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<p>The Loan Charge was announced at Budget 2016 as part of a package of measures to
tackle Disguised Remuneration (DR) tax avoidance. At Spring Statement 2022, this package
was estimated to bring in an estimated overall Exchequer yield of £3.4 billion. The
changes resulting from the 2019 independent review of the Loan Charge have reduced
the Exchequer yield by an estimated £620 million.</p><p> </p><p>HMRC will go to the
employer to settle the tax due or collect the Loan Charge in the first instance. Approximately
80 per cent of the £3.4 billion HMRC brought into charge through DR settlements between
Budget 2016 and the end of March 2022 was from employers.</p><p> </p><p>However, liability
for the tax is always that of the individual and HMRC will consider other options
when collection from the employer is not possible, such as when the employer no longer
exists or is based offshore. Parliament has provided a range of statutory powers allowing
HMRC, in certain circumstances, to collect the amount due from the employee.</p><p>
</p><p>HMRC’s lawyers considered all of these points when providing legal advice that
informed this policy’s development.</p>
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