Loan charge review delayed – guidance published

Dec 16, 2019

Due to the general election, the outcome of the independent loan charge review has been delayed. This will impact on anyone currently in the process of agreeing a settlement in respect of this matter with HMRC. HMRC has published guidance on this which advisers and taxpayers should refer to.

The guidance firstly makes clear that the loan charge remains in operation and taxpayers should continue to meet your legal obligations. This includes reporting the loan charge on their self -assessment tax return by 31 January 2020.  

In respect of those in the process of agreeing a settlement, the guidance reads as follows “HMRC recognise you may want to wait for the government’s response to the review before finalising your settlement. You will need to report the loan charge on your tax return if your settlement is not finalised by 31 January 2020. Reporting your loan charge will not prevent you finalising your settlement. Once your settlement is finalised you can amend your tax return if necessary.”

The guidance does not cover payment of tax arising as a result of the loan charge on the self-assessment return in any detail. However, the following statement is relevant:-

“If you choose to settle, HMRC will continue its existing practice of not charging statutory late payment interest from 1 October 2018, or, if later, the month in which you provided the required information to HMRC.”