New independent review launched into the UK’s Loan Charge
New independent review launched into the UK’s Loan Charge

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The UK government announced a new independent review of the controversial Loan Charge, aiming to address unresolved issues and provide clarity for those affected by the policy.
The Loan Charge, first announced in 2016, was designed to tackle the historical use of contrived tax avoidance schemes that seek to avoid charges of income tax and National Insurance by disguising remuneration as a form of non-taxable payment, typically a loan.
These schemes have existed since at least the mid-1990s and have been considered by the courts. In the most notable case in 2017, the Supreme Court agreed with HMRC that schemes that redirect earnings and ultimately pay them in the form of loans do not succeed in avoiding tax.
Exchequer Secretary to the Treasury James Murray confirmed the review on 23 January. The review will be led by Ray McCann, former President of the Chartered Institute of Taxation.
More recently, in 2022, the Court of Appeal confirmed that even where other parties (such as employers or agencies) have obligations to operate PAYE, the liability for income tax is that of the employee.
The government has recognised the court decisions and maintains that those who avoided paying the correct amount of tax and National Insurance should resolve their liabilities with HMRC. However, concerns persist over the financial burden faced by some individuals affected by the Loan Charge including the size of liabilities owed by some of those affected and their ability to pay the tax that they owe in a reasonable timeframe.
“Today, we honour our commitment to launch an independent review of the Loan Charge, bringing the matter to a close for those affected while maintaining fairness for all taxpayers,” Exchequer Secretary to the Treasury, James Murray said in a press release yesterday.
The new independent review aims to bring the matter to a close for those affected while ensuring fairness for all taxpayers and that appropriate support is in place for those subject to the Loan Charge. McCann will review the barriers preventing those subject to the Loan Charge from resolving with HMRC and recommend ways in which they can be encouraged to do so.
“The controversy surrounding the Loan Charge has for too long acted as a barrier to bringing matters to a close for both the individuals involved and for HMRC,” McCann said. “I was pleased to be asked to help find ways whereby those involved can reach an agreement with HMRC that balances their right to be treated fairly with the expectation of the vast majority of taxpayers who have paid all of the tax and NIC due on their earnings. My review will be entirely directed to that end.”
Contractor tax and compliance specialist, Qdos, has welcomed the news.
“This is a big moment for tens of thousands of contractors and freelancers who were lured into working through tax avoidance schemes and hit with devastating tax bills as a result of the Loan Charge,” Qdos CEO, Seb Maley, said in a press release. “The charge itself has been a grave injustice. Rather than holding the promoters of the tax avoidance schemes accountable, the previous government handed the workers with eye-watering tax liabilities.”
The review was first announced at the Autumn Budget 2024. The reviewer will present their final report to the Exchequer Secretary to the Treasury by summer of 2025.