Disguised remuneration loan charge review

The Chancellor, Sajid Javid, has commissioned a review of the loan charge to consider whether the policy is an appropriate way of dealing with disguised remuneration loan schemes used by individuals who entered directly into these schemes to avoid paying tax.

The disguised remuneration loan charge was introduced to tackle contrived schemes where a person’s income was paid as a loan, which did not have to be repaid instead of receiving salary, thereby avoiding tax and national insurance. Such schemes have now been successfully challenged by HMRC in the courts.

Disguised remuneration loan schemes were used by tens of thousands of people, and concerns have been raised about the use of the loan charge as a way of drawing a line under these schemes and collecting tax from the beneficiaries. The government is clear these schemes do not work and that their use is unfair to the 99.8% of taxpayers who have not used them.

Notify HMRC of EBT and similar loans by 30 September

Spreading the 2019 loan charge

Photo by Michael Soledad on Unsplash