Finance (No.2) Bill

Written evidence submitted by a person who wishes to remain anonymous (FB28)

Not for public disclosure

Re. 2019 Loan Charge

Dear sirs

Regarding the 2019 loan charge hidden within the latest Finance Act I find myself potentially on the receiving end of a really draconian and retrospective piece of legislation. Basically, a discovery assessment was raised against me for income earned via a loan mechanism. This income totalled around £135K over 2.5 years from 2009 to 2011, so not really a massive amount.

So now it looks like I either have to pay the loan back or pay the tax on it, plus interest and other penalties. I am ¾ of the way through paying an APN with a time to pay arrangement in place, but it doesn’t look like this will cover the final bill.

Prior to this I was working full time as a permanent employee, unfortunately I was made redundant from that job and it took me 3 months to find another job. This happened to be a contract position through a consultancy and being new to contracting, I didn’t really know how to engage, but I couldn’t go direct. I understood I could either start my own limited company or go via an ‘umbrella’ company. I choose the latter as it seemed easier and apparently protected me from ‘IR35’. Someone at that organisation suggested I use a particular umbrella scheme that meant I would take home a similar amount to working through a limited company.

I changed to a limited company in 2011 as legislation came in that pretty much closed down using that sort of offshore scheme. Up until that point I thought it was all above board as they had QC opinion etc. that it did fall within existing tax laws. I had sent in my tax returns and never received any indication that I was doing anything wrong.

Then the discovery assessments came in 2012 shortly followed by the APNs.

Since then I have had to put my retirement planning on hold, I’ve been supporting my, now 9 year old, son and partner who was able to work part time to be able to raise our child, but has now had to go back to work full time. I have made no significant contribution to a pension since 2012 and as the APN I have paid doesn’t cover the 2019 charge that’s even more income I could be saving.

I’m not asking for the APN back, but I am asking for a fair and reasonable settlement and closure, so I can get on with my working life with certainty into my tax affairs.

Legislation after legislation (especially of a retrospective nature) is not helping anybody. I realise I share some of the responsibility and perhaps should’ve been more diligent in choosing the umbrella/limited working options, but it really was a minefield.

In my mind a fair settlement would be the potential 2019 charge, which I think will be around £60K, divided up by those who benefited/enabled the arrangement to happen. Those people would be:

Me, for using the scheme.

The scheme promoters themselves.

The end client for allowing use of the scheme.

HMRC for not managing the tax system properly and allowing this to happen.


The lawmakers for not closing down these schemes when they knew them to nothing more than contrived loopholes and not proper tax planning.

So that would be something like £60000 / 5 = £12000

I would be grateful if you can you let me have your opinions on this?

Yours faithfully

January 2018


Prepared 16th January 2018