The Government has announced an independent review of the controversial loan charge, but the taxes due on historical loans (disguised renumeration loans) won’t be cancelled or suspended while the review takes place.
Taxpayers who are part way through agreeing a settlement with HMRC regarding the loan schemes they have used, or who have opted to pay the loan charge instead, need to take action as follows:
Already settled with HMRC
Where tax is being paid by instalments the taxpayer should carry on making those payments.
Waiting to settle with HMRC
Where all information was provided to HMRC by 5 April 2019, the taxpayer can either wait for the outcome of the review or agree a payment schedule with HMRC, either way interest will continue to accrue on the outstanding tax due.
Will pay loan charge instead
The taxpayer should report the additional information required about outstanding loans to HMRC by 30 September 2019. HMRC reserves the right to charge penalties if this information is not provided on time.
The taxpayer should pay any tax demand by an Accelerated Payment Notice (APN), as penalties will be charged if the tax is not paid on time.
Open tax enquiry
The enquiry will continue throughout the period of the loan charge review.
Written by the Tax Advice Network