Loan charge: HMRC urges thousands of people to take advantage of settlement scheme
Thousands of people and employers with outstanding loan charge liabilities are being invited to take advantage of a new settlement scheme that could reduce their bills by up to £70,000, HMRC has said.
It will see most customers’ bills reduced, with around a third able to settle without paying anything at all, according to HMRC.
The statement said: “HM Revenue and Customs (HMRC) is writing to eligible customers and is asking anyone who receives a letter from their caseworker to respond as soon as possible.
"These arrangements can be complicated and take some time to work through, which is why every customer has a named contact they, or their agent, can speak to.
Jonathan Smith, Director of Counter Avoidance at HMRC, said: “We want to help people draw a line under their loan charge liability and reach a resolution – but that can only happen if you talk to us.
"Some people will see their bills reduced to zero and that is why we need them to engage with us. Our message is simple: get in touch so we can help you resolve this. You don’t have to wait for your letter from us - you can contact your named caseworker at any time to discuss the settlement opportunity.”
Bills could be reduced by up to £10,000 for each year a customer used an avoidance arrangement. HMRC will also remove late payment interest and apply a £5,000 reduction to every customer’s bill.
The statement added: “Customers who cannot pay in full straight away will be able to agree a payment arrangement based on what they can afford.
"Anyone who settles under the new terms can choose to pay over five years, with longer arrangements available depending on their circumstances.”
In January 2025 an independent review of the loan charge was commissioned by the government. The review was published at Budget 2025, alongside the Government’s response.
The Government said that, under the new settlement scheme, most people could see reductions of at least 50 per cent in what they have to pay. Around a third of people could be able to settle without having to pay anything at all, the Government said. Overall, the settlement can reduce what a customer owes by up to £70,000.
The loan charge settlement scheme legislation came into force last month and HMRC has begun contacting taxpayers to make settlement offers.
Ninety days is the minimum period the loan charge legislation allows for acceptance of a loan charge settlement offer. For the majority of customers HMRC will allow a longer period, the statement added.