Our friends at the Low Incomes Tax Reform Group (LITRG) have published some advice for people that may have unfinished loan charge issues. They identify four groups of people potentially needing advice:
Those with pre 9 December 2010 loans who might be due a refund/waiver of monies paid;
The loan charge initially had a long look-back period to 1999, however it now only applies to loans made after 9 December 2010. If you voluntarily settled an amount in relation to a pre-December 2010 loan then you may be due a refund.
Those who think they made ‘reasonable disclosure’ of their loans between 9 December 2010 and 5 April 2016;
The loan charge no longer applies to loans made between 9 December 2010 and 5 April 2016 where the user made reasonable disclosure of their scheme, but HMRC failed to take action. You may therefore be able to exclude an amount of loan charge income that was due to be included on the 2018-19 tax return.
Those who have not yet filed their 2018-19 tax return containing the loan charge;
There are a lot of people who have not yet filed their 2018-19 tax return containing the loan charge. LITRG outline the 5 main reasons for this, and offer some guidance on each. Importantly, if you do not submit a 2018-19 tax return soon, HMRC may well send you a ‘determination’ of the tax they think you owe. Even though this will be an estimated amount, it is legally enforceable until you submit the outstanding return.
Those who have filed their 2018-19 tax return but are now under enquiry.
HMRC are opening enquiries into taxpayers who filed a 2018/19 tax return, but who did not return the loan charge in that tax return or who included a different amount for the loan charge, in comparison to HMRC’s figures.
If you fall into any of these four categories, please read LITRG’s full article which provides you with some practical support and guidance on your options.