HM Revenue and Customs (HMRC) has published a briefing detailing its operational activities in response to the recent independent review of the Loan Charge.
The government’s official response to the review was included in Budget 2025, with further clarification offered by HMRC on how it plans to engage individuals who have used disguised remuneration tax avoidance schemes.
The briefing explains new settlement opportunities and references legislative updates found in the current Finance Bill, aiming to clarify the next steps for taxpayers affected by these measures.
Background to the Loan Charge
The Loan Charge was introduced to address the widespread use of disguised remuneration schemes, where individuals received income in the form of loans rather than regular earnings to reduce tax liabilities.
These arrangements were commonly used by contractors and some employees over several years. HMRC began pursuing these cases as part of a wider effort to close tax avoidance loopholes and ensure fairness across the tax system.
Findings of the independent review
The independent review was commissioned to evaluate the fairness and effectiveness of the Loan Charge legislation. According to the government’s published response in Budget 2025,
the review recognised the complexity of affected cases and called for tailored solutions to address various taxpayer circumstances. The review underscored the need for HMRC to improve engagement and clarity for those wishing to settle.
HMRC’s operational response
Following the review, HMRC has outlined new operational practices intended to provide clearer guidance and more support to taxpayers impacted by the Loan Charge. Priority will be given to improving communication and transparency in the settlement process.
An HMRC spokesperson stated the aim is to ensure “customers are fully informed of their options and obligations”, referencing the push for accessible information.
Settlement opportunities for taxpayers
The briefing highlights a new settlement opportunity for affected individuals, reflecting recommendations from the independent review. Details of the process are provided in an accompanying technical note, which explains the criteria for eligibility and the procedures for reaching a resolution with HMRC.
Taxpayers who used disguised remuneration schemes are encouraged to review their circumstances and consider engaging with HMRC to settle outstanding liabilities under the updated arrangements.
Legislative developments in the Finance Bill
Legislative changes supporting the revised approach to the Loan Charge have been incorporated into the most recent Finance Bill. These amendments aim to clarify the legal framework surrounding settlements and provide statutory backing for HMRC’s new operational activity.
The updates reflect the government’s commitment to addressing concerns raised by the independent review and to implementing a fairer process for all parties involved.
Final Summary
The publication of HMRC’s operational response represents a significant development in the administration of the Loan Charge.
By introducing new settlement opportunities and legislative changes aligned with recommendations from the independent review, HMRC aims to provide greater clarity and improved outcomes for taxpayers who participated in disguised remuneration schemes.
The situation continues to evolve, with both government and stakeholders monitoring the effectiveness of these changes. For users seeking regular updates on tax policy, digital tools such as the Pie app offer useful resources for keeping informed.
