UPDATE: Loan Charge Review Delayed
As discussed in our blog Government Announces Review of the Loan Charge (12 September 2019) it was announced that an independent review was to be held into the April 2019 Loan Charge, with results due in mid-November 2019.
As a result of the upcoming general election, the report will now be delayed until the new government is formed. With the government’s response unlikely to be published before the end of the year, this will cause uncertainty for those who are due to report the loan charge on their tax returns before the 31 January 2020 deadline.
In light of this, HMRC has published guidance setting out what those affected by the loan charge will need to do:
- Those who have already reached a settlement with HMRC and paid the amount owed in full do not need to report the loan charge on their tax return.
- If you have reached a settlement with HMRC and are paying what you owe in instalments, then you should continue to pay the amounts agreed and you do not need to report the loan charge in your tax return.
- Where you provided all the required information to HMRC by 5 April 2019 and you are waiting to finalise your settlement, then you can continue to finalise your settlement if you choose. However, if you do not reach a settlement with HMRC by 31 January 2020 then you will need to report the loan charge on your tax return.
- Individuals who have not reached a settlement with HMRC will be subject to the loan charge and will be required to report it on their tax return. If you have not completed an additional information return, then you should do so as soon as possible as HMRC may charge penalties.
HMRC will update their guidance where the liability to the loan charge changes as a result of the government’s decision. If your liability changes as a result of the government’s decision and you have reported the loan charge on your tax return, then you will be able to amend your return at a later date.
PD Tax is following this case with interest and will continue to provide updates as they are made available. If you have any questions regarding the loan charge or your compliance obligations, please feel free to contact a member of our team.
Government Announces Review of the Loan Charge (12 September 2019)
That Bites: The 2019 Loan Charge and Human Rights (21 August 2019)
The Clock is Ticking for Disguised Remuneration (5th September 2018)
Extra Time To Pay For Disguised Remuneration Users (2 August 2018)
Rangers v HMRC – EBT Struck Down by Supreme Court (27 July 2017)