HMRC loan charge deadline looms

Taxpayers who will be subject to the HMRC’s new loan charge have less than one month to settle their debts, UHY Hacker Young has warned.

Despite “major” public pressure to drop the “controversial” loan charge, HMRC has nonetheless issued a deadline of 30 Septemberfor taxpayers to either negotiate a settlement or pay the charge in full.

Following a review by Sir Amyas Morse, the Government ordered HMRC to “take a fairer approach” to those liable for the loan charge, however. 

This in turn has seen HMRC extend the deadline for payment from January to September.

In addition, HMRC has also agreed to additional measures that will make it easier for taxpayers to pay the charge and give them an incentive to cooperate, including the ability to spread the cost over three tax years. 

However, the firm has warned taxpayers that despite softening its stance over recent months, HMRC is “not going to have a last-minute change of heart about the loan charge, as unfair as many find it”.

The accountancy firm is now calling on taxpayers to “consider their own situations carefully”  when deciding whether to enter into an agreement with HMRC or pay the charge outright.

John Sheehan, partner at UHY Hacker Young, said: “Even though HMRC has taken a softer approach this year, September 30 is still the deadline that really matters. It isn’t going to change its stance further or drop the loan charge.

“If you have been caught by the loan charge, it’s important not to bury your head in the sand. The longer you leave it, the less likely you will be able to agree a settlement with HMRC.”

He added: “That means paying the charge in full and still being susceptible to further HMRC action. Taxpayers should make sure they do not make any decision on how to handle the loan charge without first seeking professional advice.”