Demands for disguised remuneration scheme loan repayments
By FCA
AI summary of the source article
Demands are being made to repay loans from disguised remuneration schemes after being sold to third parties. The FCA stated that enforcers may require a Validation Order from the regulator to legally enforce these debts.
Key facts
- Third parties are demanding immediate repayment of disguised remuneration loans originally used to avoid tax.
- Parties seeking payment may need the FCA to grant a Validation Order before the loans can be legally enforced.
- If debts are unenforceable or a required Validation Order is not granted, borrowers cannot be forced to repay or have assets seized without a specific order.
Source excerpt · FCA
We have seen demands being made for people to repay loans, or purported loans, provided as part of disguised remuneration schemes. Disguised remuneration schemes saw people – often contractors, consultants and agency workers – paid for their work through loans instead of regular salaries as a way to avoid tax. HMRC has sought to tackle this tax avoidance through what has been termed the loan charg…