HMRC have released new guidance for individuals who wish to settle their disguised remuneration loan charge liability under new settlement terms. The guidance offers advice on the new settlement scheme and HMRC will write to those who are eligible to settle under the new terms.
An Independent review of the loan charge was undertaken last year, with the Response published at the Autumn Budget 2025. Nine recommendations were made by Ray McCann, who led the review. Of these, HMRC accepted all but one of them.
Legislation was included in Finance Act 2026, with detailed regulations laid before Parliament on 15 July 2026.
The new settlement scheme applies to those who have a Disguised Remuneration loan charge liability that has not yet been paid in full. This includes any settlements agreed after 1 June 2021. It uses a simplified calculation to work out an amount that represents the tax and National Insurance due on the disguised remuneration in the tax year it was received.
Some of the new terms are:
- The settlement will be subject to a maximum reduction of £70,000.
- A reduction will be made for promoters' fees.
- A deduction of £5,000 will apply to all loan charge liabilities.
- Late payment interest and most penalties will not be included in the final liability.
- Inheritance Tax already due, or due within 90 days, will not be collected on disguised remuneration schemes where trusts were used.
Where an employer was responsible for deducting PAYE from the loan payments:
- HMRC will attempt to settle the liability with the employer if they are still in existence.
- HMRC will also write to the employee with an offer which can be accepted by the employee if either:
- The amount they owe is £0.
- They wish to settle now to avoid waiting for HMRC to try to settle with the employer.
- If the employee does not accept the offer, they will still have the opportunity to settle under the new terms at a later date if HMRC is unable to retrieve the settlement from the employer.
HMRC have already issued letters to those they believe are affected; a further letter will be issued with an offer to settle under the new terms. The letter will include:
- The amount due for settlement.
- Loan details and any other income used to calculate the settlement offer.
- The letter is an offer only and there is no obligation to settle.
HMRC will allocate a caseworker to each individual. The caseworker will be able to discuss settlement options and payment plans before any offer is accepted.
Once an offer is accepted, an acceptance form must be completed and signed, which will be legally binding. Any open enquiries will be closed thereafter.
- Even if there is nothing to pay, it is likely that HMRC will still require a formal signed acceptance of the offer and the form to be returned to them.
For those who do not accept the offer, the full loan charge liability will be due.
If an individual believes they are affected but does not yet have a caseworker, HMRC can be contacted at:
Useful guides on this topic
Loan charge and disguised remuneration
When do the disguised remuneration rules apply? How do they apply? When does the loan charge apply? What options for settlement are available?
Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?
Disguised remuneration 2020 settlement opportunity
What is HMRC's position on disguised remuneration loans where settlement was not reached by 30 September 2020? Can a settlement still be reached?
FAQs for disguised remuneration settlements
Can I just repay my loans? What if I have paid the loan charge? Can I still settle? How much will it cost to settle? And many other FAQs.
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