HMRC issue Spotlight 39: disguised remuneration: re-describing loans

Released 10 August 2017

HMRC have issued Spotlight 39: Disguised remuneration: re-describing loans, which highlights schemes that HMRC has identified are being used to avoid tax and has started investigating.

HMRC is aware of schemes that claim to avoid the 2019 loan charge on disguised remuneration and that users are being told they can sign documents saying that the sums they’ve received from their disguised remuneration scheme under loan agreements are not loans at all but instead, these sums of money are merely held by them in a ‘fiduciary capacity’.

HMRC have stated that these schemes don’t work and that it’s wrong to claim that the loan charge won’t apply because the sums received aren’t loans. The loan charge will apply to more than just loans, including any form of credit or other right to a payment regardless of what it’s called.

HMRC are advising that the only way to avoid the new loan charge in 2019 is by making a repayment of the loan balance or settling the tax liability with HMRC in advance. Taxpayers who are already speaking to someone at HMRC the use of a disguised remuneration scheme should contact them or otherwise email: exitsteam.counteravoidance@hmrc.gsi.gov.uk.

View Spotlight 39.

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