by Mark Taylor. Head of Tax Investigations and Dispute Resolution.
On 7 November 2017, HM Revenue & Customs (HMRC) published detailed settlement terms for taxpayers, whether employees, employers or self-employed contractors, who had entered into contractor/disguised remuneration loan arrangements. Often these loans were non-repayable and received from offshore employee benefit trusts.
Taxpayers were given until 31 May 2018 to register their intention to settle their tax affairs in relation to such loan arrangements. By 30 September 2018, taxpayers had to provide HMRC with all relevant information to enable settlement proposal figures to be issued.
Now that we are post the initial 31 May 2018 registration deadline it has been surprising to note that the registration deadline has effectively been extended without any formal HMRC announcement. This is because despite the initial 31 May 2018 registration deadline, taxpayers can still register so long as they do so and provide HMRC with all relevant information by 30 September 2018. Clearly, HMRC does not want to bite off the ‘disclosure hand’ that feeds it.
Those taxpayers who fail to register and settle their tax affairs, whom still have loans outstanding at 5 April 2019, face a ‘loan charge’ that will fall due for immediate payment on that date.
Some taxpayers will face tax exposure over several years, meaning those who do not have the savings or assets to make immediate payment will require time-to-pay arrangements to be negotiated with HMRC or face bankruptcy.
Buzzacott’s Head of Tax Investigations and Dispute Resolution, Mark Taylor comments:“If you are a user of such loan arrangements, with loan amounts outstanding, you should immediately seek advice from a specialist who can review your position and let you know where you stand”.
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