At least half a dozen times this week I have had people tell me that because paying the loan charge is less costly than the settlement figures they have, they will go with the loan charge "option" to settle their tax enquiries.
THIS IS ENTIRELY INCORRECT
If you do not reach settlement with HMRC by 30th September 2020, then HMRC will claim that the loan charge applies.
That does NOT absolve you from agreeing the final liability for those tax years where you received loans and HMRC has open enquiries.
Once you reach agreement with HMRC on those years, the tax paid on the loan charge is a credit against the final liability (which will include interest).
The loan charge is NOT an either/or option. If you pay the loan charge you will have to pay any difference between that and the final liability.
This has always been the case ever since the loan charge was first introduced. Looking back at HMRC communications I would say that these have always been clear and have said that the loan charge does NOT resolve open enquiries. I think therefore HMRC cannot be blamed for the misconception that has grown up around this point.
THIS IS ENTIRELY INCORRECT
If you do not reach settlement with HMRC by 30th September 2020, then HMRC will claim that the loan charge applies.
That does NOT absolve you from agreeing the final liability for those tax years where you received loans and HMRC has open enquiries.
Once you reach agreement with HMRC on those years, the tax paid on the loan charge is a credit against the final liability (which will include interest).
The loan charge is NOT an either/or option. If you pay the loan charge you will have to pay any difference between that and the final liability.
This has always been the case ever since the loan charge was first introduced. Looking back at HMRC communications I would say that these have always been clear and have said that the loan charge does NOT resolve open enquiries. I think therefore HMRC cannot be blamed for the misconception that has grown up around this point.
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