The loan charge is likely to apply to beneficiaries of EBTs, EFRBS and individual contractors or anyone who received loans or owe a debt to a trust-based tax-avoidance structure.
If settlement negotiations weren’t entered into with HMRC before 5 April, either the individual who received the loan, or their employer, must report and pay the tax resulting from the April loan charge.
Failure to report and pay the tax due will result in additional penalties and interest being added which will increase the eventual liability.
- 2019 loan charge on outstanding loans
- Serial Avoiders legislation and associated administration
- HMRC Naming and Shaming announcements
- Further accrued interest and penalties
- Increased IHT charges
- HMRC’s ever hardening stance on settlements
If you don’t address the loan charge reporting requirements or reach a settlement with HMRC they will incur additional interest and penalties as time passes.
There is limited time within which to act. We would recommend contacting us as soon as possible if you or your clients might be impacted by the April 2019 loan charge.
How we can help
It’s vital that you establish who is responsible for accounting for the loan charge i.e. your employer or you as an employee (or self-employed individual) – we can help with this by:
- Submitting loan information via the government gateway
- Pay as you earn (“PAYE”) and Real Time Information (“RTI”) advice for companies
- Advice concerning the application of any resulting s.222 / s.223 ITEPA 2003 charge for companies
- Self-Assessment reporting and calculation of the estimated tax due for individuals
- Inheritance Tax advice concerning any potential ‘exit charges’ which may arise if / when loans are written off
- Negotiating time to pay arrangements with HMRC
- Contract settlement with HMRC
If you decide you want to reach settlement with HMRC in relation to any trust based tax arrangements get in touch today to discuss how we can assist. We offer a free and confidential exploratory conversation. Let us take away the stress of dealing with HMRC when it comes to settlements and reporting under the loan charge.
