2019 Loan charge legislation – deadline 30 September 2018

  • The 5 April loan charge will apply to third-party employment loans made since 6 April 1999
  • Details may have been reported to HMRC even if the loans have been repaid
  • There are other options: settle with HMRC before 5 April 2019 or repay the loans
  • HMRC must be approached with information before 30 September 2018 if settlement is sought before the loan charge applies

Contact us immediately if you need assistance with the above.  There is still two weeks to approach HMRC

The legislation requires an individual (or related party) who borrowed from an EBT (employee benefit trust, or similar) to repay funds before 5 April 2019.  Failure to do so will trigger income tax and National Insurance liabilities.  The loan charge rules now form part of the disguised remuneration rules.

While the disguised remuneration rules seek to apply to an action, the loan charge rules focus on a failure to take action, such as a failure to repay.  In this sense, companies, individuals, trustees and advisors should be aware that a lack of action or pretending not to notice cannot provide a means of escape from the income tax and National Insurance charge.

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