HMRC extend deadline for settling to avoid the 2019 Loan Charge
05 June 2018
05 June 2018
‘To start settling your tax affairs, you should register your interest with HMRC as soon as possible and provide all of the required information by 30 September 2018.’
Therefore, if you have ever received remuneration from your employment in the form of loans (often called an Employment Benefit Trust scheme), there is still time to settle.
Aspire Comment
In most cases, it is cheaper to settle prior to the loan charge. You cannot avoid the loan charge as there is a requirement in the Finance Act 2018 to disclose any loans made on or after 5th April 1999 that have any amount outstanding if the loan would be subject to the loan charge on 6th April 2019. The loan charge information must be provided after 5th April 2019 and before 1st October 2019 to HMRC.
If you fail to provide information within that time period, you will be subject to a £300 penalty. If the failure continues after the date on which after the initial penalty is imposed, you are liable to further penalties of £60 per day up to a maximum of 90 days. Therefore, if you wanted to keep quiet about the outstanding tax years and not disclose the loan details to HMRC in accordance with the loan charge, you are risking at least a further £5,700 worth of penalties plus accrued interest on the outstanding loan amounts.
To view the updated guidance click here.