First, the good news: HMRC has refunded millions of pounds to taxpayers who paid its controversial loan charge.
Now the bad news: only a fraction of those who applied for a refund have actually received any money. This means hundreds of taxpayers face waiting a lot longer for their cash.
To put some more flesh on the bones of this story, we can tell you that HMRC has so far refunded (or waived) £3.6m to 50 taxpayers who paid the loan charge, at an average of £72,000 each. As of April 2021, HMRC had received almost 1,850 applications for a refund so there is some way to go before this is all sorted out. This news comes courtesy of the Daily Telegraph, who submitted an FOI request to get at the information.
The background, which you can see on some of our previous blog posts, is that in 2019 the Government commissioned a review of the loan charge scheme, designed to tackle tax avoidance. This resulted in a narrower scope under which HMRC could demand more tax be paid because under the new rules anyone who had entered into so-called “disguised remuneration schemes” before December 2010 was exempt from the charge, meaning some taxpayers were due a refund.
If you think you may be entitled to a refund and are unsure how to go about it, please do get in touch and we'll help you.
Please note that the loan charge still applies to anyone who entered into the schemes from 2011 without declaring them.
Vivian Linstrom, M&S Accountancy & Taxation