New scheme for those with Loan Charge liabilities

Newsletter issue – October 2026

HMRC is writing to households with outstanding Loan Charge debts, offering a new Settlement Scheme that can cut liabilities by up to £70k. The scheme aims to reduce most customers' bills, and around one-third may end up paying nothing at all.

It applies to UK residents who used 'disguised remuneration' or loan schemes - arrangements where individuals were paid through loans to avoid income tax and National Insurance. The Loan Charge covers loans received after 9 December 2010 and was introduced in 2017, treating these loans as taxable income. Around 50,000 people are affected by the Loan Charge according to the Government.

HMRC has stated that it will remove late payment interest and reduce every customer's bill by £5k. Bills could be reduced by a maximum of £10k per year that an avoidance arrangement was used. Anyone agreeing to settle under this new scheme can spread their repayments over five years.