HMRC has updated its various loan charge guidance notes to reflect the
passing of the 30 September 2020 reporting deadline. Taxpayers and
employers who missed the deadline are advised to report any outstanding loan
balance if they haven’t already done so. Where taxpayers need to submit a
self-assessment tax return for the 2018/19 tax year setting out full details of
their outstanding loans, late filing and payment penalties and interest will start
to run from 1 February 2020.
Where taxpayers elected to spread their outstanding loan
balance over three tax years, they will also be required to submit
self-assessment tax returns for the 2019/20 and 2020/21 tax years by the normal
31 January filing deadlines. Employers who have already reported and paid the
loan charge and need to correct a mistake in the 2018/19 or 2019/20 tax years
may be able to send a full payment submission (FPS) or use Earlier Year Update
(EYU) submissions through HMRC’s basic PAYE tools. From 20 April 2021, an EYU
will no longer be a valid submission type, so any amendments for 2020/21 and
future tax years will need to be made using an FPS submission.
The guidance also notes that taxpayers who did not elect to
spread the loan charge over three years can ask for payments on account for
2019/20 to be reduced. In line with the coronavirus deferral options, no late
payment interest will be charged where the payment on account due on 31 July
2020 is made by 31 January 2021 or is included in a time to pay arrangement by
that date. Taxpayers are cautioned that a number of payments could otherwise
become due on 31 January 2021, with the first payment on account for 2020/21
also falling on that date.
HMRC has updated its various loan charge guidance notes to reflect the
passing of the 30 September 2020 reporting deadline. Taxpayers and
employers who missed the deadline are advised to report any outstanding loan
balance if they haven’t already done so. Where taxpayers need to submit a
self-assessment tax return for the 2018/19 tax year setting out full details of
their outstanding loans, late filing and payment penalties and interest will start
to run from 1 February 2020.
Where taxpayers elected to spread their outstanding loan
balance over three tax years, they will also be required to submit
self-assessment tax returns for the 2019/20 and 2020/21 tax years by the normal
31 January filing deadlines. Employers who have already reported and paid the
loan charge and need to correct a mistake in the 2018/19 or 2019/20 tax years
may be able to send a full payment submission (FPS) or use Earlier Year Update
(EYU) submissions through HMRC’s basic PAYE tools. From 20 April 2021, an EYU
will no longer be a valid submission type, so any amendments for 2020/21 and
future tax years will need to be made using an FPS submission.
The guidance also notes that taxpayers who did not elect to
spread the loan charge over three years can ask for payments on account for
2019/20 to be reduced. In line with the coronavirus deferral options, no late
payment interest will be charged where the payment on account due on 31 July
2020 is made by 31 January 2021 or is included in a time to pay arrangement by
that date. Taxpayers are cautioned that a number of payments could otherwise
become due on 31 January 2021, with the first payment on account for 2020/21
also falling on that date.
