Loan Charge reporting deadline is approaching

18 August 2020: The deadline for reporting disguised remuneration loans that are subject to the Loan Charge is 30 September 2020, ICAEW reminds members. HMRC has also published guidance on refunds of voluntary payments.

Outstanding disguised remuneration loans that are subject to the Loan Charge must be reported to HMRC by 30 September 2020. This must be done using the online form as well as on the 2018/19 self assessment tax return. Anyone who wants to spread their outstanding disguised remuneration loan charges across the 2018/19, 2019/20 and 2020/21 tax years also needs to do so by 30 September 2020, using the same online form.

Any employer subject to the Loan Charge in respect of outstanding loans made to employees or former employees that has not yet reported and accounted for what they owe, or that needs to change the information they have submitted, must do so now.

Following the recommendations in the Independent Loan Charge Review, certain voluntary payments (‘voluntary restitution’) made as part of a disguised remuneration settlement with HMRC can be refunded. The voluntary payments that can be refunded are those made on or after 16 March 2016, in relation to loans made in unprotected years. An unprotected year is one where HMRC did not take action to protect the year: for example, by opening an enquiry. HMRC has published guidance about which voluntary payments can be refunded and how the scheme works.

The Tax Faculty recommends that any taxpayer affected by the Loan Charge should seek independent advice.

HMRC can be contacted on 03000 599110 or by email: ca.loancharge@hmrc.gov.uk.