Settling prior to the 2019 loan charge

Source: WhatDoTheyKnow
Authority: HM Revenue and Customs
Status: The request was partially successful .
Imported path: /opt/loancharge/imports/wdtk/requests/settling_prior_to_the_2019_loan
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SOURCE: WhatDoTheyKnow
SOURCE_URL: https://www.whatdotheyknow.com/request/settling_prior_to_the_2019_loan
TITLE: Settling prior to the 2019 loan charge
AUTHORITY: HM Revenue and Customs
AUTHORITY_URL: https://www.whatdotheyknow.com/body/hmrc
STATUS: The request was
partially successful
.
REQUEST_SLUG: settling_prior_to_the_2019_loan
CAPTURED_AT: 2026-05-19T07:06:35+00:00
PROVENANCE: {"first_seen_at": "2026-05-18T12:51:16", "first_seen_page": "1", "first_query_term": "\"Loan Charge\"", "first_date_after": "2017/01/01", "first_date_before": "2018/01/01", "matched_query_terms": "\"Loan Charge\" | \"disguised remuneration\"", "matched_date_ranges": "2017/01/01 to 2018/01/01", "first_search_url_template": "https://www.whatdotheyknow.com/search/%22Loan%20Charge%22/requests?commit=Filter&query=%22Loan+Charge%22&request_date_after=2017%2F01%2F01&request_date_before=2018%2F01%2F01&request_variety%5B%5D=sent&request_variety%5B%5D=response&request_variety%5B%5D=comment&sortby=&utf8=%E2%9C%93&page="}

ATTACHMENTS:
- FOI2017_00462_M_James_Final_response.pdf | https://www.whatdotheyknow.com/request/settling_prior_to_the_2019_loan/response/959311/attach/2/FOI2017%2000462%20M%20James%20Final%20response.pdf?cookie_passthrough=1 | application/pdf | 229562 bytes
- [not downloaded] | https://www.whatdotheyknow.com/request/settling_prior_to_the_2019_loan/response/959311/attach/html/2/FOI2017%2000462%20M%20James%20Final%20response.pdf.html |  | 0 bytes

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MESSAGE 1 [outgoing]
HEADER: Martin James
7 March 2017
Delivered
--------------------------------------------------------------------------------
Dear HM Revenue and Customs,
Assuming the 2019 loan charge legislation gets passed by Parliament, it will introduce a charge to income tax and NICs on any disguised remuneration loans which are outstanding on 5/4/19. The charge will fall in the 2018/19 tax year.  Taxpayers will not be liable to the charge if they repay the loans or settle before 5/4/19.  That all seems fairly clear.
However, what is far from clear are what terms will be offered to taxpayers who do volunteer to settle before 5/4/19. In particular:
(1) will late payment interest be charged?
(2) will NICs be payable as well as tax?
(3) will the chargeable amount be grossed up to include scheme promoters' fees? [For example, if a taxpayer had received a loan of £9,000 but the promoter had already deducted a 10% fee, would the taxpayer be assessed on an income of £10,000?]
(4) how will "closed" tax years be treated?  [By closed, I mean years where HMRC have not previously opened an enquiry or raised an assessment, and the time limits for doing so have expired.]
Does HMRC hold any information which would answer these questions?
Yours faithfully,
Martin James

================================================================================
MESSAGE 2 [incoming]
HEADER: foi.team@hmrc.gsi.gov.uk on behalf of FOI Team,
        HM Revenue and Customs
7 March 2017
--------------------------------------------------------------------------------
Our ref: FOI2017/00462
Dear Mr James,
Freedom of Information Act 2000 Acknowledgement
Thank you for your communication of 7th March which has been passed to
HMRC's Freedom of Information Team.
We have allocated the above reference which you should quote if you need
to contact us.
The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.
Yours sincerely
HMRC Freedom of Information Act Team

================================================================================
MESSAGE 3 [incoming]
HEADER: foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team,
        HM Revenue and Customs
30 March 2017
--------------------------------------------------------------------------------
1 Attachment
FOI2017 00462 M James Final response.pdf
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Dear Mr James,
I am writing in response to your request for information, received 7 March
2017.
Yours sincerely,
HMRC Freedom of Information Team

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ATTACHMENT: FOI2017_00462_M_James_Final_response.pdf
TEXT_FILE: FOI2017_00462_M_James_Final_response.pdf.txt
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OCR_USED: False
PAGES: 2
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--- PDF page 1 ---
Information is available in large print, audio and Braille formats. 
Text Relay service prefix number – 18001 
FF 
 
 
 
I 
 
 
Counter-Avoidance 
Freedom of Information Team 
Room 1C/23 
100 Parliament Street 
London 
SW1A 2BQ 
Mr Martin James 
 
By email: request-393797-
3e8fc622@whatdotheyknow.com 
Email 
foi.request@hmrc.gsi.gov.uk 
Web 
www.gov.uk 
Date: 29 March 2017 
 
Our ref: 
FOI2017/00462 
 
 
Dear Mr Martin James 
 
Freedom of Information Act 2000 (FOIA) 
 
Thank you for your request under the FOIA, which was received on 7th March, for the 
following information: 
 
“Assuming the 2019 loan charge legislation gets passed by Parliament, it will introduce a 
charge to income tax and NICs on any disguised remuneration loans which are outstanding 
on 5/4/19. The charge will fall in the 2018/19 tax year. Taxpayers will not be liable to the 
charge if they repay the loans or settle before 5/4/19. That all seems fairly clear. 
 
However, what is far from clear are what terms will be offered to taxpayers who do volunteer 
to settle before 5/4/19. In particular: 
 
(1) will late payment interest be charged? 
(2) will NICs be payable as well as tax? 
(3) will the chargeable amount be grossed up to include scheme promoters' fees? [For 
example, if a taxpayer had received a loan of £9,000 but the promoter had already deducted 
a 10% fee, would the taxpayer be assessed on an income of £10,000?] 
(4) how will "closed" tax years be treated? [By closed, I mean years where HMRC have not 
previously opened an enquiry or raised an assessment, and the time limits for doing so have 
expired.] 
 
Does HMRC hold any information which would answer these questions?” 
 
I can confirm that HMRC holds information within the scope of your request. 
 
Settlement terms will depend on the facts and circumstances of the individual scheme(s) the 
customer has used. Customers who wish to repay their loans or settle before 5 April 2019 
should contact our dedicated Contractor Loans helpline on 03000 534226, or email 
cl.resolution@hmrc.gsi.gov.uk. The team will check what scheme(s) the customer has used 
and provide specific settlement terms for that schemes(s). The settlement terms will set out 
the various components of settlement, such as the tax and NIC payable, and years to which 
the settlement relates.

--- PDF page 2 ---
135831 
2 
 
 
Background 
 
At Budget 2016 the government announced a package of changes to tackle disguised 
remuneration. The changes are part of a wider commitment to crack down on tax avoidance 
to ensure companies and individuals pay their fair share of tax. 
 
One of the changes announced at Budget 2016 and confirmed in Finance Bill 2017 is a new 
charge on disguised remuneration loans which are outstanding on 5 April 2019. This charge 
will not apply where the loan has been repaid in full, or the loan is from an amount on which 
Income Tax has been accounted for in full, before 5 April 2019. This means that there will be 
a period of grace when the loan can be repaid in full, or the user can settle with HMRC, to 
avoid the new charge being triggered. 
 
Scheme users may therefore want to consider early settlement before 5 April 2019. 
 
More information on changes to the disguised remuneration rules is available at: 
https://www.gov.uk/government/publications/tackling-disguised-remuneration-technical-
update/tackling-disguised-remuneration-technical-update 
If you are not happy with this reply you may request a review by emailing 
foi.review@hmrc.gsi.gov.uk, or by post to HMRC FOI Team, Room 1C/23, 100 Parliament 
Street London SW1A 2BQ. You must request a review within 2 months of the date of this 
letter. It would help us carry out our review if you set out the aspects of the reply that 
concern you and why you are dissatisfied. 
If you are not content with the outcome of an internal review, you can complain to the 
Information Commissioner’s Office (ICO). The ICO will not usually consider a case unless 
you have exhausted the internal review procedure provided by HMRC. You can make a 
complaint through the ICO’s website at: www.ico.org.uk, or by post to: Information 
Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF. 
 
Yours sincerely 
 
 
Freedom of Information Team
Loan Charge FOI

Settling prior to the 2019 loan charge

Imported text

Loan Charge FOI
