UK Government Launches Independent Review of Loan Charge

The UK government has launched an independent review into the Loan Charge, initially implemented in 2016 to combat tax avoidance schemes that disguised income as non-taxable loans. Concerns have emerged regarding the liabilities owed by individuals affected by the charge and their capability to settle these tax debts within a reasonable timeframe. Ray McCann, former president of the Chartered Institute of Taxation, will lead the review, aiming to find a balance between fairness for those impacted and the expectations of compliant taxpayers. The review, announced by Exchequer Secretary to the Treasury James Murray, is set to provide recommendations and a final report by summer 2025. The government acknowledges the Supreme Court's previous rulings, which upheld that such schemes do not exempt individuals from paying tax, and aims to ensure compliance while addressing ongoing concerns. This initiative reflects the government’s commitment to close the tax gap and provide appropriate support to those involved.