Taxpayers who owe money to HMRC as part of disguised remuneration loan charge schemes can settle with the taxman on the terms offered before the rules changed in 2017.
In an official notice out yesterday (April 15) the taxman stated that taxpayers can still pay the loan charge debt on the same terms as were offered in November 2017, before the loan charge rules formally came into law, as long as they declared the tax avoidance scheme to HMRC by April 5.
Taxpayers do not have to settle the amount before April 5 to qualify for treatment under the old rules.
The old rules mean taxpayers pay a lower rate of tax on the disguised remuneration and will not have to pay the extra charge, which came into effect on April 5.
With the loan charge, which was approved by Parliament via the 2017 Finance Bill, HMRC was authorised to pursue individuals and companies that engaged in "disguised remuneration" schemes going back to 1999.
Members of such schemes were paid via loans rather than salary, and so did not pay tax. The loans were also never intended to be repaid, leading to HMRC treating the issue as 'tax avoidance'
The loan charge means people are expected to either repay the loans or pay income tax on them dating back 20 years.
HMRC expects to raise £3.2bn from the loan charge, with two thirds of that total coming from employers.
There have been claims the loan charge hits less wealthy people disproportionately but HMRC has disputed this.
MPs have also criticised the 'retrospective' nature of the charge but HMRC’s view is that it is not applying the charge retrospectively, because the loans remain unpaid in this tax year.
Those who earn less than £30,000 have seven years to pay.