HMRC, Loan Charge Update - November 2019

HMRC have issued updated guidance for those individuals who are affected by the Contractor Loan legislation.

In September the Prime Minister revealed that an all party parliamentary group (APPG) would be reviewing the controversial loan charge legislation and the impact of HMRC’s handling of its enforcement.

The AAPG was initially timetabled to report its findings by mid November 2019, however this was derailed by the General Election and no firm timetable for reporting the outcome of the AAPG’s review has been set out.

This presents a difficult decision for those individuals who have not settled with HMRC and are faced with a decision on whether to include the loan charge on their 2018/19 tax returns, due for submission by 31 January 2020.

HMRC announced (very quietly) on 25 November 2019 that as matters stand those people who are caught by the loan charge legislation do need to enter full details on their tax returns. Even those who are going through the settlement opportunity and who have not reached the conclusion of their settlement.

HMRC’s view being that a person can amend their tax return for a further 12 months from 31 January 2020, and that should allow ample time for settlements to be finalised and to see the outcome of the APPG’s review.

It is therefore very important that those people who had outstanding loans at 5 April 2019 and who have not previously registered for Self Assessment do so as quickly as they can, so they can submit their 2018/19 Tax returns and avoid potential penalties.

At Forths Tax we specialise in assisting people with Self Assessment and the loan charge legislation, so please do not hesitate to contact us for immediate support.

To discuss your circumstances in confidence, call us on 0113 387 5670, email us at enquiries@forthsonline.co.uk or fill out an Enquiry Form.