HMRC has issued Spotlight 39: 'Disguised remuneration: re-describing loans'. This features a scheme which attempts to avoid the disguised remuneration rules and the new 2019 loan charge, by claiming that amounts held are not loans.

Under the scheme:

The user is told to sign documents that confirm that sums they’ve received from their Disguised remuneration scheme under loan agreements were not loans

The documents claim that the money is merely held by them in a ‘fiduciary capacity’ and so benefit someone else.

In the Spotlight HMRC state that:

  • In their view such schemes don’t work: the documents do not change what has happened in the past.
  • Attempting to describe a loan as something else does not mean it is not a loan.
  • HMRC warn that adopting this approach and not reflecting the loan charge on a tax return may result in significant penalties and they may consider criminal prosecution if it is considered deliberately misleading.
  • HMRC advise that the only way to avoid the 2019 loan charge is to make a repayment or settle the tax liability with HMRC in advance.

An email address is provided for taxpayers who wish to get out of such schemes and who don’t already have a contact at HMRC.


Our guides:
Anti-avoidance: HMRC's spotlights
Disguised remuneration

External links

HMRC's spotlight can be found here.