Loan Charge to go Ahead on 5th April

Posted by on Mar 27, 2019 in News Alerts, Newsletters | No Comments

The Treasury has published the outcome of their review into the implementation of the Loan Charge on 5th April 2019

Whilst there was an admission
that the Loan Charge was designed to avoid (an interesting word in the context
of Disguised Remuneration) protracted litigation with individuals challenging
the HMRC interpretation of their tax affairs and a recognition of the
difficulties that this would cause some individuals, the overall conclusion was
that the Loan Charge “is the right approach to ensure fairness for the vast
majority of UK taxpayers who pay the right amount of tax at the right time and
draw a line under this form of tax avoidance.”

As a result, the Loan Charge
will be applied to outstanding loans under Disguised Remuneration Schemes on
5th April.  The HMRC have clarified what outstanding means.  They
state “The charge will apply to all loans made since 6 April 1999 if they are
still outstanding on 5 April 2019. The charge will not arise on outstanding
loans if the user has agreed or is progressing towards settlement with HMRC
before 5 April 2019.”

It is not too late to start
this process with HMRC by contacting them by email at cl.resolution@hmrc.gsi.gov.uk.
 The information that needs to be provided by 5th April is:

  • your unique taxpayer reference (UTR)
  • your National Insurance number
  • the amount of contractor loans or contributions made in each
    tax year
  • whether you want to claim a benefit in kind offset – if so,
    how much and for which years
  • the name of your employer

If you would like our
assistance or have any questions, please contact us at tax@cooperfaure.co.uk.