Loan charge reporting form

Updated on 19 April 2022

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If you’ve not already done so, you must accurately report any outstanding disguised remuneration loans that are subject to the loan charge to HMRC. You can do this on the loan charge reporting form.

Illustration of a person in front of a computer with coins and a calculator
(c) Shutterstock / Jane Kelly

As confirmed in HMRC’s guidance on the loan charge, you are no longer able to submit the form online. 

A paper version of the form was previously shared with us by HMRC and is available to download here.

If you want to make the irrevocable spreading election, this form is the method by which you legally do that.

This form needed to be completed and submitted to HMRC by 30 September 2020.

Although the 30 September 2020 deadline has passed, you may still be able to make a late election. There are limited circumstances where HMRC can accept a late election. The Statement of Practice sets out the criteria that they’ll consider for late elections and the process for making a late election.

⚠️ Note: spreading is not necessarily beneficial for everyone – we look at some of the considerations here.

When you send the form back, you should tell HMRC why you are making a late election. You can do this on a separate sheet of paper.

If you attempt to make a late election, you should include your full outstanding loan balance in your 2018/19 Self Assessment tax return, until an officer of HMRC has provided confirmation that the late election has been accepted. HMRC will consider late elections on a case by case basis and write to you to let you know their decision.

If you do not want to spread your loan balance, you must still complete the form if you haven’t already reported your loan amounts. Those who have previously completed the loan charge reporting form do not need to amend it even though their loan charge liability may have now changed, unless they want to make the spreading election.

If you need help in understanding how to answer the rest of the questions on the form, please see our previous news item, Loan charge – additional information form FAQs (please note this was written before the form/the deadline were altered, following the outcome of the Morse review).

If you want to send the form in by post, then this should be sent to:

Counter Avoidance,
HMRC,
BX9 1LW

It may be possible to send the form in by email – you should confirm this with HMRC by:

Where to get help with the loan charge reporting form and/or wider loan charge issues

We know that there are a lot of people who have not yet met their loan charge obligations. This may be for many different reasons.

Tax Aid can provide free advice and assistance with loan charge issues to individuals on incomes of around £20,000 a year or less. This can include:

  • Talking to HMRC on your behalf
  • Helping you to:
    • Quantify the amount of loan income that you received (even if this is on an estimated basis)
    • Complete the loan charge reporting form and advising on whether it is possible (or beneficial) to make a late election to spread the loan charge over three years (per another of the recommendations coming out of the Morse review).
    • Complete your 2018/19 tax return (and 2019/20 and 2020/21 tax returns if a spreading election is made and accepted)
    • Appeal any late filing and penalties if you had a reasonable excuse for not having met your obligations. Note HMRC have previously stated in their guidance that they will consider waiving late filing and payment penalties on a case-by-case basis for any 2018/19 tax returns filed after 30 September 2020. You can read our guidance on reasonable excuse here. It can include where you did not understand the system and needed help from, for example, TaxAid or from HMRC. In this case, you are usually expected to have taken reasonable steps to get help with your tax affairs. Of relevance will be how difficult your tax affairs are and why, in your particular circumstances, you have found them too difficult to deal with
    • Negotiate payment arrangements/deal with the tax debt arising from the loan charge, which can include a bespoke payment arrangement taking account of your individual health and financial circumstances.

For further guidance on what to do if you have outstanding loan charge issues to deal with and what help is available and from where, see our news article.

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