Loan Charge review - round #2 Loan Charge review - round #2 - Page 2
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  1. #11

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    Quote Originally Posted by lowpaidworker View Post
    Anyone have any idea on what the possible outcomes of the review might be...

    e.g. say Loan Charge becomes prospective. So any loan prior to 2017 is not caught by LC. (Hopefully not too many people still using these schemes but given the amount of money it made Promoters I would bet there are some )

    So prior 2017 HMRC will be back to one by one defeating these schemes. This is expensive and long winded. Would they say be more likely to offer a single clean up exercise that was mentioned back last year at the lords committee by the very poster of this article ? Do we think this is now a feasible option ?
    _______________

    I suspect the review will be by Govt. rather than fully independent (hope I am wrong) but even if it is I think this time it wont be a whitewash but rather compromise / changes will be made to satisfy MPs. There is little chance LC is made prospective from announcement (2016) or effect (2017), also little chance of tax rate been reduced to 10-20% for individuals or that LC is dropped altogether. Even the HOL report did not recommend any of this. Treasury senior civil servants and HMRC will resist that very strongly.

    Changes could include removing closed years or applying LC from the point the DR legislation was effective (April 6 2011) as this is the point HMRC started communicating heavily that these schemes did not work.
    Closed years is the most obvious compromise as many MPs, HOL, Treasury Select Committee and tax organisations (and former HMRC) have objected to this as it breaches time limits laid down by parliament but even then the devil will be in the detail. Will you have to prove you disclosed all info for closed years at the time to be out of scope? What does disclosure mean? How can you prove this for very old years (i.e. 2000, 2006)? Who has tax returns / tax records from 10-20 years ago to prove this cause HMRC certainly do not.
    Last edited by wilks; 6th September 2019 at 11:27.

  2. #12

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    Quote Originally Posted by bosleyrog View Post
    I am a number 6 on Webberg's post
    I have signed and had returned my settlement. I was not allowed a payment plan and was given 60 days from the date of signature. The 60days are up on 17th Sept.
    Any advice on what I should do? Stall and await the review or is it too late?
    You've signed a legal document. How risk averse are you?

  3. #13

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    Quote Originally Posted by bosleyrog View Post
    I am a number 6 on Webberg's post
    I have signed and had returned my settlement. I was not allowed a payment plan and was given 60 days from the date of signature. The 60days are up on 17th Sept.
    Any advice on what I should do? Stall and await the review or is it too late?
    Contact HMRC and ask them this questions.

    Or assume that the settlement you signed and has been accepted, is valid and make the payments.

    Doing anything else in the absence of hard evidence is reckless (in my opinion).
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  4. #14

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    Quote Originally Posted by Paralytic View Post
    You've signed a legal document. How risk averse are you?
    TBH I just wanted the whole thing to go away as quickly as possible, however if there is a chance of any changes than I am willing to try and string it along for little while.
    We had a company EBT back in 2004, out of my "loan" amount, I only actually received 50% of my loan value. The rest was left in the company (not by my choice!), which went into administration a number of years later with me and a couple of other directors being creditors. We were not share holders and the EBT had been set up as a "bonus". When we were made aware of the LC and our potential liability we tried to settle.
    The loan charge would be applicable on the whole sum of the loan, I thought by explaining this to HMRC they would have settled on the actual money I had from the loan, but of course they want the tax on the whole sum. Effectively my settlement is for the whole amount I had from the loan back in 2004!!

  5. #15

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    Quote Originally Posted by wilks View Post
    Will you have to prove you disclosed all info for closed years at the time to be out of scope?
    It's been said before, but there is a clear definition of "closed years" by HMRC themselves. That is what it should mean - not any old definition dreamt up by Jesse Norman.

  6. #16

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    Quote Originally Posted by bosleyrog View Post
    I am a number 6 on Webberg's post
    I have signed and had returned my settlement. I was not allowed a payment plan and was given 60 days from the date of signature. The 60days are up on 17th Sept.
    Any advice on what I should do? Stall and await the review or is it too late?
    I'm also number 6 and my wife is no.6 but has paid in full.....

    Having just seen this on LCAG's twitter ;
    Loan Charge Action Group [LCAG] (@LCAG_2019) on Twitter

    I'm inclined to immediately write to HMRC to state (again) that I signed the contract under duress and I cannot afford to pay pending the outcome of the review (which is effectively true).

    On the contract counter signature I note that there is no actually place for them to sign?? Is this why there are no fully executed contracts from HMRC?

    Finally, I note LCAG have a template letter to send to Jon Thompson (permanent secretary to HMRC) I dont want to share it here but I suggest you speak to LCAG and get a copy straight away.

    To be clear I dont think my liability is going away (all open years) but I do think there is a possibility of better terms and I'm happy for this to go into the long grass with interest paused whilst I re-group financially.

  7. #17

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    Quote Originally Posted by wilks View Post
    _______________

    I suspect the review will be by Govt. rather than fully independent (hope I am wrong) but even if it is I think this time it wont be a whitewash but rather compromise / changes will be made to satisfy MPs. There is little chance LC is made prospective from announcement (2016) or effect (2017), also little chance of tax rate been reduced to 10-20% for individuals or that LC is dropped altogether. Even the HOL report did not recommend any of this. Treasury senior civil servants and HMRC will resist that very strongly.

    Changes could include removing closed years or applying LC from the point the DR legislation was effective (April 6 2011) as this is the point HMRC started communicating heavily that these schemes did not work.
    Closed years is the most obvious compromise as many MPs, HOL, Treasury Select Committee and tax organisations (and former HMRC) have objected to this as it breaches time limits laid down by parliament but even then the devil will be in the detail. Will you have to prove you disclosed all info for closed years at the time to be out of scope? What does disclosure mean? How can you prove this for very old years (i.e. 2000, 2006)? Who has tax returns / tax records from 10-20 years ago to prove this cause HMRC certainly do not.
    So maybe still retrospective for Open years, closed for closed. Not sure the legality of this could stand. How can someone with a closed year on same scheme as some open not pay and the other does. Sounds rudely unjust bearing in mind HMRC are extremely haphazard raising open cases? I can't see how this could stand up in court but then I'm no lawyer.

    Or prospective from April 2011. Again here how does that work. HMRC never wrote to me about my affairs for 6 years. How can one use a date or something posted in a spotlight. Only people read these things are Tax Advisors and all they did is figure out how to work round it and then baloney people like me saying my new scheme was perfectly acceptable. Bottom line is the end of the food chain pays again. Why should someone who used a scheme in 2010 be exempt yet someone in 2011 get hit.

    Am not disagreeing with your comment btw but pondering what all the potential outcomes of the review will chuck up so that most of the people impacted can start to assess the various risks. This post is a perfect for that.

    I think if this review is thorough then LC should be binned to respect tax payers rights to defend themselves. If the review includes any sort of investigation into HMRC powers and behaviour from what I have seen they will be burnt massively. We then end up back with each Scheme being challenged. Not that that would necessarily help.

    I've also seen amounts posted by HMRC of the LC tax liability to be grossly overstated. 3b then 2b... and then actually 600m.

    I think this review has created a mess and a problem for HMRC, and if the review is proper highlight how unregulated they have been.

    As for the outcome I have no scoobie doo

  8. #18

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    Timing could have been better, received my acceptance letter on the 3rd Sept, looks like I'm locked in to settling now

  9. #19

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    Quote Originally Posted by bosleyrog View Post
    I am a number 6 on Webberg's post
    I have signed and had returned my settlement. I was not allowed a payment plan and was given 60 days from the date of signature. The 60days are up on 17th Sept.
    Any advice on what I should do? Stall and await the review or is it too late?


    I read on Twitter HMRC are suspending settlements before they get clarity. I also read IF the LC was cancelled, people who had settled can't get their money back as is "voluntary" (BS for me as you are pretty much settle under duress - which is legally not binding). I would seek advise.

    For a lot of people even they got their settlement calc they can't afford to settle so is a lose lose situation for them. I personally have been on Twitter for the last month and it had found some info informative (might not be accurate) but more refreshing than reading just here as there are a lot of momentum going on with MPs and Groups lobbying and revoking this retrospective legislation.

    Loan Charge APPG on Twitter: "BREAKING NEWS: An @hmrcgovuk official has replied to an individual’s email CONFIRMING suspension of settlement in light of the #LoanChargeReview announced by @BorisJohnson

    HMRC are now obliged to agree the same for ALL facing the #LoanCharge. So all settlements must be on hold.… https://t.co/HLM1rS8T1t"
    Last edited by philinlondon; 6th September 2019 at 14:52.

  10. #20

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    Quote Originally Posted by RickG View Post
    It's been said before, but there is a clear definition of "closed years" by HMRC themselves. That is what it should mean - not any old definition dreamt up by Jesse Norman.
    There is potentially a big difference between a closed year and the situation the HoL had in mind, which is where FULL disclosure was made but HMRC failed to act.

    A closed year is HMRC missing the enquiry (sec 9a) deadline or discovery (4 years- se 29) deadline.
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