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Non-resident when receiving loans

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    #11
    Originally posted by NotAllThere View Post
    Where are you currently based? It could depend on specific treaties, but the chances are if you're outside the EU you can't be touched. The debt remains, but it's a civil not a criminal matter. In the EU (+ a few other countries, like Switzerland) there are mechanisms for debt collection across countries.
    If I was living in a country where HMRC had little reach, I'd be tempted to keep my head down and ignore it.

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      #12
      Originally posted by NotAllThere View Post
      Where are you currently based? It could depend on specific treaties, but the chances are if you're outside the EU you can't be touched. The debt remains, but it's a civil not a criminal matter. In the EU (+ a few other countries, like Switzerland) there are mechanisms for debt collection across countries.
      I'm outside the EU - quite far south of it - sorry, I'm wary of saying much at all. But as was confirmed for me yesterday, my local tax agent's view is that HMRC are able to use my local tax authority to "recover tax". As I understand it, the LC is tax. Supposedly not a retrospective one, which is why I was hoping the non residency would be an out. I'm not resident or domiciled in the UK now, nor was I when I was doing the work in the 2000s. As BlasterBates says [thanks] the fact remains I was performing work at a UK company, and I'm going to assume HMRC can use that with whatever justification they like to impose the loan charge.

      So I believe my choices now are:
      1. Carry on ignoring the loan charge. As a non resident/non domiciled individual with no ties to the UK, am I obliged to complete a tax return for next year? Am I subject to UK law? What if I'd never got the letter? Can the HMRC recover the money? So many unknowns.
      2. Take HMRC to court on the basis of the EBT scheme or my non residency. Not an option cost wise.
      3. Join a group like Big Group to challenge EBT scheme in court. Not too keen on the length of time this might take.
      4. Contact HMRC, disclose loans and find out which of my two years are open/closed. Pay the loan charge.
      5. Contact HMRC and attempt to settle. Unlikely, but possible
      6. Find a tax advisor in the UK who specialises in non-residency to liaise with the HMRC on my behalf for 4 or 5
      Last edited by MrTickle; 26 August 2019, 22:25.

      Comment


        #13
        Originally posted by cwcsolutions View Post
        I am currently obtaining clearer guidance from HMRC about this issue for a couple of clients, because although everything seems to point to non resident status leading to a nil tax rate, this isn’t necessarily the case.

        Where a non resident is being paid by a U.K. employer and the duties are performed outside the U.K. normal rules will apply, but in the case of loan scheme providers, part of the income generated by contractors is taxed, albeit using the personal tax allowance, with the majority representing a debt which is raised under an agreement between the contractor and scheme provider,
        There is some guidance on loans paid in lieu of income, but the clearest indicator I think, comes from the fact that by paying a fee to the loan scheme provider for a service, assuming that the fees paid were for providing the contractor with the scheme, then HMRC at RDRM33020 states;

        ‘A taxable remittance also occurs where a service is provided in the UK for the benefit of the individual or any other relevant person and the consideration for that service is met using the individual’s foreign income or gains.’

        So, it’s the contract or agreement and fees paid that need to be looked at, with residency a secondary factor.
        Thanks - so in my case: UK employer paying IOM company, IOM paying me through 1) salary and 2) loans through EBT. The fees I paid were to both the IOM company and the loan trustee, deducted net before payment to me. If I'm understanding you correctly, it depends on whether those fees were for a service provided in the UK?

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          #14
          Originally posted by MrTickle View Post
          4. Contact HMRC, disclose loans and find out which of my two years are open/closed. Pay the loan charge. The loan charge applies to all years; it doesn't make any difference whether they are open or closed.
          5. Contact HMRC and attempt to settle. Unlikely, but possible It's probably too late to settle because the deadline for requesting settlement was 5 April.
          If you do end up paying the loan charge, at least you didn't have any other UK income so a portion of the loans should fall in the nil and lower rate tax bands. You shouldn't have to cough up 40 or 45% on the whole lot like some people will have to.
          Last edited by stonehenge; 27 August 2019, 07:04.

          Comment


            #15
            "If" the OP is down south as far as Oz, he might wish to think about the ATO and Hector being pretty cosy. Talk to an Oz tax adviser for peace of mind.
            Public Service Posting by the BBC - Bloggs Bulls**t Corp.
            Officially CUK certified - Thick as f**k.

            Comment


              #16
              Non resident fro tax purposes

              Originally posted by MrTickle View Post
              I'm outside the EU - quite far south of it - sorry, I'm wary of saying much at all. But as was confirmed for me yesterday, my local tax agent's view is that HMRC are able to use my local tax authority to "recover tax". As I understand it, the LC is tax. Supposedly not a retrospective one, which is why I was hoping the non residency would be an out. I'm not resident or domiciled in the UK now, nor was I when I was doing the work in the 2000s. As BlasterBates says [thanks] the fact remains I was performing work at a UK company, and I'm going to assume HMRC can use that with whatever justification they like to impose the loan charge.

              So I believe my choices now are:
              1. Carry on ignoring the loan charge. As a non resident/non domiciled individual with no ties to the UK, am I obliged to complete a tax return for next year? Am I subject to UK law? What if I'd never got the letter? Can the HMRC recover the money? So many unknowns.
              2. Take HMRC to court on the basis of the EBT scheme or my non residency. Not an option cost wise.
              3. Join a group like Big Group to challenge EBT scheme in court. Not too keen on the length of time this might take.
              4. Contact HMRC, disclose loans and find out which of my two years are open/closed. Pay the loan charge.
              5. Contact HMRC and attempt to settle. Unlikely, but possible
              6. Find a tax advisor in the UK who specialises in non-residency to liaise with the HMRC on my behalf for 4 or 5
              Mine case was similar as I moved out of UK (non EU country) but was being paid in the UK as the company I was working for was not able to pay me in that country. So my umbrella company was billing me in UK and paying me salary (plus loan) in UK account. When I came back to UK (after a gap of 3 years), I received a letter from HMRC to file an assessment because of an ongoing inquiry for previous year.

              My umbrella company (during these 3 years) filed for self assessment for these 3 years, declared all loans amounts on the assessments and declared me an non resident. I have provided my address in the country of residence and also my passport with date stamps to prove when I left. So that's my current status after response from HMRC.

              1.) I got back all taxes paid to HMRC for those years
              2.) All loan amounts paid during these years have been ignored as they have said my status was non-resident. Though these loan amounts are not huge and all of my expenses claimed are paid as loan so the balance amount of loan will be a meagre amount.
              3.) I still have to settle the taxes (with interest) for the ongoing inquiry for previous year before I left UK.

              Of recent, I have been in touch with HMRC directly and find that their response is quick and reasonable in terms of clarifying things. Now, nearly close to a settlement now.

              Hope it helps anyone else in the same shoes.

              Comment


                #17
                Originally posted by MrTickle View Post
                I'm outside the EU - quite far south of it - sorry, I'm wary of saying much at all. But as was confirmed for me yesterday, my local tax agent's view is that HMRC are able to use my local tax authority to "recover tax". As I understand it, the LC is tax. Supposedly not a retrospective one, which is why I was hoping the non residency would be an out. I'm not resident or domiciled in the UK now, nor was I when I was doing the work in the 2000s. As BlasterBates says [thanks] the fact remains I was performing work at a UK company, and I'm going to assume HMRC can use that with whatever justification they like to impose the loan charge.

                So I believe my choices now are:
                1. Carry on ignoring the loan charge. As a non resident/non domiciled individual with no ties to the UK, am I obliged to complete a tax return for next year? Am I subject to UK law? What if I'd never got the letter? Can the HMRC recover the money? So many unknowns.
                2. Take HMRC to court on the basis of the EBT scheme or my non residency. Not an option cost wise.
                3. Join a group like Big Group to challenge EBT scheme in court. Not too keen on the length of time this might take.
                4. Contact HMRC, disclose loans and find out which of my two years are open/closed. Pay the loan charge.
                5. Contact HMRC and attempt to settle. Unlikely, but possible
                6. Find a tax advisor in the UK who specialises in non-residency to liaise with the HMRC on my behalf for 4 or 5

                So I started on option 4. What an awful experience. The HMRC person the phone had zero, and I mean zero empathy. Normally I'd give someone like this the benefit of the doubt as they're just doing their job, but I got off the phone just feeling utterly demeaned and guilty. I've since resorted to email and that's been a little better, but I really just don't want to deal directly with HMRC any more.

                Can anyone recommend please an agent who they've engaged to deal with HMRC? May not be the right thing to ask in the forums, so mods please advise if so. But I'm looking for someone who naturally has experience in EBTs and the loan charge, but especially the rules around residency and domicile status. If so, please PM me.

                Thanks in advance

                Comment


                  #18
                  Originally posted by MrTickle View Post
                  So I started on option 4. What an awful experience. The HMRC person the phone had zero, and I mean zero empathy. Normally I'd give someone like this the benefit of the doubt as they're just doing their job, but I got off the phone just feeling utterly demeaned and guilty. I've since resorted to email and that's been a little better, but I really just don't want to deal directly with HMRC any more.

                  Can anyone recommend please an agent who they've engaged to deal with HMRC? May not be the right thing to ask in the forums, so mods please advise if so. But I'm looking for someone who naturally has experience in EBTs and the loan charge, but especially the rules around residency and domicile status. If so, please PM me.

                  Thanks in advance
                  A quick scan of this part of the forum will unearth the main agents but I would find it hard to recommend one. There are almost equal pluses and minuses to each.

                  I would also keep on eye on what is happening with the review. The scuttlebutt is that it is going to be in our favour and not HMRC's and that major changes are proposed. What they are and whether the government will implement them is another matter.

                  As for the poor bloody infantry on the phones. I have some sympathy with them, they are beleaguered and are having to put up with intolerable situations. If you follow @bulliedbyhmrc on twitter you will find a leak from the HMRC intranet that is an eye opener of what it is like to work there. Some employees are using foodbanks they are paid so little.

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