7
Budget 2020
Loan Charge review The Loan Charge tackles disguised remuneration tax avoidance schemes. These are tax arrangements that seek to avoid income tax and NICs by paying income to individuals in the form of loans, usually via an offshore trust, with no expectation that the loans will ever be repaid. The charge applies to any loans made through disguised remuneration schemes after 6 April 1999, which had not been repaid by 5 April 2019. y y It will now only apply to outstanding balances of disguised remuneration loans made between 9 December 2010 and 5 April 2019 inclusive. y y It will not apply to loans made in tax years before 2016/17 where a reasonable disclosure of the use of a disguised remuneration tax avoidance scheme was made within the relevant tax return or associated documents where appropriate, and HMRC failed to take any action (for example by opening an enquiry). y y Those affected by the Loan Charge will be able to elect to split their loan balance over three consecutive years 2018/19 to 2020/21 (rather than the full charge arising in 2018/19). y y The date by which the additional information form must be returned to HMRC will move from 1 October 2019 to 1 October 2020. The form requires taxpayers to provide full information to HMRC relating to any outstanding disguised remuneration loans for which they will need to make tax payments. Draft legislation has been issued to amend the scope of the Loan Charge:
National Insurance 2020/21 Class 1 (employed) rates
Employee
Employer
%
%
Earnings per week
Earnings per week
Up to £183
0
Up to £169
0
£183.01 - £962
12
Over £169
13.8
Over £962
2
Entitlement to contribution-based benefits for employees retained for earnings between £120 and £183 per week. The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £962 per week.
On employee taxable benefits
13.8%
Class 1A (employers)
On PAYE Settlement Agreements
13.8%
Class 1B (employers)
Flat rate per week
£3.05
Class 2 (self-employed)
£6,475 per annum
Small profits threshold
Flat rate per week
£15.30
Class 3 (voluntary)
On profits between £9,500 - £50,000
9%
Class 4 (self-employed)
2%
Excess over £50,000
Made with FlippingBook HTML5