17/04/2026
Could the new Loan Charge Legislation cost you money?
Do you currently have a contract with HMRC and are paying off a settlement that will be recalculated under the new terms as part of the Loan Charge Review?
If so, it’s possible you may be affected by part of the legislation, which means that once your new liability is calculated, you have overpaid. According to HMRC these amounts will not be repaid to the taxpayer, and the debt will just be treated as cleared.
If you are in this position, it may be beneficial to stop making payments to HMRC so that you don’t end up with an overpayment you cannot get back. This could for example happen in cases where under a Time To Pay arrangement, you have now paid off the tax liability and have interest left – which may very well be reduced to nil, under the new legislation, depending on the size of the debt.
According to HMRC guidance published in February 2026, taxpayers who agreed a contract settlement, including loan charge liabilities after 1 June 2021, will be eligible for the new settlement opportunity if those amounts have not been paid in full.
https://www.gov.uk/government/publications/hmrc-issue-briefing-operational-activity-following-the-new-independent-review-of-the-loan-charge/hmrc-loan-charge-review-technical-note -for-the-loan-charge-settlement-scheme--finance-bill-2025-to-2026
The legislation in the Finance Bill provides that amounts paid by a customer against their original loan charge liability will be credited against the new settlement amount, but that this cannot create a repayment to the customer where the amount paid is greater than the new settlement amount.
HMRC have announced that further details will be provided in secondary legislation on how this is going to work and this could be by the end of May.
If you would like to discuss your case and need assistance in clarifying how or if this will affect you, please contact us and we will be happy to offer advice and help you through the new settlement process.
[email protected]
07943123396
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