"The UK government has committed to wiping thousands of pounds off the outstanding settlements of everyone who remains in scope of the Loan Charge, in response to the latest independent review into the controversial disguised remuneration policy. The retroactive tax policy has left thousands of IT contractors living under the shadow of life-changing tax bills since it came into force in April 2019, who previously participated in loan-based remuneration schemes between December 2010 and April 2019."
"Scheme participants are typically paid in part for the work they do in the form of non-taxable loans, allowing those involved to bolster their take-home pay. The Loan Charge policy was introduced to recoup the tax scheme participants avoided paying. However, the policy's critics claim the policy fails to take into account that, before and during the time period the Loan Charge covers, many of these schemes were mis-sold to participants."
Thousands of individuals who used loan-based remuneration schemes between December 2010 and April 2019 face reduced outstanding Loan Charge settlements by thousands of pounds. The Loan Charge is a retroactive tax aimed at recouping unpaid tax from disguised remuneration schemes that paid contractors partly through non-taxable loans. Critics say many schemes were mis-sold as HMRC-compliant. The government commissioned an independent review starting with a March 2025 call for evidence. The review made nine recommendations to enable settlements with HMRC, proposing a structured approach using standard adjustments to suspend parts of current liabilities.
Read at ComputerWeekly.com
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