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September 12, 2019

Government Announces Review of the Loan Charge

The Government has announced that an independent review will be held into the April 2019 Loan Charge with the results due in mid-November 2019.

The review will consider the impact of the loan charge on taxpayers who have entered into disguised remuneration schemes and provide recommendations.

In particular the review and recommendations will consider:

  • Whether the Loan Charge is an appropriate response to the tax avoidance behaviour in question
  • Whether changes to the Loan Charge already announced address any legitimate concerns raised regarding the impact on individuals (for example in relation to affordability)
  • The impact on wider taxpayer fairness
  • HMRC’s ability to tackle tax avoidance effectively in the future

In the event that the review recommends scrapping or changing the Loan Charge, it isn’t clear how this will affect taxpayers who have already paid the Loan Charge, have agreed a time to pay arrangement to pay the Loan Charge, or those that have agreed/are in the process of agreeing a settlement with HMRC under the November 2017 disguised remuneration settlement opportunity.

Do I need to do anything?

For the time being there are no changes to the legislation and taxpayers should continue to comply with their existing obligations – for example by continuing to make any agreed payments and for cases not being settled, completing the loan charge  information return by the deadline of 30 September 2019.

Where settlement is currently in progress, taxpayers may wish to consider asking HMRC to hold off on finalising the settlement until after the report is released, although whether or not this is the preferred course of action will depend on the circumstances.

Related Articles

That Bites: The 2019 Loan Charge and Human Rights (21 August 2019)

The Clock is Ticking for Disguised Remuneration (5th September 2018)

Extra Time To Pay For Disguised Remuneration Users (2 August 2018)

Rangers v HMRC – EBT Struck Down by Supreme Court (27 July 2017)

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