But its figures still need scrutiny warns Zoe Flude Senior Tax Consultant at Markel Tax
Since 5th August 2026 HMRC have had the statutory framework it needs to begin progressing offers under the new Loan Charge Settlement Scheme. For people who have spent years living with the financial and emotional uncertainty created by the Loan Charge that date could mark the beginning of an end and provide a defined route to settle outstanding liabilities.
That clarity is welcome but it should not be mistaken for simplicity as HMRC will produce the initial calculation, identify the arrangements it believes fall within the offer and set out the amount payable. The most important advice I would give anyone receiving one of these letters is, do not assume HMRC’s figures are automatically correct.
A settlement may provide long awaited closure, but acceptance creates a legally binding agreement. The figures, scope and practical consequences therefore need to be understood before anything is signed.
A new route through a long-running problem
The Loan Charge was introduced to address certain disguised remuneration arrangements, under which income was provided in the form of loans rather than conventional salary or profit. Many of those affected have been in correspondence or dispute with HMRC for years, sometimes involving several employers, agencies, umbrella companies, trusts or advisers.
The new scheme applies where a person has a disguised remuneration Loan Charge liability that has not been paid in full. This includes a Loan Charge liability covered by a settlement agreed after 1 June 2021. Eligible taxpayers do not need to apply as HMRC says it will write to the people it believes qualify and make an offer directly.
The regulations take effect on 5 August, which is the earliest point from which the new statutory scheme can operate. It would be unwise, however, to interpret that date as a promise that every eligible person will hear immediately. HMRC will begin the process after the legislation is in force and cases are likely to move at different speeds.
The amount offered under the new settlement scheme may differ from a taxpayer’s existing Loan Charge liability. However, recipients should not simply assume HMRC’s calculation is correct. The figures should be checked carefully against the new calculation rules before an offer is accepted. A HMRC calculation is not the final word.
HMRC’s letter should set out the loans and other income used in the calculation, together with the amount due. That breakdown must be checked against the taxpayer’s own records and the rules of the scheme.
Before accepting an offer the key questions should include:
- Have the correct loans and tax years been included?
- Has any income been omitted, duplicated or attributed to the wrong person or employer?
- Have the available statutory reductions been applied correctly?
- Which other outstanding disguised remuneration liabilities, if any, are included in the offer and could any liabilities remain outside the settlement?
- Does the offer address any existing Inheritance Tax liabilities connected with the arrangements and could further trust or Inheritance Tax consequences arise after settlement?
The settlement offer will not necessarily cover every outstanding disguised remuneration liability. HMRC’s guidance states that certain additional liabilities may be included where they fall outside the Loan Charge Settlement Scheme and were subject to an enquiry opened, or an assessment issued, on or before 26 November 2025. It is therefore important to establish precisely what the offer resolves and what, if anything, may remain outstanding.
The scheme can write off certain unpaid Inheritance Tax liabilities that are already due or become due within 90 days of the settlement-offer letter. However, liabilities arising after that period may remain and individuals may therefore need advice on whether any underlying trust arrangements should be brought to an end to prevent further Inheritance Tax consequences.
HMRC’s own guidance acknowledges that figures can be challenged. If a taxpayer disagrees, they can raise the issue with their caseworker and HMRC should issue a revised offer where the figures change. That review stage is important because accepting an offer ends open compliance checks into the arrangements covered by it and replaces the relevant liabilities with the contractual settlement amount.
Employers, employees and the risk of confusion
Some cases will be complicated further by PAYE responsibility. Where HMRC believes an employer should have deducted PAYE, it will seek to settle with an existing employer first while writing to the employee at the same time. If the employer does not settle, HMRC may later issue the employee with a new offer.
An employee does not lose the opportunity to settle by waiting while HMRC approaches the employer. This is precisely the kind of situation in which acting too quickly, without understanding the interaction between the two offers could lead to unnecessary confusion.
Anyone unable to pay in full should speak to their caseworker before accepting an offer. HMRC may agree payment by instalments, but interest will apply and should be included in a revised settlement offer. Any proposed arrangement should therefore be reviewed carefully to ensure it remains affordable and sustainable over the full repayment period.
For many affected individuals no outcome will feel entirely satisfactory. Some entered arrangements on professional advice and have spent years waiting for certainty. Receiving an offer may therefore be both a relief and an unwelcome reminder of a difficult period.
The scheme nevertheless creates a genuine opportunity to draw a line under qualifying liabilities. The best outcome will come from combining that opportunity with careful scrutiny to establish exactly what is included, test the methodology, challenge any discrepancy and agree an affordable payment plan before signing.
The arrival of an HMRC letter should not trigger panic, nor should it prompt immediate acceptance. It should trigger a structured review. After years of uncertainty, taxpayers deserve closure but it needs to be closure built on the right figures.
Official references: HMRC settlement scheme guidance | 2026 Regulations
