Produced by Tolley
  • 25 Feb 2022 15:53

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Loan charge
  • Overview of the loan charge
  • What is the loan charge?
  • What amount is taxable?
  • Implications for individuals and employers
  • If the employer is in the UK and in existence
  • If the employer is offshore or not in existence
  • Summary of steps required and deadlines

Loan charge

Overview of the loan charge

In 2017, legislation was introduced to impose a ‘disguised remuneration’ charge upon loans from ‘employee benefit trusts’ (EBTs), ‘Employer-Financed Retirement Benefits Schemes’ (EFRBS) and similar arrangements. This is also known as the ‘loan charge’. It originally applied to any individual who received a loan (with a few limited exceptions) via a disguised remuneration scheme on or after 6 April 1999 that was still outstanding on 5 April 2019, but its scope has been limited following the independent review of the loan charge (see below and the Outcome of the independent loan charge review guidance note).

For an introduction to disguised remuneration, see the Disguised remuneration ― overview guidance note.

This guidance note looks at some of the practical implications of the loan charge for employees and employers and how tax liabilities are to be assessed and reported.

For the practical considerations of ‘contractors’ who were in employment-based umbrella company loan arrangements, see the Low Incomes Tax Reform Group (LITRG)’s guidance.

See also The Chartered Institute of Taxation (CIOT)’s article published on 16 September 2019, which covers the loan charge topic.

In September 2019, the Government commissioned Sir Amyas Morse to lead the Independent Loan Charge Review. Sir Amyas was asked to consider whether the policy is an appropriate response to the tax avoidance behaviour in question and whether the changes the Government has announced to support individuals to meet their tax liabilities have addressed any legitimate concerns raised.

On 20 December 2019, the Government released a copy of the Loan

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

There's no margin for error. Think Tax.
Think Tolley.

TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.

TAKE A FREE TRIAL

Popular Articles

Dividend waivers

In certain circumstances shareholders may wish to pay dividends other than in proportion to their shareholdings. This aim is typically achieved by one or more shareholders not taking a dividend when it is declared. To effect this, the relevant shareholders must waive their right to dividends from

21 Mar 2022 07:28 | Produced by Tolley Read more Read more

Patent box tax regime ― overview

Introduction to the regimeThe aim of the patent box regime is to provide an incentive for companies to develop and retain patents and other qualifying intellectual property within the UK as part of the Government’s growth agenda. Finance Act 2012 originally introduced the legislation governing the

06 Apr 2022 17:11 | Produced by Tolley Read more Read more

Definition of a close company

The detailed definition of a close company is set out below but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, most owner-managed or private family businesses will be

21 Mar 2022 07:22 | Produced by Tolley Read more Read more