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<p>Disguised Remuneration (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. The loans are provided on terms that mean they are not repaid
in practice, so they are no different to normal income and are, and always have been,
taxable.</p><p> </p><p>For both employers and individuals, late payment interest will
be applied in the normal way, and is payable at the rates which are published by HMRC,
currently 3.25%. However, where people settle with HMRC, and have taken reasonable
care, they will not pay any penalties for inaccuracies on their tax returns.</p><p>
</p><p>The charge on DR loans is expected to raise £3.2bn for the exchequer. The majority,
75%, is expected to come from employers rather than individuals. The best option for
those individuals who are worried about the introduction of the charge on Disguised
Remuneration loans is to come forward and speak to HMRC as soon as possible. They
will work with all individuals to reach a manageable and sustainable payment plan
wherever possible.</p><p> </p><p>HMRC has put special arrangements in place so that
they are able to agree a payment plan of up to five years automatically for those
with income below £50,000 and seven years for those with income below £30,000 where
those scheme users are no longer engaging in tax avoidance. HMRC may be able to offer
a longer payment plan for those that need more than five or seven years, or with income
over £50,000, where further information is provided.</p>
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