Counsel's Tax Return and Tax Advice

The text below was approved by Andrew Thornhill QC.

SUMMARY OF THIS JUDICIAL REVIEW

Can you summarise what this case could actually achieve?

Yes, it would declare the Loan Charge legislation effectively invalid. (ATQC)

PLEASE READ EVERY WORD OF THE BELOW VERY CAREFULLY

If you have questions or need clarification after reading all the way through then please let us know and we will look to update these instructions or add them to the Tax Specific FAQ below.
If you have a question please email contact@lcjreu.org.uk (but please only email if you cannot find the answer here).
These are instructions on how to complete your Self-Assessment Tax Return (SATR) and to get Tax Advice if you intend to mitigate any tax charges due to the LC JR EU.
If you complete the return as below and take tax advice, then you should NOT have to pay punitive penalties (up to 100%). It will always be the case that you will suffer late payment penalties (15%) and interest IF THE CASE EVENTUALLY LOSES WHICH COULD BE SEVERAL YEARS FROM NOW.

Tax Advice

You are strongly encouraged to take professional tax advice before completing your tax return.
Not doing so could leave you open to punitive penalties of up to 100%.
If you already have an adviser who is instructing you on completion of the Tax Return and in particular the whitespace then please check with them advice.
You should show them or point them at the Opinion.
Alternatively, you can still use this advice service, as below, and pass the information onto your own adviser, but check with them first.

Tax Advice Service

AS LONG AS YOU ASK FOR ADVICE BY 30 SEPTEMBER YOU CAN USE THE WHITESPACE WORDING. IF IT IS AFTER THIS DATE THEN YOU NEED TO ENQUIRE AS TO WHETHER YOU CAN USE IT OR NOT.
IF USING THE ADVISORY SERVICE BELOW IN THE UNLIKELY CASE THAT YOUR CIRCUMSTANCES DO NOT FIT THE CRITERIA THEN YOU WILL HAVE TO AMEND YOUR RETURN.
THE TAX PLANNING YOU USED MUST HAVE HAD AN OFFSHORE ELEMENT (INCLUDING CHANNEL ISLANDS AND ISLE OF MAN, BUT NOT GIBRALTAR). IF IT DOES NOT HAVE AN OFFSHORE ELEMENT OR YOU ARE UNSURE THEN YOU SHOULD ENQUIRE STATING THAT YOU ARE UNSURE IN THE EMAIL.
We have set up a service for people who want tax advice SPECIFICALLY for and LIMITED to the aspects of the completion of your tax return.
This does not mean they will complete your tax return for you. You may ask an accountant or similar to do this on your behalf.
They will also not be able to advise you on settlement or other aspects of the Loan Charge.
This service is independent of LCJREU. There is a cost of £150 (including VAT). This is the absolute minimum that we could negotiate. If you are unable to pay the fee then please contact us and we will see if there is any other assistance we can provide, although we cannot guarantee this.

The process you will need to follow is:

  1. You will access the list of questions below in relation to your use of loan arrangements by either copying and pasting them into an email, or by downloading the Tax Advice Questions.
  2. Record the answers to each of the questions in either the email or the document downloaded.
  3. If using the document then attach this to an email.
  4. Send the email to Chartered Accountant Janet Parker of Black Lab Accounting using the email address (lcjreu@blacklabaccounting.co.uk) with the SUBJECT TITLE "LCJREU TAX ADVICE". It is very important that you use this so that it makes the process more efficient by allowing emails to be identified easily and quickly.
  5. The accountant, Janet Parker, will need to be assured of who you are so that she can allow you to use the service. For this you will need to provide Photo ID and Proof of Address. There is an immediate client/adviser confidentiality here so you should not have any concerns regarding the provision of this information.
  6. Janet will arrange a Zoom appointment or similar so that you can do this online where possible.
  7. Following this appointment you will be asked to email (lcjreu@blacklabaccounting.co.uk) copies of your Photo ID and Proof of Address to Janet with the TITLE "LCJREU PROOF". This will be confirmed at your Zoom appointment as well.
  8. If you are unable to do this online then alternative arrangements will be made for the ID process; however it cannot be avoided.
  9. The accountant will then forward the tax details to Andrew Thornhill QC.
  10. Andrew Thornhill QC will review the tax details and issue the necessary advice back to the accountant.
  11. You will receive the advice back via email, together with an invoice for £150 including VAT.
  12. You will need to keep this information safe for possible future reference.

Link To Flow Chart Of Tax Advice Process

The Questions you must answer in the email are as follows:

  1. Will you be choosing not to disclose your loans at all?
  2. How many contractor schemes have you participated in?
  3. In relation to the scheme or schemes were you employed or self-employed or what other capacity did you have?
  4. What percentage of the total amount received was through loans?
  5. As far as you are aware, was tax paid on your income apart from the loan?
  6. Did anyone advise you on the tax treatment of payments to you? What advice did you get?
  7. What were the terms of the loans particularly as regards repayment?
  8. Have you got any 'open years', that is, years prior to 2017-18 where HMRC are claiming you owe tax?

Completing Your Tax Return

You may do one of two things:

  1. Not disclose your loans and not add any whitespace (you still need tax advice).
  2. Disclose the loans and text provided below in the "white-space" section of the tax return. "whitespace" is the Any Additional Information section of the Tax Return explained on the video.
    You need only disclose loans that occurred after 9 December 2010.

VERY IMPORTANT: IF YOU DISCLOSE YOUR LOANS IN THE LOAN CHARGE SECTION OF THE TAX RETURN THEN THIS WILL EFFECTIVELY BE SAYING THAT YOU ADMIT LIABILITY WHICH YOU DO NOT WANT!

The text you will use on your tax return is:

"I have declared loans above as required, but having consulted a professional adviser, and I believe that no tax is due on the grounds that EU Law overrides the Disguised Remuneration legislation"

Please view the video on how to complete the tax return


For Loans

Example

Loans
2011/12 AML £19,487.00
2012/13 AML £23,467.00
2012/13 Garraway £36,127.00
2015/16 Marrow £34,176.00

I have declared loans above as required, but having consulted a professional adviser, and I believe that no tax is due on the grounds that EU Law overrides the Disguised Remuneration legislation


OR

For ODCA

Example

Overdrawn Capital Account Payments
2011/12 AML £19,487.00
2012/13 AML £23,467.00
2012/13 Garraway £36,127.00
2015/16 Marrow £34,176.00

I have declared Overdrawn Capital Account Payments above as required, but having consulted a professional adviser, and I believe that no tax is due on the grounds that EU Law overrides the Disguised Remuneration legislation

Profit share payments to this Overdrawn Capital Account have been declared on my self assessments with any tax due paid.


OR

Change the text according to the scheme type that you used

Completing your Tax Return

Creating a white-space attachment document

You can file late if you are pushed for time; which, due to the unforeseeable late date, may be a possibility.
If you file you SATR after the 30th of September then you may be subject to a late filing penalty of £100 if your tax return is up to 3 months late. You'll have to pay more if it's later.
You can ask the accountant to file your tax return. However, this is not part of the arrangement we have reached with the accountant and will be at a separate cost which needs to be negotiated and borne by you.

Tax Advice and Tax Return FAQ

TBD