should do would be to fill in the settlement spreadsheet form as best I could and send it back with questions unanswered and with any other information I had (copy of loan agreement, emails from my agent telling me to use the umbrella company). Maybe with an email attached explaining what I had told her.

    I said I was really worried about filling in a form I didn’t understand as this is partly what led to this current mess I’m in.

    Would anyone else think that was a good idea to part complete the settlement form? and send it in?

    I’ve got the original contract from my umbrella company and it doesn’t mention TRUSTS’ or any third party, it’s an employer loan? It doesn’t have a date of when I have to payback but it reads like this can happen at any point.

    IÂ’m think I’m to wait until I have had these initial consultations before I send anything back.

    Obviously, I just want to do what I have to do and if that means I owe tax then I’ll get on with that. Presently, however, it’s really unclear and HMRC don’t have any answers for any of my questions, they can’t even tell me if I am definitely caught by the loan charge which I find really bizarre since they are meant to be the ones applying it. How do they expect your average person to deal with this. ?

    Flirting from feeling incredibly upset to thinking Im doing my best to resolve it. Im keepimg a record of all my efforts to work with HMRC which so far is a lot of action on my part.
    Last edited by ClareGunne; 8th December 2018 at 09:20.

  8. #8

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    Quote Originally Posted by webberg View Post
    We (WTT) and Phil Manley (DSW) both offer a free initial consultation and I recommend that you call one or both of us.

    It sounds as though you have a loan from an employer that they claim is outside the loan charge and outside the disguised remuneration rules.

    In terms of disguised remuneration, two recent GAAR opinions show that HMRC is viewing the question of whether money was received via a route that "was within the intent of Parliament" is taxable, even if (inconveniently) the gateway condition of a third party being present is not met. This will be an argument eventually sorted out in Tribunal or Court (in perhaps 5 years time).

    In terms of the loan charge, the promoter may have a point for so long as the loan was made by the employer and remains with the employer. That is not that rare but not that common.

    Regardless of the tax position, you do need to have the obligation to repay the loan removed. HMRC has no influence on whether the lender can collect from you. HMRC however does make vague promises about "extracting" you from tax avoidance. They can't.

    Call us or Phil or both.

    Thank you so much for your reply. I have contacted your company and DSW for a consultation.

    I rang HMRC for the third time yesterday, speaking to a third call handler who told me I wouldn’t get a call back from someone ‘more senior’ for 2 weeks.

    I explained everything to her again. I got extremely upset on the phone. I feel like HMRC have given me to fill a form in, but lots of the questions don’t make sense to me (especially the one about the loan being written off). The answer from my umbrella on that is They wouldn’t write it off. Ive had to pay 3 payments of interest on the loan also. I know the umbrella are unlikely to have my best interests in mind. However, this is all frightening me because I dont really understand what Ive gotten myself in to and how can I pay tax on something and then be expected to pay the same money back?

    I have no idea what this umbrella company are capable of. Can they take me to Court off shore if I dont make further interest payments?

    I’m upset because HMRC are T offering any guidance and I obviously don’t want to end up paying penalities or not complying but it’s so hard when I’m the one chasing them for answers and the call handlers themselves don’t appear trained to answer my questions.

    Yesterday, the call handler said that the best thing she thought I should do would be to fill in the settlement spreadsheet form as best I could and send it back with questions unanswered and with any other information I had (copy of loan agreement, emails from my agent telling me to use the umbrella company). Maybe with an email attached explaining what I had told her.

    I said I was really worried about filling in a form I didnÂ’t understand as this is partly what led to this current mess IÂ’m in.

    Would anyone else think that was a good idea to part complete the settlement form? and send it in?

    Ive got the original contract from my umbrella company and it doesnt mention TRUSTS or any third party, it’s an employer loan? It doesn’t have a date of when I have to payback but it reads like this can happen at any point.

    I think I’m to wait until I have had these initial consultations before I send anything back.

    Obviously, I just want to do what I have to do and if that means I owe tax then Ill get on with that. Presently, however, itÂ’s really unclear and HMRC dont have any answers for any of my questions, they cant even tell me if I am definitely caught by the loan charge which I find really bizarre since they are meant to be the ones applying it. How do they expect your average person to deal with this. ?

    Flirting from feeling incredibly upset to thinking Im doing my best to resolve it. Im keepimg a record of all my efforts to work with HMRC which so far is a lot of action on my part.
    Last edited by ClareGunne; 8th December 2018 at 09:30.

  9. #9

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    It is very frightening, especially when you do not know what a lot of the jargon means and the different bits of information you get from various different sources. Many of us were in a similar position to begin with. Personally, I found speaking to people in a similar situation very useful to enlighten me and to help calm my nerves. There are many of us on LCAG now and you can find information about them here:

    2019 Loan Charge Action Group (LCAG) - Loan Charge Action Group

    You're not alone in this situation and don't need to take on this battle alone either.

  10. #10

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    Quote Originally Posted by ClareGunne View Post
    Thank you so much for your reply. I have contacted your company and DSW for a consultation.

    I rang HMRC for the third time yesterday, speaking to a third call handler who told me I wouldn’t get a call back from someone ‘more senior’ for 2 weeks.

    I explained everything to her again. I got extremely upset on the phone. I feel like HMRC have given me to fill a form in, but lots of the questions don’t make sense to me (especially the one about the loan being written off). The answer from my umbrella on that is They wouldn’t write it off. Ive had to pay 3 payments of interest on the loan also. I know the umbrella are unlikely to have my best interests in mind. However, this is all frightening me because I dont really understand what Ive gotten myself in to and how can I pay tax on something and then be expected to pay the same money back?

    I have no idea what this umbrella company are capable of. Can they take me to Court off shore if I dont make further interest payments?

    I’m upset because HMRC are T offering any guidance and I obviously don’t want to end up paying penalities or not complying but it’s so hard when I’m the one chasing them for answers and the call handlers themselves don’t appear trained to answer my questions.

    Yesterday, the call handler said that the best thing she thought I should do would be to fill in the settlement spreadsheet form as best I could and send it back with questions unanswered and with any other information I had (copy of loan agreement, emails from my agent telling me to use the umbrella company). Maybe with an email attached explaining what I had told her.

    I said I was really worried about filling in a form I didnÂ’t understand as this is partly what led to this current mess IÂ’m in.

    Would anyone else think that was a good idea to part complete the settlement form? and send it in?

    Ive got the original contract from my umbrella company and it doesnt mention TRUSTS or any third party, it’s an employer loan? It doesn’t have a date of when I have to payback but it reads like this can happen at any point.

    I think I’m to wait until I have had these initial consultations before I send anything back.

    Obviously, I just want to do what I have to do and if that means I owe tax then Ill get on with that. Presently, however, itÂ’s really unclear and HMRC dont have any answers for any of my questions, they cant even tell me if I am definitely caught by the loan charge which I find really bizarre since they are meant to be the ones applying it. How do they expect your average person to deal with this. ?

    Flirting from feeling incredibly upset to thinking Im doing my best to resolve it. Im keepimg a record of all my efforts to work with HMRC which so far is a lot of action on my part.
    If you are paying interest on this loan to the loan provider, what rate of interest are you paying can you prove you made interest payments from your own bank etc - if you can show that and show that interest is at a rate that a person in the street could get on a loan I think you'd have an argument that the loan doesn't fall into the loan charge - did you talk this through with WTT or Phil.

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