Up to 40,000 individuals and businesses have been sent letters by HMRC offering them a settlement package to resolve outstanding loan charge bills, but it appears that take-up of the scheme may not be as high as expected.

Now HMRC is ramping up publicity about the scheme, urging taxpayers to take action, and has asked ‘anyone who receives a letter from their caseworker to respond as soon as possible’.

‘These arrangements can be complicated and take some time to work through, which is why every customer has a named contact they, or their agent, can speak to,’ HMRC stressed.

The loan charge settlement scheme ‘could see 50% reductions and some will pay nothing at all’, HMRC said, adding this ‘could reduce their bills by up to £70,000’.

HMRC said the loan charge settlement scheme ‘will see most customers’ bills reduced, with around a third able to settle without paying anything at all’.

Once a settlement offer is made, HMRC confirmed ‘90 days is the minimum period the loan charge legislation allows for acceptance of a loan charge settlement offer. For the majority of customers HMRC will allow a longer period’.

The statutory instrument, SI 2026 No.821, The Employment and Trading Income etc (Loan Charge Settlement Scheme) Regulations 2026, was laid on 15 July, effective from 5 August 2026.

This clarifies the length of time taxpayers have to make a settlement offer. SI 2026 No. 821, Part 4, section 9 on settlement offers, states:

(8) The period in which a settlement offer is open for acceptance is —

(a) 90 days, or

(b) such longer period as the Commissioners may reasonably determine, beginning with the day the offer is made.

(9) Where a settlement offer made is a further offer under para (7)(c), the period in para (8)(a) is 30 days.

(10) Relevant loan charge amounts —

(a) must not include amounts which are the subject of, or under, a contract settlement entered into before 1 June 2021;

(b) may include amounts which have been assessed (including self-assessed), whether or not that assessment is final.’

Named HMRC contact

Earlier in the year, all those affected by loan charge demands were assigned a named HMRC contact to handle their settlements, with letters going out to confirm details of this person.

The onus then shifted to the taxpayer to contact their specific case worker to find out about this individual tax position and liability.

The settlement scheme was the result of the McCann review last year which set out a way to resolve the long-standing loan charge issue.

Jonathan Smith, director of counter avoidance at HMRC, said: ‘We want to help people draw a line under their loan charge liability and reach a resolution - but that can only happen if you talk to us.

‘Some people will see their bills reduced to zero and that is why we need them to engage with us. Our message is simple: get in touch so we can help you resolve this.

‘You don’t have to wait for your letter from us - you can contact your named caseworker at any time to discuss the settlement opportunity.’

HMRC has been contacted for clarification about the number of loan charge taxpayers who have settled to date.

Useful links

Loan charge taxpayers sent letters with named HMRC contact | 10 Feb 2026

How loan charge bills will be calculated | 1 Dec 2025

Treasury confirms loan charge settlement will cost £365m | 27 Nov 2025

Loan charge repeal would not be a fair outcome, says McCann | 18 Mar 2026

Legislation, SI 2026 No.821,  The Employment and Trading Income etc (Loan Charge Settlement Scheme) Regulations 2026