Disguised Remuneration and the Loan Charge – Demands to Repay the Loans…
Disguised Remuneration and the Loan Charge. Recovering the Loans
We have seen a growing number of clients who engaged in disguised remuneration schemes receiving demands from third parties demanding that they pay back their loans.
HMRC has recently released guidance about what to do if you have been contacted by a third party about repaying a loan that you took out from a disguised remuneration scheme. This is an area about which I have been advising for some time not least since some of the demands I have seen have appeared to warrant closer inspection and considerable push back. In that regard, HMRC’s advice is to get independent legal advice.
Users of disguised remuneration schemes are receiving letters from third parties demanding repayment of their outstanding loans even if, as is often the case in my experience, the client believed that they would not be asked to repay the loans.
The correspondence often gives the client the option of making a one-off payment to buy yourself out of the loan arrangement and have the balance written off. In the cases I have advised on, the request for repayment often comes from a third party who has purchased the original loan from the original lender. In other cases I have advised on, loans are called in by IP’s (ie insolvency practitioners, be they liquidator or trustee in bankruptcy).
However, not all of the demands I have seen are legitimate.
HMRC have expressed their concern that taxpayers are being asked to repay loans and hence have provided guidance for individuals affected, including actions you can take to protect yourself. This is a complex area and should you receive a demand you should contact us straight away. In that regard, there are various issues we will need to check starting with determining if you have a legal liability to repay the loan to the third party or could take action against those who provided or are recalling the loans.
If you have entered into a disguised remuneration scheme and have received any form of demand relating to the loans, or, if you believe you were mis-sold the scheme, do not delay – contact us immediately. All too often clients have instructed us either at the 11th hour or after it is too later, meaning either there is no means for us to assist, or we can assist, but the costs will be much higher.
We have advised a number of clients in relation to claims against their professional advisers and promoters after they engaged in tax avoidance schemes or other tax mitigation schemes/ strategies, including EFRBS, EBT, SHIPS, Contractor Schemes, Film Schemes and Remuneration Trusts.
We have successfully recovered significant compensation from advisors and/ or promoters where, for example, the advice given was negligent, or a breach of their fiduciary duties, or, the promoters acted in breach of their statutory duties.
Disclaimer: this article is not to be relied upon as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought