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Overview of the loan charge

In 2017, legislation was introduced to impose a ‘disguised remuneration’ charge upon loans from ‘employee benefit trusts’ (EBTs), ‘Employer-Financed Retirement Benefits Schemes’ (EFRBS) and similar arrangements. This is also known as the ‘loan charge’. It originally applied to any individual who received a loan (with a few limited exceptions) via a disguised remuneration scheme on or after 6 April 1999 that was still outstanding on 5 April 2019, but its scope was limited following an independent review of the loan charge in December 2019 (see below and the Outcome of the independent loan charge review guidance note).

Note that a further independent review into the loan charge was launched in January 2025. This is due to report in Summer 2025. The review will examine the barriers preventing those who are subject to the loan charge but have not already settled and paid their tax liabilities in full from reaching resolution with HMRC. It will recommend ways in which they can be encouraged to settle with HMRC. See the Written Ministerial Statement. See also HMRC issue