As explained in an earlier article, at the Autumn Budget 2025, the government published the findings from, and its response to Ray McCann’s independent review of the loan charge. The government accepted almost all the recommendations made by McCann and said it would go further in some instances. HMRC has now published a paper setting out how it intends to deal with taxpayers following the conclusion of the review.

Settlement terms

The paper explains the key features of the new settlement opportunity. These include that the new settlement amount: 

• Will be calculated based on the tax rates applying for the years in which the loans were made, rather than at the rates applying to the loan charge and all other income in 2019.
• Will be reduced:
  • to account for historic promoter fees, up to a maximum discount of £10,000 per year that the taxpayer used a loan scheme; and
  • by a further £5,000, reducing the liability to £nil for some taxpayers.
• Will not include late payment interest. HMRC says that this will reduce the amount that many taxpayers could pay by around 20%. 

The maximum reduction for any one taxpayer is limited to £70,000 against the loan charge amount they would otherwise owe, including interest.  

In addition: 

• Penalties will not be charged as standard.
• Any inheritance tax already due because of the use of loan schemes covered by the settlement will be written off.
• HMRC will agree a bespoke payment arrangement where the taxpayer is unable to pay the new amount in full immediately.  

The new settlement opportunity is open to anyone with outstanding loan charge liabilities, including employers. However, promoters will not be able to benefit from these settlement terms for their own tax affairs. 

HMRC contact 

In the first half of 2025, HMRC wrote to taxpayers affected by the loan charge. The letters explained whether the arrangements used by the taxpayer would be considered by the review and gave the details of a named HMRC contact.  

HMRC has now begun the process of writing to taxpayers to explain if and how their position is affected by the review. If the taxpayer’s circumstances fall within the recommendations of the review accepted by the government, the taxpayer will be sent an invitation at a later date to settle at a reduced amount.  

HMRC says that the taxpayer can contact HMRC to let HMRC know that they are interested in settling their tax position under the new terms. The paper explains that it may be helpful for the taxpayer to provide supporting information, such as the names of the disguised remuneration arrangements used. The taxpayer should contact their named HMRC contact. For other general disguised remuneration enquiries, the taxpayer can contact HMRC on 0300 322 9420.