• Where the reason for the late election does not warrant admission of the election under the general approach, it will still be considered by HMRC in assessing the circumstances as a whole • The extent to which the election is late • The consequences for the individual if the election is refused • Any particularly unusual features Individuals who wish to make a late election to spread their outstanding disguised remuneration loan balance over three tax years will be required to complete the loan charge reporting form, and they should select the option to spread their outstanding disguised remuneration loan balance over three tax years on the election page of the form. Where the form is completed correctly and submitted on, or prior to, 31 December 2020, HMRC will automatically accept the submission as having made a valid election, with no requirement to provide further information or the reason for the late election. This will allow individuals to include a third of their outstanding disguised remuneration loan balance on their 2018-19 Self-Assessment tax return. Anyone who did not make an election on or before 30 September 2020, who then makes a late election on or before 31 December 2020, can choose to include a third of their outstanding remuneration loan balance as income – this must be marked as provisional. A valid election creates a statutory obligation for an individual to report a third of their outstanding disguised remuneration loan balance in each of their Self-Assessment rax returns for 2018-19. 2019-20 and 2020-21, and to pay the income tax arising. If a late election is submitted on or before 31 December 2020, it cannot be revoked, and the individual will be liable to report and pay a third of their outstanding disguised remuneration loan balance in the tax years 2018-19. 2019-20 and 2020-21.
Individuals wishing to make a late election after 31 December 2020 should complete a paper version of the loan charge reporting form, making an election, and providing the following:
• The date they submitted their 2018-19 Self-Assessment tax return • The reason for the late election
They should email the completed form to: ca.loancharge@hmrc.gov.uk.
“Late loan charge election” should be included as the subject line of the email, and HMRC will then consider whether their election can be accepted and will respond with the outcome. Until it has been confirmed by an officer of HMRC that the late election has been accepted, then the individual is liable to report and pay the full outstanding disguised remuneration loan balance in their Self-Assessment tax return for 2018-19. Anyone considering making a late election should consider the accuracy of their tax return, the latest date by which they can amend their 2018-19 Self- Assessment tax return and the penalties that can be charged for filing an inaccurate return.
Guidance on late elections is available, or the loan charge helpline can be contacted via telephone at 03000 599110.
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HMRC webinars: off-payroll working 24 November 2020
HMRC is running a series of webinars to provide information, guidance and tips on the off-payroll working rules that will change from April 2021.
Off-payroll working rules from April 2021
This webinar provides an update on the amendments to the off-payroll working rules from April 2021 for both the public sector and for medium and large sized organisations.
Register for the webinar here. There are a number of them being held but HMRC advises that there are a limited number of spaces, so are encouraging anyone interested to sign up now to reserve their place.
Off-payroll working rules from April 2021: Contractors
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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