Discovery Assessments issued by HMRC in respect of the Disguised Remuneration Loan Charge

Insight /  4 May 2023

HMRC has issued a number of tax and NIC assessments to taxpayers and/or their employers prior to 5 April 2023 in respect of loan charges relating to the 2018/19 tax year. They have issued these to avoid becoming time-barred from collecting additional tax due.

What is the loan charge?

The April 2019 Loan Charge is a tax charge that applies in certain conditions where, as of 5 April 2019, loans were outstanding from arrangements caught by the disguised remuneration rules (i.e. rules which were enacted to stop schemes which provided employment income to employees which sought to avoid tax and NIC). Under these rules you are considered to have disguised remuneration loan when you receive payment for work or services in the form of a loan or other form of credit in a way that means it is unlikely to be repaid.

Why has HMRC issued the statements now?

With these assessments, HMRC is seeking to address taxpayer non-compliance with the loan charge. This includes, for example, where the loan charge may have been fully omitted from an individual’s tax return, where HMRC disagrees with the value entered or where there is a conflict over whether the employer or employee should be liable to pay the additional tax.

What if some or all of the tax and NIC has been paid?

There may be additional liabilities which may be in scope (where the tax on the loans has not been repaid to the employer), as well as interest and potential penalties, depending on the circumstances.

What do I need to do now?

Our employment taxes team is handling a number of these cases for clients, some of which involve complex historical arrangements. We are engaging with HMRC to appeal against the assessments whilst the technical position, along with any historical settlements, is considered. Regardless of your circumstances, you should seek professional advice in respect of these assessments, as failure to submit a timely appeal or deal with them, could mean that you will need to settle the tax and NIC involved.

If you would like to discuss how we can help you, or have any other employment taxes related query, please get in touch with us at

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