ALERT! Last Chance Loan Settlement Errors ALERT! Last Chance Loan Settlement Errors
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  1. #1

    Nervous Newbie


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    Dec 2015
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    Default ALERT! Last Chance Loan Settlement Errors

    just a query to see if anyone is in the same current situation as myself. I've received a settlement offer from HMRC to settle loans from 4 tax years, the last in 2015 as I returned to limited company operation after that. I intend to settle to avoid the loan charge, and just to put it all behind me. They have even made an allowance of 10% against the gross taxable amount in each year as tax free expenses. Sounds ok so far.

    Here's the issue, I provided bank account details to them last year as requested and listed the total amounts received in each year (backed by bank statements), which not surprisingly included the nett salary I received. Years on, it would actually be quite hard to disentangle the individual payments. Yet in their calculations, they have taken the total funds received as a loan amount, even though I clearly stated what the figures meant, and my P60's identify the salary and tax paid in any year. I've pointed the error out, but I'm racing against time to get my acceptance letter back to them by the deadline they've set of 7th August.

    The error means that they are assessing tax on Gross Salary + Nett Salary + Loan Amount less the 10% expenses allowance, so pretty much counting my salary twice. This makes a difference of just under £4k in each full tax year.

    So my question is:
    - Has anyone else found the same issue?
    - If you're currently in settlement process like me, take a closer look at their calculations!

  2. #2

    Still gathering requirements...


    Join Date
    May 2020
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    Quote Originally Posted by ukcommando View Post
    just a query to see if anyone is in the same current situation as myself. I've received a settlement offer from HMRC to settle loans from 4 tax years, the last in 2015 as I returned to limited company operation after that. I intend to settle to avoid the loan charge, and just to put it all behind me. They have even made an allowance of 10% against the gross taxable amount in each year as tax free expenses. Sounds ok so far.

    Here's the issue, I provided bank account details to them last year as requested and listed the total amounts received in each year (backed by bank statements), which not surprisingly included the nett salary I received. Years on, it would actually be quite hard to disentangle the individual payments. Yet in their calculations, they have taken the total funds received as a loan amount, even though I clearly stated what the figures meant, and my P60's identify the salary and tax paid in any year. I've pointed the error out, but I'm racing against time to get my acceptance letter back to them by the deadline they've set of 7th August.

    The error means that they are assessing tax on Gross Salary + Nett Salary + Loan Amount less the 10% expenses allowance, so pretty much counting my salary twice. This makes a difference of just under £4k in each full tax year.

    So my question is:
    - Has anyone else found the same issue?
    - If you're currently in settlement process like me, take a closer look at their calculations!
    were your payments not split - salary /loan. all i have done in my case is declare the loan amount.



    All i di

  3. #3

    Still gathering requirements...


    Join Date
    Mar 2013
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    Quote Originally Posted by ukcommando View Post
    just a query to see if anyone is in the same current situation as myself. I've received a settlement offer from HMRC to settle loans from 4 tax years, the last in 2015 as I returned to limited company operation after that. I intend to settle to avoid the loan charge, and just to put it all behind me. They have even made an allowance of 10% against the gross taxable amount in each year as tax free expenses. Sounds ok so far.

    Here's the issue, I provided bank account details to them last year as requested and listed the total amounts received in each year (backed by bank statements), which not surprisingly included the nett salary I received. Years on, it would actually be quite hard to disentangle the individual payments. Yet in their calculations, they have taken the total funds received as a loan amount, even though I clearly stated what the figures meant, and my P60's identify the salary and tax paid in any year. I've pointed the error out, but I'm racing against time to get my acceptance letter back to them by the deadline they've set of 7th August.

    The error means that they are assessing tax on Gross Salary + Nett Salary + Loan Amount less the 10% expenses allowance, so pretty much counting my salary twice. This makes a difference of just under £4k in each full tax year.

    So my question is:
    - Has anyone else found the same issue?
    - If you're currently in settlement process like me, take a closer look at their calculations!
    I've written to HMRC asking for expenses to be deducted from loan amounts - still waiting for a reply.

    They have to treat everyone in the same way. If (or probable when) they refuse I'd like to show them some evidence that they have already allowed expenses to be deducted for some people.

    Are able to publish your evidence (personal details redacted of course)

    Thanks

  4. #4

    Nervous Newbie


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    Dec 2015
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    Quote Originally Posted by demby View Post
    I've written to HMRC asking for expenses to be deducted from loan amounts - still waiting for a reply.

    They have to treat everyone in the same way. If (or probable when) they refuse I'd like to show them some evidence that they have already allowed expenses to be deducted for some people.

    Are able to publish your evidence (personal details redacted of course)

    Thanks
    Glad the info was of use. In my case, I'd initially submitted expense claims in Excel spreadsheets detailing mileage at approved rates. When I first realised that the totals being requested from me were much higher than my own estimate, my first assumption was that they hadn't allowed the expense claims. I had to openly ask what the official HMRC policy was for expenses, then I was told that the policy was to allow the greater of £2500 or 10% against the taxable total as expenses. They also said they'd already done that in my case, which led me to realise the error in regards to allowing for my salary as detailed in my original post.

  5. #5

    Nervous Newbie


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    Dec 2015
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    Quote Originally Posted by DanJackiels View Post
    were your payments not split - salary /loan. all i have done in my case is declare the loan amount.



    All i di
    Yes, my payments were split, but I also received some reimbursed mileage expenses from the client, which tended to be roughly the same as salary amounts. All funds entered the same account, so were evident in bank statements. So, under pressure for a deadline at the time, it seemed easiest to me just to say that the totals included nett salary and expenses. Seems i didn't allow for the total absence of due diligence in actually reading what I'd told them!

    In any case, after writing a (very) firm but polite letter, which laid out in black and white the evidence of their error, I've now been told that it's been referred to a Senior Officer. I fail to see how they can deny the evidence, but if they do, then it may be time for an appropriate advisor.

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