Finance Bill 2017 introduces more rules to target disguised remuneration, including a charge on all remaining untaxed loans and extending the rules to the self-employed and partners.

At Budget 2016 the Government announced a package of changes to tackle perceived abuse of the disguised remuneration rules.  Some of these were include in Finance Act 2016, including a targeted anti-avoidance rule and the withdrawal of transitional relief.

The draft Finance Bill 2017 includes most of the remaining changes announced.  The main ones being:

  • A new tax charge on all untaxed disguised remuneration loans (whenever granted) still outstanding at 5 April 2019.
    • Parties to such loans should start considering their options regarding repayment if they are to avoid a charge.
  • The extension of the disguised remuneration rules to the self employed and partners:
    • From 6 April 2017 a charge will arise if they seek to lower their trading income by diverting money which is ultimately received back as a loan or other non-taxable amount.
    • The new loan charge will also apply to self employed individuals with outstanding loans on 5 April 2019.

Finance Bill 2017 also includes measures on:

  • Loan transfers and loans to close company participators.
  • Charges arising from payments to HMRC.
  • Release of disguised remuneration loans.
  • Employer deductions.

The final measure announced in Budget 2016 (transferring liability to individual employees) will be consulted on in early 2017.


Our subscriber guide: Disguised remuneration

HMRC’s consultation documents on these changes can be found here