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[News] Loan Charge - another tax avoidance scheme



LlcoolJ

LlcoolJ

Mama said knock you out.
Oct 14, 2009
12,982
Sheffield
spongy said:
I've only read the first page but I have to ask why its backdated?

What they did was legal at the time.... HMRC closed the loophole so from there on in tax is payable. Backdating it seems such a shitty thing to do.
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You have to ask but your question has already been debated/answered at length mate!
 




W

warmleyseagull

Well-known member
Apr 17, 2011
4,219
Beaminster, Dorset
Baldseagull said:
If you have a limited company and take dividends, you can only do so from profits, which will have corporation tax applied, at 19% (until April this year when it dropped 1%) and after your personal dividend allowance of £2000, you will pay dividend tax at 7.5% basic rate, and 32.5% higher rate on that.
Any tax savings are marginal, it isn't a massive tax avoidance method, but can be slightly more efficient, not really deserving of being left unsupported.
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People write books on this stuff.

You are omitting the cost of NICs. Even with those, it is true that the saving may not be as massive as it was, but if that is the case why do so many shareholder working directors pay themselves no or very low salaries? Morally, it seems to me that shareholder working directors should pay themselves a 'living' salary (up to £30k, say) under PAYE and dividend the rest as return on their capital employed. If they did that, would have been entitled to all Rishi's goodies.
 


Hu_Camus

Hu_Camus

New member
Jan 27, 2019
502
FatSuperman said:
I see this issue in the same light as the Lewis Hamilton 'dodging' tax debate.

These loan charge schemes were clearly nonsense, but HMRC knew about them for what sounds like a long time and did nothing. They then closed the loophole (good!) and backdated the charge. That is surely unacceptable? Perhaps we can all feel a bit smug about it, now those morally bankrupt people can't legally reduce their tax (obviously enabled by accountants / promoters), but why the hell should HMRC be able to back date something?
And we lap it up.
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The point I made is still valid I believe.
"Closing a loophole" written by, and understood to be 'loophole', is so near to be 'evasion', that backdating could, and should in many instances (imho), be replaced by sewing mailbags and an oat diet, suppliemented by disbarment and ignommy for the partners at the 'Big Four'
 


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