The government has put forward three changes to the loan charge provisions in the Finance Bill, to be taken during the Public Bill Committee proceedings.
Clause 15 of the Bill enables the charge to be split over three tax years (2018/19 to 2020/21) rather than accounted for as a single sum in the 2018/19 tax return. As currently drafted, taxpayers must opt for the split treatment by 1 October 2020, unless HMRC allows a later election on a case-by-case basis. The amendments anticipate the potential impact of Covid-19 on the process and will allow HMRC to extend the election deadline by regulations.
Clause 17 enables HMRC to disapply interest in respect of the tax year 2018/19 (and 2019/20 payments on account) provided that taxpayers affected by the loan charge file a full and accurate tax return for 2018/19 (and pay the tax) by 30 September 2020. It also provides that, where a taxpayer enters into an agreement before that date to pay 2018/19 liabilities over a longer period, interest will only accrue from 1 October 2020. Again, in anticipation of coronavirus-related delays, the amendment to clause 17 will allow HMRC to extend those deadlines to avoid affected individuals incurring interest and penalties.
The government has put forward three changes to the loan charge provisions in the Finance Bill, to be taken during the Public Bill Committee proceedings.
Clause 15 of the Bill enables the charge to be split over three tax years (2018/19 to 2020/21) rather than accounted for as a single sum in the 2018/19 tax return. As currently drafted, taxpayers must opt for the split treatment by 1 October 2020, unless HMRC allows a later election on a case-by-case basis. The amendments anticipate the potential impact of Covid-19 on the process and will allow HMRC to extend the election deadline by regulations.
Clause 17 enables HMRC to disapply interest in respect of the tax year 2018/19 (and 2019/20 payments on account) provided that taxpayers affected by the loan charge file a full and accurate tax return for 2018/19 (and pay the tax) by 30 September 2020. It also provides that, where a taxpayer enters into an agreement before that date to pay 2018/19 liabilities over a longer period, interest will only accrue from 1 October 2020. Again, in anticipation of coronavirus-related delays, the amendment to clause 17 will allow HMRC to extend those deadlines to avoid affected individuals incurring interest and penalties.
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