We have seen demands being made for people to repay loans, or
purported loans, provided as part of disguised remuneration
schemes.
Disguised remuneration schemes saw people often contractors,
consultants and agency workers paid for their work through loans
instead of regular salaries as a way to avoid tax. HMRC has
sought to tackle this tax avoidance through what has been termed
the loan charge and published guidance for those
affected.
Questions have been raised about the regulatory status of these
loans and whether they were ever intended to be repaid.
Some of those affected dispute liability for the amounts being
claimed and challenge whether the debts can be legally enforced.
If they're unenforceable, borrowers cannot be forced to pay the
money back or have any of their assets seized against the debt
without a specific order.
Some consumers are, however, being sent legal letters threatening
potential court action and asking for immediate repayment of the
loan. Repayment is being sought after these disguised
remuneration loans were sold by the original provider to a third
party.
Those seeking payment may ask the Financial Conduct Authority to
agree to a Validation Order. This is the formal permission needed
before the loans could be enforced. We would consider any request
carefully and our agreement is by no means guaranteed. If a
Validation Order is required and not granted, the debt would
remain unenforceable.
Anyone who receives a demand for repayment of a disguised
remuneration loan, and is unsure whether they are liable for the
amount claimed, should consider carefully whether to make any
payment. We'd encourage them to look at the HMRC guidance and
consider taking legal advice.
Consumers should not be subject to undue pressure when being
contacted about a debt. If you believe you have been subjected to
this type of behaviour, you should report it to us.
If you are experiencing any difficulties, whether they are
health, money or other difficulties, or if you don't understand
what is happening, you should raise this with those contacting
you.
