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30 September loan charge deadline – payment plan warning

Published on 28 September 2020

LITRG is urging those affected by the loan charge not to leave it until the last minute to try and arrange a payment plan. Any loan amounts subject to the loan charge must be reported by 30 September – in addition, the loan charge and any other tax due, must also be paid by that date (or a payment plan agreed).

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For those affected by the loan charge, 30 September 2020 is the date by which they must:

  • report the loan amounts if they have not done so already via the on-line loan charge reporting form. A paper version can be obtained by calling HMRC on 03000 599110 or can be downloaded from the LITRG website.
  • decide whether to elect to spread the loan amounts over 3 years (also done via the loan charge reporting form – this may not be beneficial in all cases and you should ensure you understand the consequences of making this irrevocable election)
  • file their 2018/19 tax return and report the loan income in the relevant pages and boxes.
  • pay the loan charge and any other tax due (or agree a payment plan).

We have highlighted the final line as it is very important that people understand that filing a tax return containing the loan charge is not the end of the story. Once the tax return is filed, people either need to pay the amount showing as due – or arrange a payment plan. Arranging a payment plan is not something that can be done at 11.50pm on the 30th September 2020. 

If you need to arrange a payment plan, you need to phone the loan charge helpline on 03000 599110.

The helpline is staffed by people who can arrange a payment plan, but this can take some time, and you may not get through immediately. 

If you don't pay the tax due or arrange a payment plan by 30th September, then the late payment interest that was deferred from 1 February 2020, will be charged. Late payment penalties may also accrue.

You may have read that HMRC are able to consider waiving interest and penalties on a case by case basis, we understand that HMRC do not envisage applying this flexibility in anything other than very limited circumstances, so you should not rely on this.

Contact: Meredith McCammond (click here to Contact Us)
(First published: 28/09/2020)


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