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<p>The charge on disguised remuneration (DR) loans is targeted at artificial tax avoidance
schemes where earnings were paid via a third party in the form of ‘loans’. These loans
were paid in place of ordinary remuneration, with the sole purpose of avoiding income
tax and National Insurance contributions. In reality these loans were never repaid.
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>The Government estimates
that up to 50,000 individuals will be affected by the 2019 loan charge. HMRC has published
a breakdown of individuals affected by industry. HMRC data indicates that fewer than
3% of those affected work in medical services (doctors and nurses) and teaching. Further
information can be found at the following link: <a href="https://www.gov.uk/government/publications/loan-schemes-and-the-loan-charge-an-overview/tax-avoidance-loan-schemes-and-the-loan-charge#who-affected"
target="_blank">https://www.gov.uk/government/publications/loan-schemes-and-the-loan-charge-an-overview/tax-avoidance-loan-schemes-and-the-loan-charge#who-affected</a></p><p>
</p><p>HMRC has 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>
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