⚠️ This is a news story and may not be up to date. You can find the date it was published under the title. Our Tax Guides feature the latest up-to-date tax information and guidance.
Loan charge to go ahead as planned – but there is still time to settle
Following the release of a report from HM Treasury on time limits in the tax system, it is now virtually certain that the loan charge will come in, as planned, in a week’s time. If you are affected, and haven’t done so already, you need to urgently consider contacting HMRC about settlement.
LITRG is reminding those affected by the loan charge that if you contact HMRC about ‘settlement’ before the 5th April 2019 date, then the loan charge will not apply (provided you subsequently then settle).
You may have been pinning hope on the review into the effects of changes to the offshore time limit rules, which also required a comparison with other time limits, including those relating to the loan charge. However the review has now been published and it is clear that the government are firm as to their policy relating to the loan charge. We are also aware that there is a debate on a motion about the loan charge scheduled for next week, but it is unlikely to change anything given the Government’s firm stance.
If you want to understand more about the settlement process then the first thing to do is to read our series of articles designed to help low-paid workers affected by the loan charge understand what is happening and what the options are. Although settlement may be the best option for many people, some people may be better off by allowing the loan charge to apply – we explain more about this in our three articles.
If you decide you want to settle, then the deadline for getting your information to HMRC is just a week away (5th April 2019), so you don’t have long. However, HMRC have recently published a loan charge briefing pack (available from the CIOT website) which contains useful practical information about how they will apply this deadline.
For example, they have confirmed that you must contact the settlement team and send through the necessary information by 5th April 2019 but that they will accept information that arrives later, provided the postmark is no later than 5th April 2019. Those who are already in the settlement process and who genuinely want to settle will not have the loan charge applied, even if they are missing a few pieces of paperwork. HMRC will get in touch with you if they need additional information.
We appreciate that contacting HMRC may seem like a daunting prospect, but the bottom line is that time is running out and you now need to consider your options so that you can take urgent action to start the settlement process if that is the best option for you.