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What constitutes a Loan Charge 'Awareness' letter and when should they arrived
Source: WhatDoTheyKnow
Authority: HM Revenue and Customs
Status: The request was
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Imported path: /opt/loancharge/imports/wdtk/requests/what_constitutes_a_loan_charge_a
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SOURCE: WhatDoTheyKnow
SOURCE_URL: https://www.whatdotheyknow.com/request/what_constitutes_a_loan_charge_a
TITLE: What constitutes a Loan Charge 'Awareness' letter and when should they arrived
AUTHORITY: HM Revenue and Customs
AUTHORITY_URL: https://www.whatdotheyknow.com/body/hmrc
STATUS: The request was
successful
.
REQUEST_SLUG: what_constitutes_a_loan_charge_a
CAPTURED_AT: 2026-05-19T07:24:14+00:00
PROVENANCE: {"first_seen_at": "2026-05-18T12:52:17", "first_seen_page": "1", "first_query_term": "\"Loan Charge\"", "first_date_after": "2019/01/01", "first_date_before": "2020/01/01", "matched_query_terms": "\"Loan Charge\" | \"disguised remuneration\"", "matched_date_ranges": "2019/01/01 to 2020/01/01", "first_search_url_template": "https://www.whatdotheyknow.com/search/%22Loan%20Charge%22/requests?commit=Filter&query=%22Loan+Charge%22&request_date_after=2019%2F01%2F01&request_date_before=2020%2F01%2F01&request_variety%5B%5D=sent&request_variety%5B%5D=response&request_variety%5B%5D=comment&sortby=&utf8=%E2%9C%93&page="}
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- FOI2019_00659_Philip_Harris.pdf | https://www.whatdotheyknow.com/request/what_constitutes_a_loan_charge_a/response/1342958/attach/2/FOI2019%2000659%20Philip%20Harris.pdf?cookie_passthrough=1 | application/pdf | 245432 bytes
- [not downloaded] | https://www.whatdotheyknow.com/request/what_constitutes_a_loan_charge_a/response/1342958/attach/html/2/FOI2019%2000659%20Philip%20Harris.pdf.html | | 0 bytes
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MESSAGE 1 [outgoing]
HEADER: Philip Harris
11 March 2019
Delivered
--------------------------------------------------------------------------------
Dear HM Revenue and Customs,
Below is the content of a letter I received in late July last year - it was the first time I learned of the Loan Charge...
Is this an example of a "Loan Charge awareness" letter? Ie was this sent to to make me aware of the Loan Charge (I ask as the wording with "believe" suggests HMRC are unsure themselves)
If this is or is not an example of an "awareness letter" please provide as many examples of alternate letters used to make tax payers aware of the loan charge
Yours faithfully,
Philip Harris
The letter
Date 24 July 2018
Dear Mr...
I am writing to you as I believe you've used a tax avoidance scheme. As part of this scheme you received a loan or credit instead of income and you haven't paid tax or national insurance on this. We call this 'disguised remuneration'.
The new LOAN CHARGE will tax all outstanding disguised remuneration loans or credits on 5 April 2019. If you don't take action now you will be caught by this loan charge on 5 April 2019
The letter goes on to detail how to settle - which is not pertinent to my questions
================================================================================
MESSAGE 2 [incoming]
HEADER: foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team,
HM Revenue and Customs
13 March 2019
--------------------------------------------------------------------------------
Our ref: FOI2019/00659
Dear Mr Harris,
Freedom of Information Act 2000 Acknowledgement
Thank you for your communication of 11th 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
5 April 2019
--------------------------------------------------------------------------------
1 Attachment
FOI2019 00659 Philip Harris.pdf
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Dear Harris
I am writing in response to your request for information, received 11
March 2019.
Yours sincerely,
HMRC Freedom of Information Team
================================================================================
MESSAGE 4 [outgoing]
--------------------------------------------------------------------------------
This message has been hidden. No FOI related correspondence removed. If you are the requester, then you may
sign in
to view the message. Please
contact us
if you have any questions.
================================================================================
ATTACHMENT TEXT EXTRACTION / OCR
================================================================================
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ATTACHMENT: FOI2019_00659_Philip_Harris.pdf
TEXT_FILE: FOI2019_00659_Philip_Harris.pdf.txt
METHOD: pdf_native
OCR_USED: False
PAGES: 6
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--- PDF page 1 ---
Information is available in large print, audio and Braille formats.
Text Relay service prefix number – 18001
Counter-Avoidance
Freedom of Information Team
S1715
6 Floor
Central Mail Unit
Newcastle Upon Tyne
NE98 1ZZ
Mr Philip Harris
By email: request-559771-
a54d316e@whatdotheyknow.com
Email
foi.request@hmrc.gsi.gov.uk
Web
www.gov.uk
Date: 5 April 2019
Our ref:
FOI2019/00659
Dear Mr Harris
Freedom of Information Act 2000 (FOIA)
Thank you for your request, which was received on 11 March, for the following information:
“Below is the content of a letter I received in late July last year - it was the first time I learned
of the Loan Charge...
Is this an example of a "Loan Charge awareness" letter? Ie was this sent to to make me
aware of the Loan Charge (I ask as the wording with "believe" suggests HMRC are unsure
themselves)
If this is or is not an example of an "awareness letter" please provide as many examples of
alternate letters used to make tax payers aware of the loan charge
Yours faithfully,
Philip Harris
The letter
Date 24 July 2018
Dear Mr...
I am writing to you as I believe you've used a tax avoidance scheme. As part of this scheme
you received a loan or credit instead of income and you haven't paid tax or national
insurance on this. We call this 'disguised remuneration'.
The new LOAN CHARGE will tax all outstanding disguised remuneration loans or credits on
5 April 2019. If you don't take action now you will be caught by this loan charge on 5 April
2019
The letter goes on to detail how to settle - which is not pertinent to my questions”
I can confirm that the text you have referenced was included in HMRC’s loan charge
awareness letters, with some minor revisions to the wording, in some of the versions, for
--- PDF page 2 ---
2
example, to include the simplified settlement terms. I attach examples of the letters as
requested.
HMRC is actively encouraging disguised remuneration (DR) scheme users likely to be
impacted by the charge on DR loans to come forward and settle their tax affairs with us
before the charge on DR loans come into effect. I can confirm that we have issued similar
awareness letters to over 40,000 DR scheme users.
You might also like to know that we have raised additional awareness about the loan charge
through our series of tax avoidance ‘Spotlight’ publications, tweets and webinars. We also
have worked with a range of stakeholders to generate broader awareness which has been
picked up in wider media activity.
If you are not satisfied with this reply you may request a review within two months by
emailing foi.review@hmrc.gsi.gov.uk, or by writing to the address at the top right-hand side
of this letter.
If you are not content with the outcome of an internal review you can complain to the
Information Commissioner’s Office
Yours sincerely,
Freedom of Information Team
--- PDF page 3 ---
3
#
CA
HM Revenue & Customs
x
BX9 1LW
Name
Address
Phone 03000 534226
Email
cl.resolution@hmrc.gsi.gov.uk
Web
www.gov.uk
Date
XX July 2018
Our Ref
XXXXXXXXXXX
Your Ref
LCA
Dear XXXXXXXXXXXXX
Contractor loans – the loan charge
I am writing to you as I believe you’ve used a tax avoidance scheme. As part of this scheme
you received a loan or credit instead of income and you haven’t paid tax or national
insurance on this. We call this ‘disguised remuneration’.
The new loan charge will tax all outstanding disguised remuneration loans or credits on 5
April 2019. If you don’t take action now you will be caught by this loan charge on 5 April
2019.
What you need to do next
Settle your tax affairs now so that you don’t have to pay the loan charge
Settling will give you certainty over your tax affairs and bring our enquiries to an end. Settling
now will mean you benefit from the rates and allowances in place at the time you received
the loan or credit. It is likely that you will pay less tax than you would if you waited for the
loan charge to arise. Settling is straightforward and if needed we are able to help you spread
the cost of settlement by paying in instalments.
If you haven’t already registered your interest in settling or aren’t talking to HMRC
about settlement, the best way to get in touch is to email us at
cl.resolution@hmrc.gsi.gov.uk. You can also contact us by phone or post using the
details at the top of this letter.
If you don’t settle your tax affairs or repay the loan(s) or credits then you’ll have to
pay the loan charge. If you decide to repay your outstanding Disguised Remuneration
loans or credits you will have to provide evidence to show that you’ve done so.
Paying the loan charge won’t settle any open tax enquiries. Those will still have to be
resolved and you may be required to pay further tax and interest.
--- PDF page 4 ---
4
Further information
There’s more information on the additional information sheet enclosed with this letter. To find
out more about the benefits of settling your disguised remuneration scheme, go to GOV.UK
and search for ‘disguised remuneration: settling your tax affairs’.
Getting advice
If you have a tax adviser, you may also want to discuss your options with them.
Yours sincerely
Contractor Avoidance Team
--- PDF page 5 ---
5
#
CA
HM Revenue & Customs
x
BX9 1LW
Name & Address
Phone
03000 534226 (UK)
+44 3000 534226 (Outside UK)
Email
cl.resolution@hmrc.gsi.gov.uk
Web
www.gov.uk
Date
XX November 2018
Our Ref
UTR/TRN/NINO
Your Ref
LCA
Dear xxxxxxxxxxxxx
Contractor loans – the loan charge
I am writing to you as I believe you’ve used a tax avoidance scheme. As part of this scheme
you received a loan or credit instead of income and you haven’t paid tax or national
insurance on this. We call this ‘disguised remuneration’.
The new loan charge will tax all outstanding disguised remuneration loans or credits on 5
April 2019. If you don’t take action now you will be caught by this loan charge on 5 April
2019.
What you need to do next
Settle your tax affairs now so that you don’t have to pay the loan charge
Settling will give you certainty over your tax affairs and bring our enquiries to an end.
Settling now will mean you benefit from the rates and allowances in place at the time you
received the loan or credit. It is likely that you will pay less tax than you would if you waited
for the loan charge to arise.
Settling is straightforward and if needed we are able to help you spread the cost of
settlement by paying in instalments. You can now spread your payments over a 5 year
period without needing to provide detailed supporting information provided that:
you have an expected current year taxable income of less than £50,000. (For em-
ployees, this is your expected gross earnings, for self-employed people, this is your
expected net profit.); and
you are no longer engaging in tax avoidance.
You should always pay over the shortest period possible to reduce interest.
If your income is higher, or you need a longer payment period, we will work with you to
agree a suitable arrangement with you, but we would require further information before
doing so.
--- PDF page 6 ---
6
If you haven’t already registered your interest in settling or aren’t talking to HMRC
about settlement, the best way to get in touch is to email us at
cl.resolution@hmrc.gsi.gov.uk. You can also contact us by phone or post using the
details at the top of this letter.
If you don’t settle your tax affairs or repay the loan(s) or credits then you’ll have to
pay the loan charge. If you decide to repay your outstanding Disguised Remuneration
loans or credits you will have to provide evidence to show that you’ve done so.
Paying the loan charge won’t settle any open tax enquiries. Those will still have to be
resolved and you may be required to pay further tax and interest.
Beware of schemes which claim to get you out of the Loan Charge
HMRC is aware of some arrangements which claim to help prevent the loan charge from
arising. Some of these claim to repay loans, some to re-categorise the loans, with others
taking a different approach. It is HMRC’s firm view that these schemes do not work, if the
arrangements seek to deliberately mislead or conceal information from HMRC they may also
be fraudulent and could bring more serious consequences.
Further information
There’s more information on the additional information sheet enclosed with this letter. To
find out more about the benefits of settling your disguised remuneration scheme, go to
GOV.UK and search for ‘disguised remuneration: settling your tax affairs’.
In addition, some of the more frequent questions we have been asked about the loan charge
are covered in the attached note.
There is more information on arrangements claiming to get out of the loan charge on gov.uk,
search for Spotlight 39.
Getting advice
If you have a tax adviser, you may also want to discuss your options with them.
Yours sincerely
Contractor Avoidance Team