It was announced earlier this month that the government would be forced to review its controversial loan charge plan after MPs backed an amendment to the Finance Bill tabled by former Liberal Democrat environment secretary Ed Davey.
The Chancellor will review the loan charge legislation and its effects, comparing it to other legislation relating to the recovery of lost tax, and provide a report to the House of Commons by 30 March 2019.
The loan charge has proved highly contentious, with opponents claiming it would unfairly punish tens of thousands of contractors and agency workers who had used disguised remuneration schemes. Despite the review, the legislation will not be changed and will still come into effect from 5 April 2019.
60% of people yet to receive calculations from HMRC
The Financial Times reported that tens of thousands of people caught up in the loan charge legislation are still waiting for HMRC to send final settlement bills as the April deadline approaches.
HMRC has stated that approximately 60% of people who sent the information required to calculate how much tax they owe from taking part in disguised remuneration schemes are still waiting for their calculations.
An HMRC spokesperson said: “Where an agreement has not been reached with a customer by 5 April 2019, HMRC will consider carefully whether or not to extend settlement under the existing terms. Each case will be considered on its own merits, and factors include whether or not the customer has met all HMRC’s deadlines and responded promptly to any queries and correspondence from us. If a customer has not been able to settle by 5 April solely because of error or delay on HMRC’s part, we will ensure that the customer is not disadvantaged.”
HMRC publishes loan charge factsheet
If you’re still confused about the loan charge, you can download HMRC’s new factsheet, which provides digestible information on everything you need to know about tax avoidance schemes and the charge itself.
- How loan schemes work
- The loan charge
- Who needs to pay
- Tax avoidance issues
Download your factsheet here. Additionally, if you’re concerned about the loan charge or are worried about being able to pay what you owe, you can get in touch with HMRC on 0300 530 435.
Stay tuned to the Mango Pay blog for all of the latest developments regarding the loan charge, as well as insights and opinions on all things tax-related.