Disguised remuneration tax avoidance schemes claim to avoid the need to pay Income Tax and National Insurance contributions. They normally involve a loan or other payment from a third-party which is unlikely to ever be repaid.
These schemes are used by employers and individuals. If they’re used by contractors, they’re often known as contractor loans.
A charge on disguised remuneration loans, known as the loan charge, was introduced to tackle the use of disguised remuneration schemes and came into effect on 5 April 2019. The charge applies to loans made after an including 9 December 2010, if they were still outstanding on 5 April 2019.
Anyone who wants to settle their disguised remuneration scheme use, can do so under the 2020 settlement terms.