involved in these schemes and HMRC is committed to intercepting them, with potentially implicated individuals ranging from accountants and financial advisers to those who originally designed the schemes.
The Financial Adviser reported that Ciniewicz made the pledge at the recent Treasury select committee evidence session. She went on to say that one of the ways the Revenue is doing this is by monitoring “PAYE or real time information that might indicate people are getting involved in avoidance” and writing to customers to nudge them away from avoidance if HMRC thinks they may be getting into that space. Ciniewicz was responding to questions from the committee about HMRC’s controversial loan charge. The loan charge applies where people received remuneration under the guise of being a loan, but the loan was never intended to be paid back. This was done to avoid tax and National Insurance deductions being made resulting in the tax office treating them as tax avoidance and cases are being investigated dating back as far as 1999. Although the loans were legal at the time, in the 2016 Budget the government confirmed it intended to ban the practice and have the tax repaid, and those affected by the policy were given an April 2019 deadline to settle or declare their tax bills and failing that would be levied the additional loan charge.
The controversial loan charge policy is currently subject to an independent review following months of pressure from MPs, taxpayers and campaigners. The CIPP reported on this back in September 2019.
HMRC has published guidance on how to manually calculate deductions due on the loan charge and explains the requirement to report the figures on an Earlier Year Update (EYU). It has also provided numerous publications surrounding the issue, including this helpful article which explains what the charge is, who it affects and how to settle the issue.
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Loan charge review will only be reported to new government 8 November 2019
In a letter sent via email from MP Jesse Norman to Sir Amyas Morse, it has been confirmed that the independent review into the Loan Charge will only be submitted to the new government that is formed following the general election on 12 December. Following the dissolution of Parliament on 6 November, Purdah rules apply which prevent certain government matters from being discussed prior to an election. The letter confirms that the review was originally due to conclude in mid- November, for presentation to the Chancellor of the Exchequer and the Financial Secretary to the Treasury accompanied by a set of recommendations. As no decisions can be made in the run up to an election, the findings will now be presented to the new government once it has been established. The Loan Charge is an anti-tax-avoidance measure that was introduced in the Finance Act 2016 and relates to disguised remuneration schemes. The government announced the review of the loan charge back in September 2019 as the Chancellor wanted to investigate the impact it would have on any affected individuals. There is guidance available for those that have used a disguised remuneration scheme or anyone who thinks that they might be affected by the loan charge. It is important to remember that even amidst political uncertainty due to the general election, the loan charge remains in operation and people should continue to meet their legal obligations. This includes reporting the loan charge on tax returns by 31 January 2020, if applicable.
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HMRC publishes draft legislation to implement the changes to the loan charge 22 January 2020
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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