Under the settlement proposals, the loan charge due will be based on tax rates at the time of the use of the scheme rather than at a fixed rate from 2019, and no late payment interest will be charged, while there will also be various caps and limitations.

There are currently around 37,000 customers with outstanding tax liabilities ranging from small amounts to some over £5m.   

This move follows the outcome of the McCann review into the loan charge, which set out a number of recommendations, which were mostly accepted by the government.

HMRC is finalising the impact of the settlement opportunity on affected taxpayers, the Treasury confirmed last week, with letters due to start being sent to them from January 2026 onwards.

Settlement opportunity: key elements

The new settlement opportunity is open to anyone with outstanding loan charge liabilities, including employers. These are the key elements:

• instead of being charged at the tax rates that apply to the loan charge and all other income in 2019, the new offer will be worked out based on the tax rates they would have paid in the years that loans were made;
• the new amount will be reduced to account for historic promoter fees - up to a maximum discount of £10,000 per year that a customer used a loan scheme;
• for every taxpayer, the new amount will be further reduced by £5,000, reducing the amount that many people could pay to zero;
• no late payment interest will be charged – reducing the amount that many taxpayers could pay by around 20%;
• any inheritance tax already due because of the use of loan schemes covered by the settlement will be written off;
• where a taxpayer is unable to pay the new amount in full immediately, HMRC will agree a payment arrangement tailored to their ability to pay. All taxpayers will have the right to spread the ‘new liability’ over five years, without having to discuss affordability with HMRC. Forward interest will apply as normal if paid via instalments;
• the maximum reduction for any one taxpayer will be no greater than £70,000 on what the taxpayer already owed because of the loan charge; 
• promoters of tax avoidance schemes will not be able to access the new settlement opportunity. 

In terms of timing, HMRC confirmed in a policy paper on operational activity, ‘HMRC will now review your arrangements. Your named HMRC contact will write to you in early 2026, explaining if and how your position is affected by the outcome of the review’.  

HMRC is advising taxpayers affected by the loan charge to get in touch with their ‘named HMRC contact’ if they want further information about their position on the loan charge. It would also be highly recommended to talk to your accountant or tax adviser for professional advice. The HMRC phoneline to use is 0300 322 9420 if you do not have a named contact.

HMRC stated in a policy paper issued on 26 November: ‘If you have any other questions about your tax affairs and the Autumn Budget 2025 announcement or want to give us information that will help us to start your settlement process, then please contact your named HMRC contact.’

The general disguised remuneration enquiry phone line will not be able to provide specific information about the outcome of HMRC’s review into individual taxpayers.

‘The HMRC helpline won’t be able to tell you how you may be affected by the review outcomes over the phone,’ HMRC said.

Related articles

HMRC will contact loan charge people with offer in January | 28 Nov 2025

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

McCann loan charge review calls for HMRC to offer settlement opportunity | 26 Nov 2025

HMRC policy paper

HMRC operational activity during the new independent review of the Loan Charge [Issued 26 Nov 2025]