What does HMRC’s New Settlement Opportunity mean for you?
HMRC announced in the 2025 Autumn Budget that there would be a new loan charge settlement opportunity in 2026 (LCSO 2026) following Ray McCann’s independent review.
The 2026 settlement opportunity is significantly more generous than previous options. If you are yet to settle and considering your options, read on to see what you can expect from the new opportunity, and how Menzies can support you in settling any tax avoidance scheme liabilities.
At Menzies, our tax dispute specialists are ready to support clients. We can help clients achieve the best possible outcome and minimise the stress of corresponding with HMRC by doing so on your behalf.
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How can Menzies help me?
Menzies have a dedicated team of specialists who have prepared for the LCSO and are ready to help.
We will ensure that you pay the right amount of tax, and take advantage of the 2026 LCSO’s favourable terms in the most efficient way. We will handle all the correspondence with HMRC and keep you informed throughout.
If you would like to get in touch please either call our free confidential hotline or fill out the questionnaire, and a member of our team will be in touch to discuss your case in more detail within 2 working days.
FAQs
What is the loan charge?
The loan charge is an anti-avoidance measure introduced by the government in Finance Act 2016. It was intended to address the tax loss from disguised remuneration schemes, arising when individuals would structure their payments in such a way that meant their income mostly escaped income tax and NICs.
For more details visit this blog.
What is different about this settlement opportunity?
This opportunity provides much more generous terms including; no penalties, unstacked tax years and no IHT. For a more detailed breakdown of the differences and the new terms, visit this blog.
What if I have already settled?
If you have already settled then you should not need to take any action. HMRC have been writing to individuals who were involved in the loan charge, but do not require further action. If you have received a letter and aren’t sure what to do, visit this blog.
When do I have to pay by?
If you settle under the LCSO 2026, you are automatically granted 5 years payment terms if required.
Longer terms will be available if required but they will be means tested.
Will I get any penalties?
No, if you settle under the LCSO 2026, no penalties will be charged.
What happens if I can’t pay?
If you are worried about not being able to pay, please get in touch or visit this blog for more information.
Why should I come forward now?
This is the best opportunity that has ever been offered for a tax avoidance scheme. HMRC have said that the LCSO 2026 will be the final chance to settle. If you do not settle now you risk being faced with higher tax bills and penalties.
What if I am in the middle of settling?
HMRC should write to you with the new terms. If they do not, you should speak to your case officer to discuss this with them at the earliest opportunity.
What does settling involve? What is the process?
The process will be for an adviser to prepare your tax computations for each tax year in which you took part in a loan charge tax avoidance scheme.
As your adviser, we would then calculate your settlement figure on the best available terms and present this to HMRC on your behalf to avoid any additional stress for you.
I’ve been involved in other avoidance arrangements, will this available to me?
No, the LCSO 2026 is only available to settle loan charge tax avoidance liabilities
