Following yesterday’s announcement that the report into the Loan Charge has been delayed, concern has been raised that the results will not be published until after 31 January 2020. This charge relates to individuals who entered into disguised remuneration schemes, such as the Contractor Loan scheme.
This date of 31 January 2020 is important as it is the Self Assessment Tax Return deadline.
For those clients currently engaged in the Settlement process with HMRC, it could mean that they have to report the loan benefit on their 2019 Tax Returns and pay the tax due on 31 January 2020, if they have not reached an agreement.
Many individuals have been waiting for the Report before making a decision about settling with HMRC and so could be in a position where they make the declaration on their Tax Return, pay the tax and then have to amend the form subsequently.
If the loan charge is not reported on the Tax Return, it could raise the issue of penalties. Would a non-declaration be deemed ‘deliberate’, giving a maximum penalty of 70% of the lost tax?
If you are currently in negotiations with HMRC regarding the loan charge and want some advice, please contact us.