TAX FREE LOANS – What is the 2019 loan charge?

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Affecting 50,000 taxpayers, the 2019 loan charge came into effect on Friday 5 April 2019

And what problems it has caused!  not least due to HMRC’s chaotic management of the cases wishing to settle up and the huge lack of their resources in trying to resolve 24,000 cases who have offered to pay back the tax penalty free, before 5th April.

Well it hasn’t happened, and I am personally still awaiting replies to letters sent to them in the middle of 2018!

So, you may still have a chance of settling if you revert to me quickly and hopefully resolve matters without a hefty penalty charge.

What is the 2019 loan charge?

The loan charge is a charge on unpaid loans that contractors received instead of salary payments to recoup what HMRC see as unpaid National Insurance and income tax from such schemes, which they call ‘disguised remuneration’.

A charge for those loans from up to 20 years ago will now be added on 5 April 2019 (unless contractors have come to a settlement arrangement with HMRC), with all outstanding loans added together and taxed as income in one year.

Many different groups have voiced their concerns over the fairness of the loan charge, including many MPs from different parties, and professional and tax accounting bodies, but the Treasury rejected it in a report published last Tuesday. Affecting 50,000 taxpayers, the 2019 loan charge came into effect on Friday 5 April

A charge for those loans from up to 20 years ago will now be added on 5 April 2019 (unless contractors have come to a settlement arrangement with HMRC), with all outstanding loans added together and taxed as income all in the one tax year.

Social workers and nurses are victims of this charge often through no fault of their own with a serious impact on their lives.

Not only has the impact of the loan charge been so severe that it’s been linked to a number of suicides this time next year many will be facing bankruptcy.

Call Lindsay on 07584 706664

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