Spotlight 49 – schemes claiming to avoid the loan charge
11 March 2019
- HMRC stands firm that no scheme arrangement which claims to avoid the 2019 loan charge works
- Any scheme claiming to avoid the loan charge is tax avoidance
- HMRC warns about any scheme which includes any of the following features;
- Schemes which may have professional marketing material or websites
- Schemes which claim that by entering into a scheme disguised remuneration loans will be paid off
- Schemes marketed from an off-shore location such as Cyprus, Malta or the Isle of Man
- Schemes claiming to be non-disclosable under DOTAS regime
- Schemes which may advertise having a QC opinion
Aspire Comment
HMRC has published Spotlight 49 which details the government’s awareness of schemes which claim to avoid the 2019 loan charge on disguised remuneration.
HMRC’s view is that the loan charge legislation captures these schemes as the legislation disregards any non-monetary repayments as well as excluding any repayments connected to a tax avoidance arrangement. In summary, HMRC remains of the view that an outstanding loan balance will be subject to the 2019 loan charge.
The Spotlight advises that anyone using these schemes should withdraw and settle their tax affairs to avoid the cost of investigation and minimise interest and, where applicable, penalty charges on the tax that should have been paid.
Read our previous news item on HMRC Spotlight 48, here.