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<p>The 2019 loan charge is targeted at artificial tax avoidance schemes where earnings
are paid in the form of non-repayable loans made by a third party - “disguised remuneration”
(DR) schemes.</p><p> </p><p>DR schemes are clear examples of contrived tax avoidance.
It is not normal, or indeed reasonable, to be paid in loans that are unlikely ever
to be repaid. It is an individual’s responsibility to ensure they pay the right amount
of tax and to understand the consequences of engaging in tax avoidance.</p><p>It is
unfair to ordinary taxpayers to let anybody benefit from contrived tax avoidance of
this sort, and that is why this Government has taken action to ensure that everybody
pays the taxes they owe. The announcement of the loan charge at Budget 2016 provided
scheme users with a three-year period to repay their DR loans, or to agree a settlement
with HM Revenue and Customs (HMRC) before the charge takes effect.</p><p> </p><p>50,000
individuals are estimated to be affected by the introduction of the DR loan charge
across the UK. It is estimated that less than 0.1% of the population of Wales will
be affected. Information is not held at constituency level.</p><p> </p><p>The impact
of the DR loan charge on these individuals was considered at Budget 2016, when the
measure was first announced. <sub></sub>HMRC consulted on the measure in August 2016.
The latest tax information and impact note (TIIN) can be found at: <a href="https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update"
target="_blank">https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update</a></p><p>
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