Loan charge to remain in force pending the outcome of the Government's review

Commenting on the publication of the Terms of Reference for the Treasury's review into the loan charge, George Bull, senior tax partner at RSM said:

'It seems likely that the Treasury were caught on the hop by the Prime Minister's announcement last week of a review into the loan charge, and they are now racing to play catch-up.

'The Government clearly recognises the urgency of completing this review quickly and has given Sir Amyas Morse a deadline of mid-November in order to provide some clarity to those affected ahead of the January Self Assessment deadline.

'While many campaigners have been pushing for this review, they will be disappointed that the loan charge hasn’t been put on hold pending the outcome. The terms of reference make it clear that the loan charge remains in force.

'It's very important for those subject to the loan charge to follow the published advice. In essence, those who have already settled should do nothing, those who have settled and are paying by instalments should continue to do so. 

'Those who have provided all the required information by 5 April 2019 and are waiting to finalise a settlement can continue to do so if they wish. However, HMRC has indicated that they may wish to wait for the Government's response to the review before settling.  

'Any taxpayer whose liability to the loan charge changes as a result of the Government response to the review will be updated about next steps in due course.

'Importantly, this review will look at the retrospective nature of the loan charge which has led to so much criticism from those affected, and from the tax profession. 

'The outcome of this review will not only impact those subject to the loan charge. It is also likely to inform how HMRC tackles tax avoidance in the future.'