The loan charge

Why the loan charge was introduced

Some disguised remuneration arrangements paid income as loans, which individuals were not expected to pay back. The people promoting these arrangements may have said these payments were not taxable.

These are still payments of income, which means you may need to pay Income Tax and National Insurance contributions on them.

The loan charge was introduced to stop disguised remuneration arrangements where individuals received their earnings as loans, instead of as salaries or wages.

Loans covered by the loan charge

Disguised remuneration loans may come under the loan charge if all of the following conditions apply:

• the loan was made on or after 9 December 2010
• the loan was received before:
  • 6 April 2017, if you were self-employed
  • 6 April 2019, if you were an employee
• the loan was provided by a third party — for example, someone who was not the employer of the person who received the loans
• the loan was not paid back in full by 5 April 2019
• you did not settle the tax due on the loans with HMRC, by the settlement deadline of 30 September 2020

Settling your outstanding loan charge liability

You can settle your outstanding loan charge liability by using one of these settlement opportunities:

• the loan charge settlement scheme — this will be financially better for most individuals and employers
• the disguised remuneration 2020 settlement terms

Contacting us

We want to provide the right support for you through this process. Contact us and we’ll explain your options and help you understand what to do next.

You can contact your caseworker using their details in your letter. If you do not have a caseworker, you can contact us by:

• telephone: 0300 322 9494
• email: CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk

To email us, you must tell us in writing (by email or post) that you understand and accept the risks of using email — read Corresponding with HMRC by email.

You can also write to us using the following address: