What is the 2019 Loan Charge?

The 2019 Loan Charge was introduced by the Finance (No. 2) Act 2017. It is a tax charge on “employment related taxable loans made by third parties on or after 6 April 1999 brought within Part 7A ITEPA 2003 if they remain outstanding on 5 April 2019” (ref HMRC guidance).

Part 7A was introduced with the Finance Act of 2011 (December 2010). Therefore, to apply this to loans going back to 1999 is, by even the most layman terms, retrospective taxation. Furthermore, the loan charge legislation itself was clearly not in existence until 2017 (date of Royal Assent).

ATO foreign claim

Some of those affected have begun to receive correspondence from the ATO for an Accelerated Payment Notice (APN) issued by HMRC. The information may include the following:

Enclosed is a notice pursuant to subsection 263-30(2) of Schedule 1 to the Taxation Administration Act 1953 (“the Act”), notifying you of the particulars of a foreign revenue claim that has, pursuant to section 263-25 of Schedule 1 to the Act, been registered in the Foreign Revenue Claims Register.

If you have received anything from ATO like this, please contact us!

Loan Charge in the media

There has been plenty of press about the punitive 2019 Loan Charge and the disastrous effect it will have on contactors and their families. Here’s a collection of useful links for some context.

• Loan Charge Action Group
• The House of Lords condemn the Loan Charge: Report
• Early Day Motion: 118 (and counting!) UK MPs support making loan charge prospective (not retrospective)
• Ross Martin: MPs and Lords question the loan charge
• Financial Times: Living in the shadow of a tax scandal
• Contractor UK: Judicial Review launched against the Loan Charge
• The Independent: Contractors facing huge tax bill launch legal action against HMRC alleging human rights breach
• STEP: Contractors fight loan charges on human rights grounds
• Financial Times: HMRC tax crackdown victimises easy targets
• BBC: Taxpayers treated unfairly by HMRC, says House of Lords report
• Lords Select Committee: Taxpayers treated unfairly by HMRC, peers find
• The Independent: ‘Unfair’ taxman under fire over rules that may bankrupt a social worker, but MPs are at fault too
• Accounting Web: Lords call for urgent loan charge review
• IPSE urges chancellor to drop retrospective loan charges
• Iain Dale: How Can HMRC Defend Retrospective Taxation Going Back 20 Years?
• Iain Dale: The Loan Charge Scandal: Why The Treasury Must Embark on a U-turn
• Loan Charge Action Day (YouTube)
• Loan Charge concerns by Peter Bone MP (YouTube)
• Good Morning Britain: Tax avoidance (YouTube)