The April 2019 Loan Charge

Michael Blackwell 'The April 2019 Loan Charge' [2019] (3) British Tax Review 240-275

19 Pages Posted: 14 Aug 2019 Last revised: 1 Sep 2019

See all articles by Michael Blackwell

Michael Blackwell

London School of Economics - Law Department

Date Written: August 9, 2019


The April 2019 Loan Charge imposes a tax charge, in the 2019-20 tax year, on the value of disguised remuneration (DR) loans issued over the previous 20 years that remain outstanding on 5 April 2019. This has resulted in upto 100,000 individuals facing a massive unexpected tax bill: many of whom claim to be victims of the mis-selling of tax avoidance schemes. The Loan Charge was originally enacted without controversy and scrutiny, but it has become highly contentious. Reports criticising the Loan Charge have been issued both by the House of Lords Economic Affairs Committee and Loan Charge All-Party Parliamentary Group (APPG). The APPG’s Final Report notes that they had been informed of "as many as six possible suicides of people facing the Loan Charge, and that the APPG had been sent confirmation of three of these."

This note first reviews the DR schemes that the Loan Charge targets. It then discusses the nature of the Loan Charge and whether it can be said to be a retrospective tax. The note then assesses the impact of the Loan Charge, considering whether the Loan Charge might create a liability where none existed before: either because the DR schemes were successful at avoiding tax or because HMRC are out-of-time to raise an assessment. The note concludes by considering what may be learnt from a similar experience in Australia in the late 1990s, where the Australian Taxation Office (ATO) sought to raise assessments against taxpayers who had been mis-sold a tax avoidance scheme.

Keywords: taxation, tax avoidance, retroactive legislation, retrospective legislation, rule of law, disguised remuneration, loan charge

JEL Classification: K34, K40, K42

Suggested Citation

Blackwell, Michael, The April 2019 Loan Charge (August 9, 2019). Michael Blackwell 'The April 2019 Loan Charge' [2019] (3) British Tax Review 240-275, Available at SSRN:

Michael Blackwell (Contact Author)

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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