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Meredith McCammond gives a high-level overview of how the repayment scheme will work.
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Loan charge: Repayments of voluntary restitution

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A new scheme allows HMRC to refund an amount that was settled 'voluntarily' to avoid the loan charge. In the first of two articles, Meredith McCammond gives a high-level overview of how it will work.

2nd Oct 2020
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Voluntary restitution is when a person voluntarily pays amounts of tax or national insurance contributions (NICs) when HMRC is not able to recover those amounts. For example, when HMRC can’t raise an assessment for tax because the deadline for issuing one has passed.

As the loan charge originally had a lengthy look-back period (applying to loans made from 6 April 1999 to 5 April 2019), some people will have settled their tax affairs with HMRC by paying voluntary restitution so that they didn’t have to pay the loan charge.

However, following the Morse review, the loan charge no longer applies to certain older loans; therefore, there may be no need for taxpayers to pay such voluntary restitution.

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Replies (1)

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By Thinktank
05th Oct 2020 10:58

One of my client has received notice to file tax return because HMRC thinks he has loan charge to pay. The client has no such loan arrangements.

He received £12k from his friend other than that everything received was via payroll.

Why HMRC might be sending letters like this? Any idea

I think bank reported large receipt!

Thanks (0)