2019 Loan Charge – another weapon for HMRC

If you have used remuneration tax planning involving loans (after 6 April 1999) and choose not to settle with HMRC using the current disguised remuneration settlement opportunity, then any outstanding loans as at 5 April 2019 will be subject to PAYE and NIC (with a few limited exceptions) under legislation enacted in the Finance (No 2) Act 2017. The charge falls in the 2018/19 tax year and so is payable by 31 January 2020.

Under the legislation there is also a requirement for employees to report details of loans to their employer or HMRC. The required information must be provided before 19 April 2019.

The schemes caught by the loan charge are far reaching and include Employee Benefit Trusts, Employer Financed Retirement Benefit Schemes, Contractor Loan Schemes and other disguised remuneration arrangements.

Whilst the loan charge is still some way away, the disguised remuneration settlement opportunity will close soon to registrations (31 May 2018), and if schemes are not settled using the opportunity, taxpayers could still be hit with a PAYE and NIC charge in 2019 in relation to the planning they have undertaken.

If you have a loan we would recommend that consideration is given now to the options available, which includes settlement, so that you are aware of all of the options available to you.

If you would like to discuss settlement, the 2019 Loan Charge and the options available to you in relation to historic tax planning please call us on 0207 063 4639 or 0161 238 9235 to speak to a member of our Tax Investigations team.

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