04 Mar 2020
HMRC has published details of proposed legislation for administering refunds to taxpayers who made voluntary payments prior to settling the loan charge.
The loan charge, which came into effect on 6 April this year, added a 45% non-refundable charge on all loans advanced through schemes, unless the individual had agreed with HMRC to settle their tax affairs by 5 April. The charge affects at least 50,000 people who used loan-based avoidance schemes.
Following last year's review into the charge, the government agreed that HMRC should repay certain voluntary payments made following the announcement of the loan charge in March 2016.
HMRC has now published the draft scheme documents setting out the eligibility criteria for claiming a refund. The criteria includes the process for repaying or waiving payments and how variations to settlement agreements, and any consequent refunds, will be calculated.
However, the tax authority said that refunds can only be issued after Finance Bill 2019/20 has received Royal Assent.
If you would like to discuss the matter further, please do not hesitate to contact us.