Loan charge review – disguised remuneration

The government has announced a review of the ‘loan charge’ arising on use of disguised remuneration schemes with the findings expected to be published mid November 2019.

The so-called disguised remuneration scheme is where the individual received income in the form of a loan to avoid income tax and National Insurance Contributions. The ‘loan charge’ is the amount owed to HMRC in the form of tax on the outstanding amount and was introduced in April 2019.

For individuals who have settled their tax position with regard to their use of such schemes, no further action is required and no loan charge is due. Any outstanding disguised remuneration loans need to be reported to HMRC before 1 October 2019.

For those with outstanding ‘loans’ as at 6.4.19 where tax has not been settled, HMRC are asking for payments to be made by the deadline in the offer letter they sent to avoid further repercussions.

If you believe you are affected by use of a disguised remuneration scheme, we can advise you on your position and obligations. Please contact [email protected] or call 01527 558539.

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Loan charge

Loan charge