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<p>The 2019 loan charge is targeted at disguised remuneration (DR) schemes. These
are artificial tax avoidance schemes where earnings are paid in the form of non-repayable
loans made by a third party.</p><p> </p><p>DR schemes are contrived arrangements that
pay loans in place of ordinary remuneration with the sole purpose of avoiding income
tax and National Insurance contributions. When taking into account the loan they received,
loan scheme users have on average twice as much income as the average UK taxpayer.</p><p>
</p><p>Since the announcement of the 2019 loan charge at Budget 2016, HMRC has agreed
settlements on disguised remuneration schemes with employers and individuals of over
650 million pounds. More than 90% of this amount was collected from employers, with
less than 10% from individuals.</p><p> </p><p>HMRC have also simplified the process
for those who choose to settle their use of avoidance schemes before the charge arises,
so that those earning less than £50,000 a year and no longer engaging in tax avoidance
can agree a payment plan of up to five years without the need for detailed supporting
information. There is no maximum period within which an overall settlement can be
agreed, and HMRC will deal with individual cases appropriately and sympathetically.</p><p>
</p><p>50,000 individuals are estimated to be affected by the introduction of the
DR loan charge across the UK. Information is not held at constituency level.</p>
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