Loan charge update – the election strikes again!

First published on 10 November 2019 by Alastair
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We reported in September that the loan charge due on disguised remuneration schemes was not something to be avoided, despite the concerns many had raised about the government’s policy. 

However, only last week Jesse Norman, the financial secretary to the Treasury told the chair of the independent review into the controversial loan charge rules, “that the mid-November deadline, originally set out by the Chancellor Sajid Javid, can no longer be observed as parliament has dissolved.”

In his letter to the chair, Mr Norman said: “In light of this, and the clear Cabinet Office guidance about what decisions can be made in a pre-election period, ministers have agreed that it would be most appropriate for your report to be submitted to the new government on its formation.”

Moreover, in a “scathing report,” rushed out before parliament was dissolved, the Loan Charge All-Party Parliamentary Group (APPG) called for “an urgent delay and suspension of the loan charge, and for HMRC to suspend related accelerated payment notices (APNs).”

The APPG also called for an “investigation to assess why HMRC failed to adequately resource the counter avoidance department to deal with the settlements process…(the) suspension of all HMRC activity related to the loan charge and (they) demanded that the tax authority suspends all accelerated payment notices (APNs) already issued and should agree not to issue any new payment demands including APNs.”

Despite these requests, we know from first-hand experience that HMRC are not taking any notice and continue to harass taxpayers pursuing payments for the liabilities relating to loan charges.

All this does not mean that anyone involved in disguised remuneration is off the hook, at least not just yet.  Rather, it probably means as period of grace, until we have a new government. However, individuals will, at the very least still have to report the loan charge details in their 2019 tax returns which are due for submission by 31 January 2020. Significant penalties will be applied if the relevant information is not reported correctly. If you need assistance with this or have any other concerns about the loan charge, by all means call us.

Stewart McKinnon, Director

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