Loan charges – warning – HMRC takes action
23 May 2019: It has been reported that six people have been arrested over the promotion of fraudulent schemes that were designed to avoid paying loan charges.
Disguised remuneration loans received by employees that remain outstanding on 5 April 2019 are known as loan charges, on which HMRC have been asking for tax to be paid.
The six arrested had been promoting a scheme in which to evade paying the tax on the loan charges. HMRC are encouraging individuals not to use such schemes as they do not work. Individuals risk losing more money and could be criminally prosecuted for being involved in fraud.
As many as 50,000 people caught up in the issue are low paid people, such as nurses and social workers, who were persuaded by their employers to join the schemes. Some are now facing personal bankruptcy. So far, HMRC has settled some 6,000 cases, receiving around £1bn, of which 85% has come from employers.
The government estimates that it will claw back an extra £3.2bn over the next five years from employers and employees caught up in disguised remuneration schemes.
If you or your clients have been caught up with such schemes and are facing financial difficulty as a result, please speak to any one of BRI’s experienced management team.