Disguised remuneration: postponing the loan charge

Check if you can apply to postpone the loan charge for outstanding disguised remuneration loan schemes.

This guidance was withdrawn on

This content is no longer current. From 1 January 2019 it is no longer possible to postpone the loan charge. The loan charge comes into effect on 5 April 2019, so you should settle your tax affairs and pay HMRC what you owe as soon as you can.

The loan charge

The loan charge for disguised remuneration loans arises on 5 April 2019. You’ll have to pay the loan charge for any loan from 6 April 1999 that:

  • you received through a disguised remuneration tax avoidance scheme
  • is still outstanding on 5 April 2019

If you’re affected by the loan charge, you may be able to postpone the date on which it needs to be paid to HM Revenue and Customs (HMRC). To do this, you’ll need to apply for postponement by 31 December 2018.

If you’ve already registered your interest to settle your tax affairs, you should speak to your contact in HMRC to understand if you can apply for postponement.

Who can apply for postponement

You can only apply to postpone the loan charge payment date if either you:

  • get approval from HMRC that the loan in question is classed as a qualifying fixed term loan
  • paid an accelerated payment in respect of the income on which the loan charge is based that is equal to or more than the outstanding loan balance

Only the person liable for the loan charge can apply for postponement. If your employer will be liable for the loan charge, you must give them the relevant documents and ask them to make an application to postpone.

Approved fixed term loan postponement

If you want to apply for postponement because you believe your loan qualifies as an approved fixed term loan, you’ll also need approval from HMRC.

The form to apply for postponement outlines additional information that HMRC needs in order to give approval that you have a qualifying loan. We recommend you make both applications at the same time using the form, as we won’t be able to agree a postponement before we’ve given approval for the loan.

A loan can only be classed as qualifying if it:

  • was made before 9 December 2010
  • has a term of 10 years or less
  • is not an excluded loan - meaning that after it was granted it’s been replaced (directly or indirectly) by another loan, or its terms have been altered to meet the 10 year term or change the date on which it must be fully repaid

You can apply for approval and postponement separately by sending the required information to HMRC by email or post, but this will take longer.

If you’re making an application to postpone the loan charge for this reason, there are 2 conditions which must be met. HMRC must agree that:

  • the loan repayments are ‘qualifying payments’ - you must have made regular repayments at intervals of no more than 53 weeks and be able to send HMRC evidence of this
  • the loan is a ‘commercial loan’ - it was made by a lending business or it was on terms that are comparable to loans that were available to members of the public

Accelerated payment postponement

You can also apply to postpone a loan charge if you’ve already made an accelerated payment for the same loan.

To qualify, the amount of the loan outstanding at 5 April 2019 must be equal to or less than the value of the accelerated payment.

If you’re applying for this reason, you should send HMRC a copy of a loan statement from the lender from which you, or if you’re an employer, your employees received the loans. The statement must include the balance outstanding on the loans at the date of your application.

If you can’t get loan statements from the lender, HMRC will consider alternative evidence which could include, but is not limited to:

  • a letter from the lender stating the initial amount of the loan and the current balance
  • a letter or loan agreement from the lender showing the initial amount along with bank statements showing repayments by you and a note of the current outstanding balance
  • a ledger printout from the lender showing the loans advanced and amounts outstanding

How to apply for postponement

To apply for postponement and, if required, approval of a qualifying loan, you should complete the loan charge postponement form.

You must send this to HMRC along with any evidence outlined in the form.

If you’re not completing the form for yourself, you must tell us. This may be because you:

  • are an executor or personal representative for a deceased person
  • have power of attorney
  • are the managing partner of a partnership
  • are completing it on behalf of a company - for example, you’re the finance director or company secretary

Other ways to apply

If you don’t want to complete the form, you can send all of the information it asks for to HMRC by either:



HM Revenue and Customs

What happens next

Once you’ve applied, HMRC will tell you in writing if your application has been approved.

The letter you receive will also tell you:

  • how long the postponement will last
  • what to do if you repay the loan
  • how to pay when the postponement ends
Published 1 January 2018