Certax looks at ‘loan charge review’

Certax has reported that there is pressure on the PM to review the controversial ‘Loan Charge’ that HMRC launched earlier this year.

Money matters can be complicated for many of us, particularly when it comes to confusing subjects such as loan repayments and interest. Certax has explained what the controversial ‘Loan Charge’ introduced by HMRC earlier this year could mean for many of us and why there’s pressure on PM Boris Johnson to launch an independent review of it.

The Loan Charge legislation introduced a steep 45 percent non-refundable charge on all loans taken out through what were deemed to be ‘disguised remuneration’ schemes (or methods of minimising tax payments). The charge has mainly affected agency workers and freelancers and was introduced to ensure that everyone is paying the amount of tax they’re supposed to.

However, many feel that this is unfair, as a large proportion of the 50,000 people affected are low-paid and were persuaded by their employers to get involved with the schemes. A group that feel there should be a review of this steep charge (the Loan Charge Action Group) reported that the typical sum owed is a huge £120,000, more than many low-income individuals can afford to pay back.

MPs, including former cabinet minister Iain Duncan Smith and Ross Thompson, Vice-Chair of the Loan Charge All-Party Parliamentary Group, are now putting pressure on PM Boris Johnson to launch an independent review of this charge. They want to make sure that it is the fairest way of ensuring individuals are paying the right amount of tax before the charge is implemented on October 31st.

If you’re worried about anything tax-related, from making sure you’re paying the right amount to setting yourself up as self-employed, make sure you speak to bookkeeping and accounting franchise Certax. Its nationwide network of franchisees offers sage advice to ensure you never get into trouble with HMRC.