Sarah Laing summarises recent changes to the ‘disguised remuneration’ loan charge provisions following recommendations made in the Amyas review.
Broadly, the ‘loan charge’ is a charge to tax on employees and traders who were paid via ‘disguised remuneration’ loan arrangements in order to minimise liability to tax and National Insurance contributions.
In general terms, any individual who received a disguised remuneration loan or credit on or after a specified date, which was still outstanding on 5 April 2019, will be liable to the charge, unless they or their employer have previously accounted for any tax due on the loan.
The need for change
When the provisions were first announced the professional bodies generally supported the underlying policy of countering tax avoidance, but also expressed concern about the potential hardship this measure would cause in certain cases, particularly at