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Tag Archives: Part 7A Loan Charge

April 2019 Loan Charge – Transfer of liability to employees

The most recent instalment in the continuing disguised remuneration discussion was published on Friday 1st December, in the form of a technical note discussing how HMRC would seek to transfer the April 2019 tax liability to employees who had received benefits from EBTs and other disguised remuneration schemes where Employers are unable to pay.

The note focuses on a particular three scenarios a liability might be transferred out to the employee/ultimate beneficiary under the scheme; 1. where the employer is/was offshore, 2. where the employer is no longer in existence and 3. where the employer simply cannot pay the PAYE arising from the April 2019 charge. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part Four: Early Settlement Continued

Part 4 of 4 – Should early settlement with HMRC now be considered? – continued

 

In this article, which is the conclusion to this series of short articles on the Part 7A Loan Charge which you can read here, we had hoped to be able to discuss details of the new HMRC settlement terms and to provide some comparison on how these differ from those previously offered before the sudden HMRC embargo.

However, at time of drafting this article, we still await release of the details of the new terms from HMRC which, after 6 weeks from their announcement is disappointing. Whilst due to the uncertainty created by this action, clients who were already in the process of settling, but did not manage to complete before the embargo, are necessarily concerned that they may be disadvantaged. We should perhaps not be surprised by the delays given HMRC believe there are around 80,000 scheme users who they acknowledge may not all be directly affected by Murray and so we assume a process of segregation is in progress. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part Three: Early Settlement

Part 3 of 4 – Should early settlement with HMRC now be considered?

 

In this week’s article, given the content of the previous two parts of this article which can be read here, and in the light of the decision for HMRC at the Supreme Court against Murray Group Holdings, we look at whether settling with HMRC should now be considered by clients who expect to receive an April 2019 loan charge.

We understand that HMRC are in the process of deciding how to apply the Murray Group Holdings case and we assume we shall find out shortly. However, it seems highly likely that Follower Notices will be issued to participants of most EBT/EFRBS arrangements (irrespective of any factual differences between the arrangements) and, even if there were differences, would anyone be willing, or rich enough, to risk a 50% penalty by challenging them. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part Two: Examples

Part 2 of 4 – Examples

 

Following on from Part One of this series of articles which can be read here, we look this week at some examples of how the legislation might be applied in practice.
Experience tells us that legislation is almost always more easily understood when looking through some examples of how the particular legislation is actually or could be applied in practice. What we endeavour to do in in this article is to present some scenarios that are likely to be common and could affect most companies and their employees who have participated in EBTs, EFRBS, and/or other such employee reward structures that might now fall within the Part 7A charge and be caught by the April 2019 charge. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part One

Part 1 of 4 – Background and The Charge

 

We have all known for some time now that come April 2019 most loans from a disguised remuneration’ structure or scheme, not repaid by this date, will become chargeable to tax. The charge to tax will be issued in the first instance to the employer, with whom the responsibility to deduct the PAYE lies, but, HMRC are also currently working on new rules which will allow them to pass any unpaid charge over to the individuals who benefitted if the employer is not able to pay or the employing company is no longer in existence. Read more

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