2019 Loan Charge

Thank you for contacting me about disguised remuneration. 

The Government is committed to tackling tax avoidance and evasion at all levels in order to ensure that everyone, no matter who they are, pays the right amount of tax at the right time. Over 100 measures have been introduced since 2010 and significant action has already been taken; including securing and protecting over £175 billion of tax revenues since 2010, and making the UK's tax gap fall to a record low of 6 per cent.

It is unfair to ordinary taxpayers, who pay the right amount of tax and do not use avoidance schemes, to let anybody benefit from contrived tax avoidance arrangements. That is why the Government has taken action to ensure that everybody pays the taxes they owe and contribute towards the public-funded services from which they benefit.

The 2019 Loan Charge has been applied to reclaim tax that is owed from disguised remuneration schemes, which are an aggressive form of tax avoidance which at their peak, cost the Exchequer hundreds of millions pounds a year.

Disguised remuneration schemes have never been acceptable. However, in order to give those people still holding a "loan" an opportunity to repay it, in 2016 the Government announced an amnesty period of three years to allow these people to agree a settlement with HMRC, which may include penalties. This period will come to a close on 5 April 2019.

A technical consultation was run on these changes, resulting in an improved process for submitting information to HMRC. The proposals are part of a package of reforms to prevent tax avoidance - all designed to make sure we have a tax system that is fair to everyone. 

Thank you again for taking the time to contact me.