The Loan Charge

This article is now out of date

The contents of this article do not accurately reflect the current position, and thus cannot be relied on.

We no longer give legal advice in respect of the loan charge, however, if you are in financial difficulty as a result of a loan charge and seek debt advicce, please contact us via this form.

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.

Call us on 0113 218 5423 to discuss loan charges

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: secretariat@loanchargereview.org.uk. 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.

Leave a message with our Commercial team for more information

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

Client feedback

I dealt with Hannah, one of their specialist CHC solicitors. I found her professional, knowledgeable and reassuring. Winston Solicitors kept within their quoted fee.

Martin

We used Winston recently for conveyancing, we are a slightly unorthodox and there were changes along the way. They were accommodating and patient with excellent regular comms. Recommended

Lee

Great service and felt like I was kept in the loop at all times. Thank you all

Wala

We used Winston Solicitors (Olivia Cooke and Amanda Lester) to both buy and sell a property. They were both incredibly proactive, easy to contact and made the whole process very easy. They have a fantastic online portal which tracks the progress of your sale/purchase so you always know what’s coming next and what is still to do. I would recommend using Winston Solicitors to everyone and will definitely use them again in the future.

Kate a

I chose Winston Solicitors to deal with my wife's estate on the recommendation of a family member. I was very satisfied with the friendly attitude of the team. Everything was dealt with as quickly as possible bearing in mind that some documents needed to dealt with by a family member in America. i was kept informed of progress every step of the way. Wonderful service.

David

Michelle and Aishah were both very professional and helpful. This wasn't a straightforward conveyance but they had the relevant expertise to complete the sale without a problem.

Caroline

I used Winston Solicitors to sell our house and they were brilliant. Amr dealt with all the paperwork quickly and kept us updated the whole time. They made the entire sale smooth and stress free. We would definitely use them again and recommending them to family and friends.

Mohammed

I have worked with Winston Solicitors on a number of different legal matters, most recently conveyancing. On each occasion, they have been professional, friendly and helpful throughout. Whether providing advice, responding to queries, or simply keeping me updated on progress, their communication has always been excellent.I would have no hesitation in recommending Winston Solicitors and would be very happy to use their services again in the future.

Anonymous