Loan Charge – Last Chance
If you have received loans in place of earnings in the past and you or your advisor has made contact with HMRC before April 2019, and you’re working to get an agreement in place to repay tax and NI on your loan amounts, you currently have until 31st August to get an agreement finalised.
Perhaps you are waiting for the outcome of action against the Loan Charge to bear fruit, so have done nothing which means that the Loan Charge will come into effect. For many people this means that any tax due will be recalculated at a higher percentage because being chargeable in one tax year alone, it will take many people into the 45% tax band, with interest accruing until the balance is paid.
Have you paid a Loan Charge advisor for help, but as the deadline approaches they’ve gone quiet, or even worse, has told you that you are no longer engaged by them as a client? You need to take matters into your own hands then.
The Loan Charge is meant to be paid in a lump sum but that will be impossible for most people, plus you will be paying substantially more tax and interest and possibly penalties on top, making it even harder to meet this requirement. Whether this part will be deemed fair and just remains to be seen. However, the only thing that could happen is that the Loan Charge is set aside after a review, but that only means that the higher tax rate and penalties would be withdrawn, leaving the existing calculation and interest needing to be paid.
Time is running out and the choice really is pay now or pay more later, or you could of course put your hopes on the outcome of the promised fight at the O.K Corral between HMRC and a few outspoken tax advisors.
If you do have an advisor, get in touch just to make sure that contact with HMRC has been evidenced and if that cannot be provided by them, get in touch with HMRC personally by phone, letter and email, always keeping a record to be on the safe side.
If you are at the end of your tether with all this and cannot face dealing with HMRC, get in touch with me, I can’t make this go away for you, but I will act as a buffer between you and the officers of HM Revenue & Customs and make sure that any tax/NI that is levied is at least correct.