Skip to main content

The Loan Charge

The Loan Charge – Do not put your head in the sand

If you were one of the estimated 24,000 people induced into entering into a scheme to avoid tax by utilising a loan scheme who haven’t yet settled your tax liabilities you should be aware of the subject matter of this article.

In essence if you were paid by loan at any time after 6 April 1999 and the loan wasn’t repaid by 5 April 2019 the loan charge will be levied and you will have to pay it. This is provided your employer (at the time) hasn’t repaid it.

The Loan Charge will be levied in addition to any existing tax liability and interest and you will be required to pay it by 31 January 2020.

That is the LAW however…

If you haven’t yet resolved your position with HMRC you will have been heartened that the Government has opened the 2019 “Loan Charge Review” headed by Sir Amyas Morse.

That review is expected to report by mid-November 2019.

If you have evidence you want the review to take into account it is interested in hearing from a wide range of people and understanding their different perspectives. If you would like to provide evidence then please email it to: @email. before 30 September 2019.

The latest from HMRC

“If you provided all the required information by 5 April 2019 and are waiting to finalise your settlement with HMRC

You can continue to finalise your settlement with HMRC if you wish to do so, which will allow you certainty in your tax affairs.

HMRC recognise that you may want to wait for the government’s response to the review before finalising your settlement.

If you decide to wait interest will not accrue provided HMRC have all the information they require from you to finalise your settlement and you will not need to complete the additional information return by 30 September 2019.

HMRC will update their guidance setting out details of what the next steps are for you if your tax position changes as a result of the government response to the review.

If you are not settling your disguised remuneration scheme use

You will still need to complete an additional information return by 30 September 2019. You can find further information about the additional information requirements on GOV.UK”

This document should be completed and submitted within the next 7 days despite the review-taking place.

The advice provided by HMRC also closes on a sobering note:

“Accelerated Payment Notices, compliance activity and litigation

HMRC is committed to tackling the use of disguised remuneration schemes. The review of the loan charge does not affect routine HMRC compliance activity related to disguised remuneration schemes, including Accelerated Payment Notices and ongoing litigation.

Unless you are in the process of settling, statutory late payment interest will continue to accrue on any unpaid tax during this period. You can stop this accruing by making a payment on account.”

This is a hiatus rather than the end.

Should you wish to discuss how to deal with a tax liability of this nature please either email @email or call me on 0113 218 5423.

Client feedback

Very happy with Winstons, Amr was a tremendous help guiding me and my partner through our first house pruchase. He ws thorough and prompt at all times.
Charlotte a
Very attentive service and excellent communication throughout the selling process. Would firmly recommendation and will be using again for my purchase. Thank you!
Anonymous
Great experience with Winston Solicitors. Communication was clear and consistent, and the work was completed quickly and efficiently. Overall, a smooth and professional service
Subiea
I am very pleased with the service I received from Winstons, this is the second time I have dealt with them for conveyancing services and on both occasions Leasa was incredibly thorough and reassured me every step of the way. When other parties failed to deliver, Leasa ensured things were chased up and delivered/received with accuracy. I would highly recommend and will be sure to use Winston's again for any future property purchases
Charis
Would highly recommend Winston's.Both Leasa and Julie were extremely professional and we recieved regular email and direct call updates.In the middle of an extremely challenging chain, they went above and beyond and became intermediary's liasing with everyone else in order to get the conveyancing completed on time.Thanks again for a great service.Regards
Richard
My conveyancer Samantha and her associate Michelle kept me informed of the progress of my sale throughout the transaction. It was of benefit to me that the Winston office was local with plenty of parking. I would recommend them for any conveyancing
Ms H
Winston’s acted for us with our house sale and onward purchase. They have been excellent from start to finish. Leasa is extremely quick to respond to emails and more than happy to answer any questions. The online system is very efficient and helps keep you up to date with progress of the sale/purchase. Leasa and her team made the whole process so much less stressful than it could’ve been and we can’t thank them enough. We wouldn’t hesitate to recommend them.
Lucy
Teresa and Judith assisted with my recent divorce and i cannot rate them highly enough, i was talked through every aspect and everything was explained in full and i was kept fully updated and imformed of everything that i needed to do and when it was required for. Their patience when i was working away and understanding was especially appreciated.Once that was all complete Amanda and Samantha and the convayensing team sorted the transfer of the house and the paperwork associated with that.I would highly recommend them and thier company for any legal issues you have and would use thier services again without hesitation.
Richard J
Contact David