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Loan charge, after 5th April 2019

What happens to an individual which has suffered the loan charge on the 5/4/2019, if the loan is repaid after 05/04/2019, but by 05/04/2020.

Would that person clain a tax credit, for the charge already paid or due, 

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16th Oct 2018 09:05

I'm no expert but I believe the point of the loan charge is that the "loan" has ceased to be a loan as of 5/4/2019 and has been deemed income.

Perhaps after closing the door the horse will come back of it's own volition but it seems unlikely and not worth the effort.

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16th Oct 2018 10:38

The primary liability is PAYE for the employer per page 8 of the link below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

As you would expect, there is no tax relief/credit for any loan repayment on or after 6.4.19.

Only if the employer cannot pay the PAYE/NIC or no longer exists does the loan charge potentially become the employee's liability per HMRC's guidance on that point.

One simple solution is to repay the loan before 6.4.19 and then extract those EBT funds post 5.4.19 at a low tax rate (to repay any bank etc. borrowings) over several years if necessary.

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