The extension of the anti-avoidance measures will see the creation of a new close companies’ gateway, which will be a retrospective measure backdated to 6 April 2017, although the initial proposal was revised following consultation.

There will also be measures to ensure liabilities from the loan charge introduced by Finance Act (No.2)A 2017 are collected from the appropriate person.

Following consultation on draft legislation published on 13 September 2017, the government will legislate in Finance Bill 2018 to:

•             introduce the close companies’ gateway, to tackle disguised remuneration avoidance schemes used by close companies to remunerate their employees, and directors, who have a material interest. This change will have effect on and after 6 April 2017;

•             require all employees, and self-employed individuals, who have received a disguised remuneration loan to provide information to HMRC by 1 October 2019.

This gives HMRC more powers to ensure the loan charge is complied with. This change will have effect on and after Royal Assent of Finance Bill 2018.

The government will also legislate in Finance Bill 2018 to:

•             put beyond doubt, with effect from 22 November 2017, that Part 7A of Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) applies regardless of whether contributions to disguised remuneration avoidance schemes should previously have been taxed as employment income - this change will have effect on and after 22 November 2017;

•             ensure the liabilities arising from the loan charge are collected from the appropriate person where the employer is located offshore - this change will have effect on and after Royal Assent of Finance Bill 2018.

HMRC already has powers to levy a charge on loans made after 5 April 1999 through disguised remuneration schemes that remain outstanding on 5 April 2019.