Disguised Remuneration Loan Charge deadline arrives

29 September 2020

Individuals who are subject to the loan charge, who have not yet filed their tax return, or agreed a settlement with HMRC, need to ensure that they submit their Self-Assessment tax return for the year 2018-19, by 30 September 2020, to avoid receiving penalties for late filing and payment.

Impacted taxpayers had the choice of either submitting their 2018-19 return by 31 January 2020 providing a rough estimate of the tax due, or to file by 30 September 2020. There is a requirement for them to disclose the full details of their outstanding disguised remuneration loans and to record them in the relevant boxes as taxable income.

Any penalties associated with late filing and payment for the 2018-19 tax return will be waived by HMRC on the proviso that it is filed no later than 30 September 2020. Late payment interest will not be attached to the outstanding tax for the period between 1 February 2020 and 30 September 2020, as long as a complete and accurate return is filed, with the associated tax paid, or an arrangement made with HMRC to do so by 30 September 2020.

Disguised remuneration schemes are arrangements in which payments are made as loans as opposed to normal income, to avoid the associated tax and National Insurance contributions. The Loan Charge was introduced by HMRC in a bid to tackle the use of schemes of this nature.


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