HMRC is saying nothing has changed as the UK Treasury admitted it was reconsidering key tax avoidance measures that have been criticised as overly aggressive by some MPs in an upcoming Finance Bill.
The loan charge, due to come into effect in April, has attracted considerable controversy as the regulations give HMRC powers to impose a second taxing point for historical schemes that were considered legal 20 years ago.
This means the charge will affect anyone who used a loan scheme, typically via an umbrella company, and who has not paid the intended amount of tax over the last 20 years. HMRC has indicated it expects to protect around £3.2bn in tax by tackling such avoidance schemes, as reported by International Investment.
"The amendment does not change the legislation but will ensure that a review of the impact of the loan charge is published before that date"
The government has accepted an amendment by a cross-party group of MPs who had concerns about the retrospective nature of the tax change and the fact the scheme was used by many ordinary contractors, as the FT reported.
However, now HMRC is stressing that the loan charge legislation was unchanged and the charge would still come into effect on 5 April.
"The amendment does not change the legislation but will ensure that a review of the impact of the loan charge is published before that date," a spokesperson for HMRC said. "We want to do all we can to make it simple for people to get out of these schemes and we're here to help. Anybody who is worried about being able to pay what they owe should get in touch with HMRC as soon as possible on 03000 530 435".
The House of Lords criticised HMRC for drawing up measures that unfairly hit contractors and freelancers rather than the firms which drew up the schemes.
Liberal Democrat MP Ed Davey said: "This review is about an important tax principle. The Government are in effect in breach of the rule of law with the retrospective nature of their loan charge.