Loan charge review announced

13th September 2019

The Treasury has announced an independent review of the loan charge, which affects many who used loan based avoidance schemes/disguised remuneration schemes. The review is the result of campaigning by the professional institutes, advisers and others.

HMRC has issued guidance for taxpayers whilst the review is underway, the core message is that current loan charge legislation remains in force, pending the outcome of the review.

If you have already settled your disguised remuneration loan scheme use and paid the amount you owe in full

You are not directly affected by the announcement of the review and there is no change to your tax position at this time.

If you have settled your disguised remuneration loan scheme use but are paying what you owe in instalments

There is no change to your tax position at this time. You should continue to pay the amounts you have agreed to pay while the review is ongoing.

If you provided all the required information by 5 April 2019 and are waiting to finalise your settlement with HMRC

You can continue to finalise your settlement with HMRC if you wish to do so. Settling your open enquiries and appeals will allow you certainty in your tax affairs. However, HMRC recognise that you may want to wait for the Government’s response to the review before finalising your settlement.

You do not need to submit the additional information return by 30 September 2019 as HMRC already has the information it needs.

If you choose to settle, HMRC will continue its existing practice of not charging statutory late payment interest from 1 October 2018, or, if later, the month in which you provided the required information to HMRC.

If you are not settling your disguised remuneration scheme use

You will still need to complete an additional information return by 30 September 2019. If you fail to do so HMRC reserves the right to charge penalties.

HMRC will update this guidance once the Government has responded to the review.

Katharine Arthur

Partner, Head of Private Client
+44 20 7969 5610
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