Independent review of loan charge: HMRC report on implementation

HMRC have issued a report on how they have delivered the 19 recommendations made by Sir Amyas Morse which were accepted by the government.  According to the report, HMRC implemented the changes to the Loan Charge which were enacted in the Finance Act 2020, which they estimate have taken 11,000 people out of paying the loan charge altogether.  They have improved their service and the tone and clarity of communications by:

  • Providing additional flexibility for taxpayers to conclude settlement, giving an additional 8 months to take appropriate advice
  • Publishing guidance and writing letters to set out what the changes mean for different groups according to their circumstances
  • Sharing draft text of communications with stakeholders for feedback prior to issuing
  • Publishing clear policies to give taxpayers confidence that they can agree a suitable payment arrangement

In writing their report, HMRC obtained feedback from HMRC’s Customer Experience Committee, representative bodies and tax charities.  In the main these stakeholders observed progress in HMRC improving guidance and communications, and positive steps to support taxpayers.  HMRC have confirmed that they will act on feedback received regarding areas where stakeholders want them to do more.

Finally, HMRC say that they are intervening early to provide targeted information to taxpayers where HMRC’s data suggest they might be using disguised remuneration schemes.  Anecdotally, that does appear to be happening in practice as we are aware of a few cases where this has taken place.  Furthermore, HMRC state that they are “bearing down” on the small number of advisers who persist in promoting tax avoidance.  Whether they are successful or not remains to be seen, and it will be very positive if they can take action against the well-known individuals who are often associated with such schemes.


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