Loan Charge - sanity check

[VillageIdiotDan]

I'm so sorry, I'm impacted by all this and have buried my head in the sand. I don't deserve your time but if anyone has the patience to help me with answers it would really help me out - i've searched for answers for what I thought was very simple questions but can't seem to get it clear in my [increasingly-panicy] head!

Background: Loan arrangements limited to tax years 2009/10 & 2010/11. HMRC Compliance team assessed the amounts due as £10k and £1k respectively (excl. iinterest and surcharges) in 2014 at which point I appealled and postponed. Higher rate tax payer for tax year 2018/19.

1. Is it fair to assume on the basis HMRC assessed those years, they are "open"? Would it be silly to phone HMRC to ask which tax years are open?
2. Where is the HMRC form I must complete by 30th Sept 2019?
3. Do I understand correctly that the loan charge is a penalty that I must pay by 31-January-2020? but only if I do not settle? and that regardless the outstanding assessment would still be payable?
4. How do I calculate the loan charge?
5. How do I calculate what the settlement would be?: is it simply the tax they have already assessed, plus interest plus the 5%+5% surcharge that their assessment referenced?

I feel thankful that my exposure is relatively low and may opt to settle rather than have the burden hang over me any longer.

Thanks for any of your time,

ViD

[NotAllThere]

I don't deserve your time

Rubbish. That's what this part of the site is for.

[webberg]

I'm so sorry, I'm impacted by all this and have buried my head in the sand. I don't deserve your time but if anyone has the patience to help me with answers it would really help me out - i've searched for answers for what I thought was very simple questions but can't seem to get it clear in my [increasingly-panicy] head!

Background: Loan arrangements limited to tax years 2009/10 & 2010/11. HMRC Compliance team assessed the amounts due as £10k and £1k respectively (excl. iinterest and surcharges) in 2014 at which point I appealled and postponed. Higher rate tax payer for tax year 2018/19.

1. Is it fair to assume on the basis HMRC assessed those years, they are "open"? Yes. Would it be silly to phone HMRC to ask which tax years are open? No. Why would contacting HMRC be an issue. There is a widespread fallacy that putting yourself on HMRC's call list somehow increases your exposure. Completely untrue.
2. Where is the HMRC form I must complete by 30th Sept 2019? Report and account for your disguised remuneration loan charge - GOV.UK
3. Do I understand correctly that the loan charge is a penalty that I must pay by 31-January-2020? No it's not a penalty. It's a charge to tax on unpaid loans. The tax paid will eventually be a credit against your final liability. Best to think of it as a payment on account. but only if I do not settle? Correct. If you settle it is not due.
and that regardless the outstanding assessment would still be payable? Unless you have an argument that you are prepared to back in Tribunal that the LC should not apply, the only way to avoid it is to settle.
4. How do I calculate the loan charge? Add outstanding loans to your other 2018/19 income
5. How do I calculate what the settlement would be?: is it simply the tax they have already assessed, plus interest plus the 5%+5% surcharge that their assessment referenced? Not sure why you have a surcharge, but otherwise (and subject to a basic arithmetic check) you are correct.

I feel thankful that my exposure is relatively low and may opt to settle rather than have the burden hang over me any longer. You are too late to settle as the window for applying closed 5th April 2019. You may be able to get some form of informal settlement but you need to tell HMRC as soon as possible.

I would suggest that you withdraw your appeals, pay the tax and have HMRC confirm everything is closed.

Thanks for any of your time,

ViD

Please see above.

[stonehenge]

Please see above.

Great answer.

[VillageIdiotDan]

Webberg - thank you so much for the time and clarity in your reply. It's made a huge difference to the mental block I had, it's time to remove this from my list of concerns.

[VillageIdiotDan]

More as closure to the thread in case it was of interest to anyone else.

I called the Loan Charge helpline on 03000 599 110, they advised definitely no option to settle at this stage and that my next steps are to complete the form which is a hyperlink half way down the page Webberg provided (Report and account for your disguised remuneration loan charge - GOV.UK) by 30th September. Those same figures need to be captured in my 2018/19 self assessment (in section 8.1 from memory).


Please can I ask; has anybody successfully had the loan itself struck off as this now feels like a very naive liability that I have created. At this the only reassurance by AML was that as it's a trust, it's trustees have to act in the best interest of myself and making me pay that back would never be in my best interest! Anybody want to sell me some magic beans?!

[piebaps]

There's quite a bot about this on these pages Dan so pull up a chair, grab a brew and get stuck in.

You'll need to consider the agreement you signed and its terms and conditions and possibly take some legal advice. The one thing that is pretty constant however is that paying the lender a "write off fee" is simply giving more money to the leeches who got you into this mess in the first place.

[VillageIdiotDan]

There's quite a bot about this on these pages Dan so pull up a chair, grab a brew and get stuck in.

You'll need to consider the agreement you signed and its terms and conditions and possibly take some legal advice. The one thing that is pretty constant however is that paying the lender a "write off fee" is simply giving more money to the leeches who got you into this mess in the first place.

Hah, will do. I must admit, that's the one thing I didn't have a search for as it felt like running before I could walk!

[piebaps]

No need to explain yourself - also, while it may seem obvious, basing your decisions on anonymous postings on a web forum is not necessarily the wisest thing to do, so tread carefully and Good Luck.

[regron]

More as closure to the thread in case it was of interest to anyone else.

I called the Loan Charge helpline on 03000 599 110, they advised definitely no option to settle at this stage and that my next steps are to complete the form which is a hyperlink half way down the page Webberg provided (Report and account for your disguised remuneration loan charge - GOV.UK) by 30th September. Those same figures need to be captured in my 2018/19 self assessment (in section 8.1 from memory).


Please can I ask; has anybody successfully had the loan itself struck off as this now feels like a very naive liability that I have created. At this the only reassurance by AML was that as it's a trust, it's trustees have to act in the best interest of myself and making me pay that back would never be in my best interest! Anybody want to sell me some magic beans?!

I am assuming they are not allowing you to settle as you have 'officially' missed the deadline to settle. However, if you would like to consider settling, then I would contact your MP and advise him/her of this and ask them to contact HMRC on your behalf stating that exact fact, that you want to settle and they are preventing you from doing so. Pressure from your MP may just make them think twice. If not, you are nothing out and have your MP engaged on the subject as well. Whether he/she is for or against the loan charge is irrelevant in this case, as you are asking them to help you settle a tax liability.