Letters to taxpayers titled “The independent review of the loan charge – an update” are the start of HMRC’s two-year mission to inform all taxpayers involved with the loan charge of the upcoming changes to settlement opportunities.
The letter invites taxpayers to respond if they would like to register their interest in the new opportunity, but informs them that they do not have to respond to this letter as the case officer will be in touch again in the future.
We have seen some examples where these letters have been received by taxpayers who believe that they have already settled. Understandably, this has caused further stress to these individuals who have already been under a lot of strain when settling under the existing contentious settlement opportunity.
Alternatively, taxpayers have received these letters in cases where they are still yet to settle and were perhaps expecting an update.
Read on to see what to do if you receive one of these letters.
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Do you have a problem?
The first step would be to establish if you have a problem. Have you used tax arrangements that HMRC consider the loan charge applies at any point?
If so, have you settled previously or were you waiting to settle in the hope of the new opportunity?
If you believe you have already settled your loan charge liabilities, then you should write back to the contact on the letter explaining your circumstances and explain why you believe the letter is not applicable to you. The adviser will respond either agreeing or disagreeing and provide reasons. Menzies’ Tax Disputes and Disclosures team can assist with this if professional assistance is required.
Alternatively, if you were holding out on settling until the LCSO 2026 was opened, the letter is applicable to you. You may wish to respond confirming your interest in settling under the new scheme and to open up a channel of communications between you and your HMRC adviser.
In most cases it will be appropriate to obtain independent specialist advice to assist you through the process and ensure you are settling on the best possible terms.
What should you do next?
Our dedicated Tax Disputes and Disclosures team are specialists in advising clients subject to the loan charge or users of other tax avoidance schemes to settle with HMRC on the best available terms. We can help you every step of the way regardless of where you are in your settlement journey.
If you do wish to settle under the new terms, we will calculate the tax due and handle the correspondence with HMRC to avoid any further stress on you. Menzies can help you settle on the best possible terms under the LCSO 2026.
Call us on our free, confidential hotline: Tel: 020 7465 1900
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