Draft FAQ - pre-2010 loans

[DealorNoDeal]

(Don't take this as gospel.)

The review means that the LC will now only apply to loans taken out on, or after, 9 Dec 2010.

Q1) Where does this leave open (protected) years prior to 2010?
A1) Although they will no longer be subject to the LC, they are still under dispute. HMRC has the option to take test cases to a tribunal to get a ruling on whether tax is due. If they were to win a case, they could use Follower Notices to catch everyone who used the same scheme.

Q2) What about closed (unprotected) years prior to 2010?
A2) These are now 100% in the clear.

Q3) What if I've paid APNs for pre-2010 years; will I get the money back?
A3) No. The review has no bearing on APNs. (APNs only ever applied to open years.)

Q4) What if I've already settled closed years ('voluntary restitution') prior to 2010?
A4) If the settlement was reached since March 2016, you should get a refund.

Q5) What about open pre-2010 years which have been settled?
A5) These will remain settled, and there will be no refund.

[DavidA]

I'm something of a newbie to this and this FAQ is useful. I've been working my way through the government website's section on the Loan Charge, which would be a good thing to link in the FAQ.

I don't really understand what open (protected) and closed (unprotected) means. How do I found out? When I spoke to the HMRC they used the same terms and I didn't understand. I'm not sure what an APN is.

In my particular case, I received disguised remuneration in the form of an Employee Benefit Trust in 2009. I settled and paid with 'voluntary resititution' last year, which I understand means that I gave them all the information and settled voluntarily. I think that means I'm due a refund but the HMRC are telling me they're still looking into it.

One thing that I found out was that the Independent loan charge review will need to be passed into law before anyone gets repaid, which is scheduled to be sometime this summer.

[DealorNoDeal]

Open (protected) means HMRC wrote to you, after you filed your tax return, opening an enquiry or raising an assessment. If the scheme was registered under 'DOTAS', they could also issue an APN for an open year, making you pay the tax immediately.

Closed (unprotected) means HMRC didn't open an enquiry or raise an assessment.

The term 'voluntary resititution' only applies to closed years. If you settled a closed year, you will be due a refund.

[DavidA]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:

I have reviewed the settlement calculation and noticed that the tax due relates to the tax year 2009-10 which we consider to be due under what we term as ‘voluntary restitution’. If you look at the PAYE input sheet on the calculation the column says ‘yes’ under the heading voluntary restitution, this relates to the PAYE tax due.

Do you understand what's happening there? Advice very much appreciated.

[PeterF]

Q2) What about closed (unprotected) years prior to 2010?
A2) These are now 100% in the clear.

100% clear from the current loan charge, right?

[ChimpMaster]

I'm something of a newbie to this and this FAQ is useful. I've been working my way through the government website's section on the Loan Charge, which would be a good thing to link in the FAQ.

I don't really understand what open (protected) and closed (unprotected) means. How do I found out? When I spoke to the HMRC they used the same terms and I didn't understand. I'm not sure what an APN is.

In my particular case, I received disguised remuneration in the form of an Employee Benefit Trust in 2009. I settled and paid with 'voluntary resititution' last year, which I understand means that I gave them all the information and settled voluntarily. I think that means I'm due a refund but the HMRC are telling me they're still looking into it.

One thing that I found out was that the Independent loan charge review will need to be passed into law before anyone gets repaid, which is scheduled to be sometime this summer.

For your loan in 2009, did HMRC ever send you an Enquiry or Discovery letter? If so, then the year is Open and HMRC can challenge you for the tax on it.

Seriously, speak with a tax advisor who can help you get the refund, if it is due. I am frankly shocked that you didn't have an advisor already, given that you went through settlement, not even knowing what open/closed years mean.

[DealorNoDeal]

100% clear from the current loan charge, right?

Yes, but also very difficult for HMRC to re-open.

[DealorNoDeal]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:



Do you understand what's happening there? Advice very much appreciated.

Maybe the person, who is now dealing with it, isn't aware of the "payment query" whatever that was.

I'd just leave them to it and keep your fingers crossed that you get a refund.

[lowpaidworker]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:



Do you understand what's happening there? Advice very much appreciated.

Interesting. EBTs basically lost at the Rangers case. If it was EBT I would imagine you had a DOTAS scheme number which allowed HMRC to issue an APN and collect post Rangers. Whilst APN does not mean settlement it means HMRC won the case and therefore you owe them and its not 'voluntary restitution'. Your 09/10 situation sounds like my Edge EBT. I paid the APN four years ago when Rangers lost in 2015 and to be honest I dont expect HMRC will pay me back. I'd be careful what some HMRC trolly dolly on the phone says to you about a refund or even a latter as HMRC are allowed to say whoops screwed up thats wrong.

TBH I dont think even the learned of HMRC front line staff have a scoobie whats going on right now based on a call I had a few days ago. If the money you paid is significant I'd seek advice per above and ask an Advisor if you really are due a refund. If its not sit tight and prey. I honestly doubt it if it was an EBT HMRC will pay anything back

[NeedTheSunshine]

Interesting. EBTs basically lost at the Rangers case. If it was EBT I would imagine you had a DOTAS scheme number which allowed HMRC to issue an APN and collect post Rangers. Whilst APN does not mean settlement it means HMRC won the case and therefore you owe them and its not 'voluntary restitution'. Your 09/10 situation sounds like my Edge EBT. I paid the APN four years ago when Rangers lost in 2015 and to be honest I dont expect HMRC will pay me back. I'd be careful what some HMRC trolly dolly on the phone says to you about a refund or even a latter as HMRC are allowed to say whoops screwed up thats wrong.

TBH I dont think even the learned of HMRC front line staff have a scoobie whats going on right now based on a call I had a few days ago. If the money you paid is significant I'd seek advice per above and ask an Advisor if you really are due a refund. If its not sit tight and prey. I honestly doubt it if it was an EBT HMRC will pay anything back

If I recall correctly, HMRC won but the tax liability was judged to be owed by the employer and not the employee. So not really a win. If HMRC win a case that they judge to be similar enough to your scenario then they would issue Follower Notices and not APNs.

Agree that you should get the person on the phone to confirm everything in writing.