In The Queen (on the application of Iain Clamp and Jeremy Beck) v HMRC [2021] EWHC 2360, the Court of Appeal dismissed an application for judicial review of HMRC’s decision to deny a request to reinstate loans repaid to avoid the Loan Charge and allow them to be redrawn without a tax charge.

Mr Clamp had participated in an Employee Benefit Trust tax planning scheme whereby he and his wife had received loans totalling £1,885,000 prior to the introduction of the Part 7A ITEPA 2003 Disguised Remuneration anti-avoidance rules on 9 December 2010.

The Court of Appeal dismissed the application for Judicial review. HMRC did not have the power to agree to Mr Clamp’s proposals therefore their decision not to agree to them could not be an illegal decision.


Mr Clamp will not be alone in having hastily repaid loans to avoid the loan charge only to find that those loans then fell out of scope of the charge due to the date they were taken. His former colleague Mr Beck was in the same position but chose to settle his position with HMRC withdrawing from the Judicial Review proceedings.

Whilst it may seem harsh that such taxpayers will now face a tax charge that could have been avoided had the Loan Charge review been concluded earlier or differently, anyone taking advice should have been aware that redrawing their loans would result in a Part 7A tax charge and that, even if they did avoid the loan charge, this would not be the end of HMRC’s attempts to subject their loans to tax.

Useful guides on this topic

Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?

Disguised remuneration 2020 settlement opportunity
What is HMRC's position on disguised remuneration loans where settlement was not reached by 30 September 2020? Can a settlement still be reached?

FAQs for Disguised Remuneration Settlements
Can I just repay my loans? Which is cheaper: the loan charge or settling? How much will it cost to settle? And many other FAQs.

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External link

The Queen (on the application of Iain Clamp and Jeremy Beck) v HMRC [2021] EWHC 2360 

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