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What the 2019 loan charge means for taxpayers now it’s in place

What the 2019 loan charge means for individuals now it’s in place

Announced in the 2016 Budget, the 2019 loan charge has been developed by HM Revenue and Customs (HMRC) to clamp down on the use of loan schemes in recent years and to nudge those who used those scheme to settle.

According to HMRC, an estimated 50,000 people are believed to have used loan schemes or ‘disguised remuneration schemes’ which will be affected by the loan charge.

Historically, some firms entered into arrangements which allowed a company to reward its employees via a loan made by a third party, often an employee benefit trust, with the company receiving a corporation tax deduction and the loan not being taxable in the hands of the recipient.

But in recent years, HMRC believe that scheme providers have exploited various parts of the existing legislation, which has enabled some individuals to avoid paying Income Tax and National Insurance at an estimated cost to HMRC of £3.2billion.

In HMRC’s words, it ‘has never approved these schemes and has always said they don’t work.’ And it has implemented the loan charge in an effort to put a stop to loan schemes.

Industry-wide impact

Implemented on April 5 2019, the loan charge applies to anyone who has used a relevant loan scheme over the last 20 years.

The vast majority of those affected by the charge work within business services, which includes IT consultants and management consultants, and construction workers. This breakdown, taken from the HMRC website, illustrates where the impact of the charge will be felt:

Business services – 65%
Construction – 10%
Engineering – 4%
Medical and education services – 3%
Accountancy – 2%
Dentistry – 2%
Retail distribution – 2%
Other professional and technical services – 2%
Social and community services – <2%
Recreational services – <2%
Other financial activities – <2%
Other transport and storage – <2%

Repayment options

The options for anyone affected by the loan charge were to:

1. Repay the loan – before April 5, 2019.
2. Try to voluntarily agree to settle – any income tax and interest, before April 5, 2019.
3. Pay the loan charge – in many cases this option is likely to be more expensive than settling.

The charge is calculated by adding the amounts taken as tax-free loans over the relevant years together and taxing them as earned income in one year (2018–19) at the marginal rate of tax. The tax bills for people who have repeatedly used schemes will be higher than those who have used them once.

HMRC has stressed it wants to help people who have previously used loan schemes to get reach a settlement. It is offering flexible payment options for those who may find it difficult to pay the resulting tax liability.

For anyone who is currently in the settlement process, but has not finalised their Settlement with HMRC, as long as there are no delays caused by the taxpayer HMRC have confirmed that they will settle with the taxpayer despite the fact we have gone past the 5 April 2019, the date where the Loan Charge was triggered.

For everyone else details of relevant outstanding loans will need to be reported to HMRC and the Loan Charge paid.

There is still significant pressure for the Loan Charge legislation to be looked at again. It remains to be seen if there will be any changes implemented, or whether the change of Treasury Minister has any impact on the matter.

A turning point for Liyla

Liyla’s story

On Thursday 18th April we had a fundraising day for Liyla Cooper – the granddaughter of our lovely PA, Carol Cooper. 

Liyla has a rare genetic syndrome called ‘Angelman Syndrome’. It is a complex disorder which primarily affects the nervous system. Characteristic features of this condition include delayed development, intellectual disability, severe speech impairment, and problems with movement and balance (ataxia).

After seeing dramatic progress with her walking over the past few months the family are trying to collect funds for special physio sessions called Bobath Physio, costing £97 each time. Her story hit the local newspapers as her determination to walk couldn’t go unnoticed. 

Fundraising Day at Ormerod Rutter

We were keen to help the family by having a fundraising day throughout all our offices at Droitwich, Bromsgrove, and Kidderminster. All the staff here at Ormerod Rutter got involved with a charity bake sale as well as donating £2 each for a dress down day in blue and yellow – to match the ‘Angelman syndrome’ logo. 

One of our staff members took the time to hand make a teddy bear as a gift for Liyla, which was very well received!

On Instagram, we received heart-warming messages from people all over the world who are aware of Angelman syndrome. Rachel from Dubai said ‘Congratulations, what lovely support for Liyla! My daughter Leah, who is 20, also has the condition. We wish you all the best.’ 

We had lots of donations for a raffle from local companies including Aztec Aqua Park at Upton Warren, Marriotts Little bakery in Malvern and Droitwich Back and Neck clinic. We would like to say a massive thank you to all those local companies that got involved in Liyla’s fundraising day, including our generous clients who donated to her just giving page from all over the country. 

In total, we raised £677

We loved having Liyla here, she walked confidently in front of our staff members with the help of her loving family. Despite any obstacles in her way, she is a happy, determined little girl with a beautiful smile that touched our hearts!

From everyone here at Ormerod Rutter we wish Liyla and the family all the best.

A helping hand

The Bobath Physio has been a huge turning point for Liyla to help her walk; If you would like to read more on her story and donate to her page please follow the link –

Why do i need an accountant?

Your questions – answered: ‘Why do I need an accountant?’

This is a question most business owners find themselves thinking about, especially when they’re first starting out.

This is either because they’re aware of the fact many other businesses employ the services of an accountant or using an accountant has been recommended to them, or both.


Here’s our answer to this frequently-asked key question:

Using an accountant provides businesses with peace of mind that their financial affairs are in order, up to date and comply with the latest industry regulations and HMRC’s requirements (which can come with hefty penalties if ignored or missed).

Accountants are responsible for making sure individuals and companies maintain clear and accurate records of their financial performance. They also keep businesses updated on changes to the tax law, such as Making Tax Digital, and help them make the relevant adjustments so that their financial records adhere to the latest guidance.

While accountants may help businesses in areas, such as book-keeping and payroll, self-assessment and VAT returns on a day-to-day basis, they are also on hand to help business owners make informed decisions about their future direction.

Many leading accountants provide strategic financial planning and tax-saving advice that enable companies to save money. They can also help business owners make more money too by advising on the right wealth-building strategies.

Overall, their role is to implement efficient systems and offer proactive, hands-on support throughout the year that helps businesses grow financially stronger.

So many businesses organisations don’t use an accountant because they think it’s easier for them to take care of their financial affairs themselves or want to save money which, in some instances, may be the case.

However, with over 35 years’ experience of providing accounting and financial services, we’ve found that having an accountant in your team is always the best route. Especially when business owners become too busy to stay on top of their business’ financial affairs or find that taking care of their accounts is preventing them from spending valuable time on their business.

Are you unsure about whether or not you need an accountant? The quickest and easiest way to find out is by getting in touch with us for an initial consultation.

It’s free of charge, there’s no obligation to use our services and it will help you see why so many businesses (potentially including yours) do need an accountant. To arrange your free consultation, contact us on 01905 777600 or

Spring Statement 2019

Chancellor Philip Hammond delivered this year’s Spring Statement during what is an uncertain time for the economy and businesses.

Our summary below provides an overview of the latest measures, and includes updated forecasts for the UK economy and public finances, as published by the Office for Budget Responsibility. The Chancellor pledged to bring forward the £700 million reforms for business apprenticeships, and also announced that a £26.6 billion ‘deal dividend’ would be made available to help boost the economy, providing a Brexit agreement can be reached.

We also look ahead to some of the key tax and business changes coming into effect in the new tax year.

For advice on any of the topics covered in our Spring Statement summary, and how they may have an impact on your business or personal finances, please give us a call on 01905 777600

Click here to download

Welcoming our 200th member of staff to the team

As chartered accountants, you’ll usually find us focusing on our clients’ figures, but we’ve been focusing on a rather special figure of our own recently.

We’ve been looking after clients for over 35 years and have just welcomed our 200th member of staff to the team.

With eight offices across Worcestershire, we’ve grown into one of the largest independent practices in the Midlands.

Here’s what our Senior Partner, Peter Ormerod, has to say about our latest staff milestone and success story so far:

“We’re really proud to have hit this milestone. It’s an incredibly special achievement for us.

“Over the years, we’ve grown and developed our services as the needs of our clients and the business world in general have changed. I’m extremely proud that we’ve maintained our friendly, accessible and highly professional approach to business.

“We’re always keen to strengthen our team and many of our senior accountants and advisors started life on our award-winning apprenticeship scheme.

“Our home-grown talent is a source of great pride, but we’ve also welcomed new partners to the board, who are experienced specialists in their own fields, and further strengthen the level of strategic business advice we offer.

“In an ever-changing business climate, we’ve expanded the services we offer to include HR, IT and property tax advice, in addition to our core services of accounts, audit, bookkeeping, tax and VAT advice.”

“We’re committed to maintaining our culture of family firm personality with a big firm capability.“

For more information about our wide range of services visit here. In the meantime, if you’d like to discuss your requirements with us, contact us on 01905 777600 or


Ormerod Rutter on the move with a bigger Bromsgrove base!

Ormerod Rutter have recently returned to Regency House in Birmingham Road, Bromsgrove to expand our base in the town centre and offer support to more members of the local business community.

The Bromsgrove office is led by senior partner Julian Dyer and accounts manager Doug Marshall, who has been instrumental in developing our apprenticeship scheme. Now entering its fifth year, the initiative has gone from strength to strength, and we’re really pleased to announce that we’ve been shortlisted for the Worcestershire Apprenticeships Employer of the Year 2015.

Both the office at Bromsgrove and our headquarters in Droitwich will be taking on more apprentices in September as we maintain our commitment to providing career opportunities for talented young people in the West Midlands.

Julian commented that “We pride ourselves on having the expertise across the firm to look after our clients’ financial needs throughout their business journey. As we started as a family firm over 30 years ago, we appreciate what it takes to build a successful business.”

One of our specialisms at this office is research and development tax relief, which rewards forward-thinking businesses who invest in innovation. It’s surprising that many local businesses are unaware they could be eligible, and we would urge them to consider if they fall within the guidelines to claim the relief.

To find out if you could be eligible for R&D Tax Relief, download our free help sheet now.


National Apprenticeship Week 2015


Here at Ormerod Rutter we’ve run a successful Apprenticeship scheme for the past three years. This week is National Apprenticeship Week 2015 and we have just launched our 2015 vacancies as we begin to recruit for another round of apprentices to join our fast growing business.

Current apprentices Charlotte and Sam gave a talk at Alcester Grammar Sixth Form about their experiences to help inspire other young people to consider this career path. Our past and present apprentices also gathered for a selfie outside our Droitwich office to support Worcestershire Apprenticeships, who are aiming to drive economic growth in the region by increasing the number and range of apprenticeships available.

Our apprentices shared their thoughts about their experience and how it’s helped them with their future plans:

What made you want to do an apprenticeship?

I didn’t feel like university was the right option for me. An apprenticeship lets you learn on the job, without getting into debt, and it gives you hands-on experience.

I don’t think people realise that you can train while you’re earning and actually doing the job with an apprenticeship. For this type of career it’s perfect, you get more experience and you don’t get into debt. Schools and colleges heavily promote university as an option but it’s important to research what else is out there.

What has been the best thing about your apprenticeship?

When you’re in the workplace you get to meet people of all different ages with different backgrounds. It teaches you a lot of skills and gives you a much wider experience. At school you’re always with people your own age but once you start work it really broadens your social skills, and you make lots of new friends!

I’ve been able to get a qualification and learn a lot of practical skills which will really help my future career and I’ve got experience of being in the working environment which I wouldn’t have got from university.

What would be your advice for anyone considering an apprenticeship?

Definitely research your options because an apprenticeship is a really good opportunity to get hands-on experience and avoid getting into debt. A lot of people go to university for the lifestyle but you can have just as much fun as an apprentice! You’ll develop a lot of transferable skills and experience that will help in your future career too.


If you’re considering an apprenticeship, we currently have vacancies for 2015. Please see the careers section of our website for more details, call 01905 777600 or email our senior HR advisor Jayne Spiers at

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