Loan Charge Settlement Offers: What to Check Before Accepting

The first Loan Charge settlement offers following the McCann Review have started to arrive.

‍

For people who have lived with unresolved disguised remuneration liabilities for years, an offer may feel like a long-awaited chance to draw a line.

‍

An early offer examined by WTT runs to 11 pages and contains detailed calculations covering schemes, loan amounts, income, promoter fees and the proposed settlement figure. It also gives the recipient 90 days to respond. HMRC expects to issue offers to everyone eligible over the coming months.

‍

The figure in the letter may not be the figure that is actually due, and the offer WTT reviewed contained several issues that would each have worked against the recipient.

‍

A Loan Charge settlement offer should not be ignored, but nor should the figures in it be taken at face value.

‍

What is the new Loan Charge Settlement Scheme?

The new scheme follows the independent review of the Loan Charge led by Ray McCann, whose central recommendation of a new and final settlement opportunity the Government accepted. The Employment and Trading Income etc. (Loan Charge Settlement Scheme) Regulations 2026 were made on 14 July 2026 and come into force on 5 August 2026.

‍

HMRC says the scheme applies to people with a disguised remuneration Loan Charge liability that has not been paid in full, including certain liabilities covered by settlements agreed after 1 June 2021. Promoters, introducers and their directors are excluded from eligibility by section 25(2)(b) of the Finance Act 2026.

‍

What does the settlement offer include?

‍

Subject to a maximum reduction of £70,000, HMRC says an offer may:
‍

• use a simplified calculation based on the tax year in which disguised remuneration was received;
• apply a reduction for promoter fees;
• deduct a further £5,000 from the liability; and
• exclude late-payment interest and most penalties attached to the original Loan Charge amount.

HMRC estimates that most individuals who settle will see reductions of at least 50%, and that around 30% will settle without paying anything. Around 37,000 people are in scope, with liabilities ranging from small sums to over £5 million.

‍

These terms may result in a significant reduction, and in some cases will reduce the liability to nothing. However, a favourable methodology does not guarantee that the underlying information HMRC has used is complete or accurate.

‍

Why HMRC’s figures need checking

‍

The early offer reviewed by WTT included estimated figures where confirmed information may be available, and appeared to assume that a six figure sum could be paid immediately. It also showed the tax due before payments held on account had been deducted.

‍

That last point is the most concerning. HMRC knows what it holds against a taxpayer's record, so asking the recipient to raise it, rather than crediting it before the letter is issued, overstates what is actually owed.

‍

Before accepting, the recipient should establish whether:
‍

• every relevant scheme has been correctly identified
• the loan figures match their own records
• HMRC has used estimates
• promoter fees have been calculated on the correct tax years
• all relevant tax years are included
• payments on account and previous settlements have been deducted
• employer PAYE liabilities affect the position
• what happens to existing enquiries, assessments, appeals or litigation

‍

HMRC's guidance says that recipients who disagree with the figures should contact their caseworker, and that a new settlement offer will be issued where those figures change.

‍

Why the 90-day period matters

‍

Ninety days may initially appear generous, but reviewing years of disguised remuneration arrangements can be a substantial exercise, and records may need to be obtained from former employers, scheme operators, accountants and HMRC.

‍

If the signed acceptance form is not returned in time, the offer lapses. There is no route back into the scheme for a recipient who was unsure, away or waiting on advice, and what remains is the full original Loan Charge liability with interest still running.

‍

That leaves one question unanswered. Where a calculation has to be revised, a payment plan requested, or estimates replaced with accurate figures, HMRC has not confirmed whether the 90 days begins again. There is a point worth putting to HMRC in writing: section 25(3)(b) of the Finance Act 2026 requires a settlement offer to remain open for a reasonable period, which is a legal standard rather than an administrative preference, and a period largely consumed by correcting HMRC's own figures is arguably not a reasonable one.

‍

The deadline should be taken from the recipient's own letter, recorded immediately, and treated as continuing to apply unless HMRC confirms otherwise in writing.

‍

Can a Loan Charge settlement be paid by instalments?

‍

Yes, and an offer based on immediate payment should not be accepted simply because the recipient is unaware that other options exist.

‍

HMRC says recipients who cannot pay in one amount should contact their caseworker before accepting. Payment by instalments for up to five years is available under the new terms, and a longer period may be possible depending on circumstances. Interest will apply, and HMRC will issue a new offer incorporating it.

‍

Before agreeing a plan, the recipient should establish the instalment amount, the total interest payable, the payment period, what evidence of affordability HMRC requires and the consequences of missing a payment.

‍

What happens when an offer is accepted?

‍

Acceptance creates a legally binding agreement between the taxpayer and HMRC, even where the settlement calculation reduces the amount payable to zero. The acceptance form must be completed, signed and returned even where there is nothing to pay, or the original Loan Charge liability remains due.

‍

HMRC says acceptance will close any open compliance checks into the disguised remuneration arrangements covered by the offer letter. The words "covered by the offer letter" matter. Before signing, the recipient should confirm exactly which arrangements, tax years, enquiries and assessments are being resolved, and should not assume that acceptance closes every historic issue they have with HMRC.

‍

What happens if the offer is not accepted?

‍

HMRC states that a person who does not accept will remain liable for the full Loan Charge amount, and will pursue the outstanding disguised remuneration liabilities through its normal processes, with late-payment interest continuing to accrue. The alternatives may include continuing enquiries, assessments, appeals or litigation.

‍

The decision is therefore not simply whether the discounted figure looks affordable. It requires a comparison between the settlement terms and the position if the offer is refused or allowed to lapse.

‍

The bottom line

‍

The new Loan Charge Settlement Scheme may provide a meaningful opportunity to resolve liabilities that have remained open for years. But an offer calculated on incomplete information is not an opportunity, and a deadline that passes while the recipient decides removes the opportunity altogether.

‍

If an offer arrives, record the deadline immediately, gather previous HMRC correspondence, scheme documents, loan records, tax returns and details of any current enquiries or appeals, and have the calculation reviewed by an adviser with direct experience of disguised remuneration, HMRC settlements and Loan Charge disputes. This is not simply an arithmetic check. It is a question of whether the figures are right, whether the payment terms are realistic and whether acceptance resolves everything it is expected to resolve.

‍

Speak to a specialist

‍

The offers are being issued now, but the figures in them are not final, and what happens inside the 90 days makes a significant difference to what you eventually pay. If a Loan Charge settlement offer has arrived, or you expect one, get expert eyes on it before you sign anything. WTT's tax specialists review the calculation, challenge figures that are wrong, negotiate realistic payment terms and deal with HMRC on your behalf. Contact us today on +44 (0)20 3468 0000 or info@wttconsulting.co.uk for a confidential review. 

‍

References 

‍

GOV.UK. (2026). Find out about the loan charge settlement scheme. HM Revenue & Customs. https://www.gov.uk/guidance/find-out-about-the-loan-charge-settlement-scheme

‍

Legislation.gov.uk. (2026). Finance Act 2026, section 25: loan charge settlement scheme. The National Archives. https://www.legislation.gov.uk/ukpga/2026/11/section/25

‍

GOV.UK. (2025). Loan charge review: policy paper and tax information and impact note. HM Revenue & Customs. https://www.gov.uk/government/publications/loan-charge-independent-review/loan-charge-review

‍

GOV.UK. (2025). Independent Loan Charge Review 2025: final report. HM Treasury. https://assets.publishing.service.gov.uk/media/6925d50e22424e25e6bc3199/Loan_Charge_Review_2025_-_Final_Report.pdf

‍

GOV.UK. (2026). HMRC operational activity during the new independent review of the loan charge. HM Revenue & Customs. https://www.gov.uk/government/publications/hmrc-issue-briefing-operational-activity-during-the-new-independent-review-of-the-loan-charge/hmrc-operational-activity-during-the-new-independent-review-of-the-loan-charge

‍