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<p>The charge on disguised remuneration (DR) loans will apply to outstanding DR loan
balances on 5 April 2019. It is targeted at artificial tax avoidance schemes where
earnings were paid in the form of non-repayable loans made by a third party. 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>The Government
estimates that up to 50,000 individuals will be affected by the 2019 loan charge.
Information is not held at constituency, borough or regional level.</p><p> </p><p>Since
the announcement of the 2019 loan charge at Budget 2016, HMRC has now agreed settlements
on disguised remuneration schemes with employers and individuals totalling over £1
billion. Pay As You Earn (PAYE) liabilities fall on the employer in the first instance.
The charge on DR loans does not change this principle and the employee will only be
liable where the amount cannot reasonably be collected from the employer, such as
where the employer is offshore or no longer exists. Around 85% of the settlement yield
since 2016 is from employers, with less than 15% from individuals. HMRC will never
force somebody to sell their main home to pay for their DR debt, or the loan charge.</p><p>
</p><p>HMRC is working hard to help individuals get out of avoidance for good and
offer manageable and sustainable payment plans wherever possible. It carefully considers
each case and there is no maximum limit on how long a customer can be given to pay
what they owe. HMRC considers a customer’s ability to pay on a case by case basis
and decisions are based on each individual’s personal circumstances.</p><p> </p><p>HMRC
has simplified the process for those who want to settle their use of DR schemes before
the loan charge arises. DR scheme users who currently have an income of less than
£50,000 and are no longer engaging in tax avoidance can automatically agree a payment
plan of up to five years without the need to give HMRC detailed information about
their income and assets. This arrangement has been extended to 7 years for scheme
users who have an income of less than £30,000.</p><p> </p><p>Anybody who is worried
about being able to pay what they owe should get in touch with HMRC as soon as possible.
They have a number of ways to help those who are genuinely unable to make a full payment
of tax on time, for example, by arranging payments by instalments.</p>
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