Richard Coombs, explains why it's not too late to act and the importance of taking professional tax advice given the amount of misinformation circulating on this subject.
"If you have a loan from an Employee Benefit Trust or a contractor scheme, then you will no doubt be aware that there is a looming tax charge which will bite on 5 April 2019. My previous articles have explained how the charge works and what you can do about it, so I will not repeat the detail here, but a lot was made about HMRC’s apparent deadline of 31 May to register your interest in settling your tax affairs. Many feared that if you missed this deadline then you could not guarantee that you would be able to settle your tax affairs in advance of the 5 April 2019 loan charge.
As it turns out, it seems that this was somewhat of a false deadline as HMRC have since confirmed that provided that they receive all the information they need to prepare settlement calculations by 30 September 2018 then you should still be able to settle in time. To be fair to HMRC, 30 September 2018 has always been there as a long-stop deadline, but it did previously appear that if you missed the 31 May registration deadline then you had missed the boat. This is not the case and therefore if you want to discuss the possibility of settling your tax affairs in respect of historic loans from EBTs or contractor schemes then there is still time to do so. We have taken a lot of calls (from contractors especially) who are unsure what to do and we continue to be happy to take such calls. We never charge for an initial chat and so would encourage anyone who is unsure of their position to get in touch.
What has been worrying over the last few months is the number of contractor providers who appear to be leaving their clients to deal with the situation themselves. We have heard numerous stories of the provider simply not taking calls or referring their clients to another (often related) firm who then tries to sell them another scheme to avoid the charge. The numerous contractor online chat-rooms are also full of mis-information, often from well-meaning contributors, but who are not perhaps as up to speed on the legislation.
We have also come across a number of structures where the loan provider has indicated to the contractor that the April 2019 loan charge will not apply, without really giving any justification for this stance. The issue with this is that, as the contractor, it is your responsibility to notify HMRC of any loans which might be caught. If you fail to do so you could be liable to a penalty. We would therefore always urge caution and suggest that anyone with such loans speaks to a tax professional with expertise in this area. We are always happy to help so please feel free to contact us."
Richard Coombs email@example.com