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HMRC Loan Schemes: A New Settlement Approach for Individuals Caught Up in Disguised Remuneration (Autumn Budget 2025)

The Government has announced a new settlement approach for individuals inadvertently caught up in disguised remuneration loan schemes. Often sold by promoters as legitimate tax planning, these schemes involved minimal salaries and undeclared loans, sometimes extending to family trusts. While such schemes are now long-stopped, many remain fearful of HMRC enforcement. The proposed settlement process aims to balance fairness with revenue recovery, recognising that some individuals were misled and may lack the funds to settle.

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Published 26 November 2025

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Carly Russell, Partner in our Private Wealth Disputes team, shares her initial thoughts on HMRC’s newly announced settlement approach for individuals caught up in disguised remuneration loan schemes.

One area of interest in the 2025 Autumn Budget was the Government’s review of HMRC’s approach to individuals inadvertently ‘sold’ into loan schemes (often now referred to as disguised remuneration). They were notoriously sold by promoters, who would assure the individual that HMRC accepted the planning as a legitimate means of tax planning and that it was there to provide further succession and tax planning for the benefit of the individual and their wider family.  Common elements of the loan schemes were the contracting of an individual’s employment services by an umbrella entity to the company for whom the individual provided their working service.  Upon receipt of money from the company, the umbrella entity would then pay the individual a minimum salary and a further amount loaned to the individual with no payment of PAYE or NICS. On occasion I have seen the planning expanded, so that the benefit of the loan may be to a trust of which the individual and their family would be discretionary beneficiaries.

Schemes of this nature and similar have long been stopped and should not be entered into, but the Government recognises the continued existence of so many with individuals fearful to approach HMRC to unravel the structure. The fear is one of aggression from HMRC in their approach and possible financial ruin. 

In an attempt to bring schemes of this nature to an end for HMRC and the individuals alike, but also for the Government to bring owed revenue (of which they estimate is c£1.7billion), there is to be the introduction of a settlement approach with a keen drive for fairness and recognition of whether the individual has the money to pay.  There appears greater emphasis and intended empathy for the individuals that they were possibly ‘hoodwinked’ into thinking that what they were doing was simply what everyone was allowed to do.  The promoters are often getting away without retribution having charged huge amounts of money to the individuals for setting them up.

The settlement approach is yet to be issued in full, only just announced, but this is something we can help with.  Now is the time if you are that individual, company or employer caught up in a scheme of this nature.

If you or your business may be affected by a disguised remuneration scheme, contact our Private Wealth Disputes team for expert guidance on navigating HMRC’s settlement approach.

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Shorter Reads

HMRC Loan Schemes: A New Settlement Approach for Individuals Caught Up in Disguised Remuneration (Autumn Budget 2025)

The Government has announced a new settlement approach for individuals inadvertently caught up in disguised remuneration loan schemes. Often sold by promoters as legitimate tax planning, these schemes involved minimal salaries and undeclared loans, sometimes extending to family trusts. While such schemes are now long-stopped, many remain fearful of HMRC enforcement. The proposed settlement process aims to balance fairness with revenue recovery, recognising that some individuals were misled and may lack the funds to settle.

Published 26 November 2025

Associated sectors / services

  • Private Wealth
  • Tax disputes & investigations

Authors

Carly Russell, Partner in our Private Wealth Disputes team, shares her initial thoughts on HMRC’s newly announced settlement approach for individuals caught up in disguised remuneration loan schemes.

One area of interest in the 2025 Autumn Budget was the Government’s review of HMRC’s approach to individuals inadvertently ‘sold’ into loan schemes (often now referred to as disguised remuneration). They were notoriously sold by promoters, who would assure the individual that HMRC accepted the planning as a legitimate means of tax planning and that it was there to provide further succession and tax planning for the benefit of the individual and their wider family.  Common elements of the loan schemes were the contracting of an individual’s employment services by an umbrella entity to the company for whom the individual provided their working service.  Upon receipt of money from the company, the umbrella entity would then pay the individual a minimum salary and a further amount loaned to the individual with no payment of PAYE or NICS. On occasion I have seen the planning expanded, so that the benefit of the loan may be to a trust of which the individual and their family would be discretionary beneficiaries.

Schemes of this nature and similar have long been stopped and should not be entered into, but the Government recognises the continued existence of so many with individuals fearful to approach HMRC to unravel the structure. The fear is one of aggression from HMRC in their approach and possible financial ruin. 

In an attempt to bring schemes of this nature to an end for HMRC and the individuals alike, but also for the Government to bring owed revenue (of which they estimate is c£1.7billion), there is to be the introduction of a settlement approach with a keen drive for fairness and recognition of whether the individual has the money to pay.  There appears greater emphasis and intended empathy for the individuals that they were possibly ‘hoodwinked’ into thinking that what they were doing was simply what everyone was allowed to do.  The promoters are often getting away without retribution having charged huge amounts of money to the individuals for setting them up.

The settlement approach is yet to be issued in full, only just announced, but this is something we can help with.  Now is the time if you are that individual, company or employer caught up in a scheme of this nature.

If you or your business may be affected by a disguised remuneration scheme, contact our Private Wealth Disputes team for expert guidance on navigating HMRC’s settlement approach.

Associated sectors / services

  • Private Wealth
  • Tax disputes & investigations

Authors

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