The Low Incomes Tax Reform Group (LITRG) has stated it is not “convinced” that HMRC’s latest decision to allow late loan charge spreading elections “will be enough” to get people moving towards complying with the charge.
It comes in response to the HMRC’s recently published ‘Statement of Practice’ which sets out how it will use “discretionary powers” to accept late elections by taxpayers to help spread their outstanding loan charge balance over three tax years.
The original deadline for making a spreading election was 30 September 2020, however, the LITRG has revealed that the end date “seems to have been missed by a number of people”.
HMRC has now revealed that any late election made up to 31 December 2020 will be automatically accepted, but any attempts to submit an election after this date will be declined.
Victoria Todd, head of LITRG said: “While we welcome this announcement by HMRC, it does not address the fact that there are still some people out there who need to deal with the loan charge but who do not have enough insight or information to be able to fulfil their obligations.
“We urge HMRC to write to people who missed the 30 September deadline, setting out the specific information that HMRC hold about the umbrella companies that they were in where loan arrangements are suspected.”
She added: “This could help act as a trigger or prompt for taxpayers to investigate and take the first step to bringing their tax affairs up to date.
“Unrepresented taxpayers are sometimes worried about engaging with HMRC. These letters should also highlight the available help, for example via TaxAid or HMRC’s extra support team.”