Loan charge repayment deferred until September 2020

Jan 06, 2020

In September 2019, the Chancellor of the Exchequer commissioned an independent review of the disguised remuneration loan charge. The review and its conclusions have now been delivered to the government and the review recommendations and the government’s response have been published together with accompanying guidance.

Essentially, the outcome of the review means that taxpayers who have not filed their tax return, or agreed a settlement with HMRC, should still submit a Self-Assessment tax return for 2018/2019 by 31 January 2020, giving their best estimate of the tax due, or file by 30 September 2020.

HMRC will waive penalties for late filing, late payment and inaccuracies in respect of the loan charge entries in these returns. Late payment interest will not be payable for the period 1 February 2020 to 30 September 2020, as long as a return is filed, and tax paid or an arrangement made with HMRC to do so, by 30 September 2020.

In addition, the Government has also decided to limit the loan charge cut-off date to 9 December 2010 instead of 1999. It will also waive the tax arising for those who disclosed the relevant loan scheme to HMRC, in instances where HMRC did not act, but only for loan charges raised between 9 December 2010 and 5 April 2016. To qualify, taxpayers must have fully disclosed the scheme on their tax return over this period.