The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The Government released on 20 December 2019 a copy of the loan charge independent review report, containing some considerable changes to the loan charge.
The review, led by Sir Amyas Morse, was commissioned to look at the impact of the charge, which was introduced to tackle what the Treasury described as ‘disguised remuneration schemes’.
For a brief history of the loan charge, see the Loan charge guidance note and ‘Morse Code’ by David Graham in Taxation, 16 January 2020, 11.
The review, the Government response and the initial guidance can be found on GOV.UK.
Some of the fundamental amendments are listed below:
the loan charge will now only apply to outstanding loans made on, or after 9 December 2010, as opposed to any from 1999 onwards
the loan charge will not apply to outstanding loans made in any tax years before 6 April 2016 where the avoidance scheme use was fully disclosed to HMRC and HMRC did not take any action (see below for the meaning of ‘fully disclosed’)
affected individuals can opt to spread the amount of their outstanding loan balance (as at 5 April 2019, recalculated in line with the above changes) across three tax years (2018/19, 2019/20 and 2020/21), as long as it is paid in equal instalments for each tax year. This reduces the effect of stacking their outstanding loan balances into a single year, which artificially created an increased exposure to a higher rate of income tax (see below for further details)
HMRC will refund voluntary payments (‘voluntary restitution’) already made to prevent the loan charge arising and included in a settlement agreement reached since March 2016 for any tax years where the loan charge no longer applies (loans made before 9 December 2010) or loans made before 6 April 2016 and the avoidance scheme use was fully disclosed to HMRC and it did not take any action (see below for further details)
The changes have now been included in the Finance Act 2020,
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
This note offers guidance in respect of the administration of company tax returns. If a company or organisation is subject to corporation tax they will have to complete and file a company tax return for each accounting period. A company or organisation must, in the main, file a return even if they
Normal due dateIndividuals are required to pay any outstanding income tax and Class 4 National Insurance, Class 2 National Insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2021 for the 2019/20 tax year). From 6 April 2020, UK
Employee benefit trusts (EBTs) are commonly used to support employees’ share schemes and to provide other benefits to employees in the form of pensions and bonuses.Their use has been significantly affected by the introduction of the disguised remuneration rules. Although the statutory exclusions
Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.