Have You Fully Declared The Loan Charge?

Have you ever heard of a Loan Charge discovery letter? Well, HMRC is sending them out to a number of taxpayers still directly affected by the Loan Charge who receive remuneration by way of loans ...

HMRC believes there are in excess of 50,000 taxpayers based on actual cases identified. There are probably many more. These individuals received all or part of their remuneration by loans on or after the 6th of April 2016 and didn't repay them by the 5th of April 2019.

"HMRC gave an extended period to repay by the 30th of September 2020!"

Many taxpayers repaid their loans by using a different tax avoidance scheme, but soon discovered that didn't work either and HMRC issued a number of notices to them in an attempt to tackle this.

When no tax return was submitted for the tax year 2018/19, HMRC issued determination letters to the companies employing these taxpayers. If they did get a tax return, but didn't include the Loan Charge, discover letters are being sent.

Loan Charge discovery letters are usually sent when the tax return window has closed and HMRC are allowed to open an enquiry for up to four years after the submission deadline, six years if the tax loss was due to careless behaviour by the taxpayer, or even 20 years when the error was deliberate.

"Never ignore a letter from HMRC!"

A discovery assessment may not be accurate, or even valid, but until a settlement has been reached with HMRC, they will continue to pursue a taxpayer. It's always my advice to consult your tax advisor as soon as you receive a letter.

If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.