The Revenue said it will start charging people and businesses who use disguised remuneration loans, which are arrangements that pay loans instead of ordinary income to avoid income tax and National Insurance Contributions.
HMRC predicts that 50,000 individuals will be affected by the loan charge, with 65% of them in the business services sector.
The new charge, known as the 2019 loan charge, will target “ineffective” schemes that “have always been an attempt to avoid tax”, since despite being called loans, they are provided on terms that mean they are unlikely to be repaid.
It will apply to those who have used the tax avoidance schemes since April 1999 and not repaid their loan by April 2019.
According to data by HMRC, those involved earned on average twice as much as the average UK taxpayer, with 70% of them using these schemes for two years or more.
A spokesperson for HMRC said, “We recognise that the cost of settlement will be significant for some people and we want to make the process as simple as possible for those who want to settle ahead of the loan charge arising. These revised terms make it easier for people to put their past avoidance behind them and settle what they owe.
“Anyone not covered by these terms should get in touch, as we will consider extended payment periods based on individual circumstances.”
The Revenue said it will allow scheme users to spread their payments over five years if their taxable income in the tax year 2018 to 2019 is estimated to be less than £50,000.
Miles Dean, managing partner at Milestone International Tax, said, “The proliferation of umbrella company structures, often involving employee benefit trusts (EBTs), loan arrangements and share option arrangements, is of significant concern.
“The 20-year rule applies where there has been deliberate tax avoidance. Just because the taxpayer might be a nurse or keyworker does not absolve them from their obligations to HMRC, however harsh this may seem.
“Much like film schemes and other tax avoidance arrangements that are heavily marketed, umbrella companies carry a risk that HMRC will challenge them, particularly where key elements of the arrangements, such as loans, are not commercial in nature."
Users of disguised remuneration schemes have been urged to contact HMRC by 30 September 2018.