FCA speaks out on demands to repay loans from disguised remuneration schemes

What has happened

The Financial Conduct Authority (FCA) published a statement on 2 November 2026 about demands for people to repay loans, or purported loans, made through disguised remuneration schemes. In these schemes, people, often contractors, consultants and agency workers, were paid for their work through loans instead of a normal salary as a way to avoid tax. HMRC has tackled this through what is known as the loan charge.

The FCA says some people are now getting legal letters that threaten court action and ask for immediate repayment. In these cases the original provider has sold the loans to a third party, and it is the third party asking for the money.

Some of the people affected dispute that they owe anything and question whether the debts can be enforced at all. The FCA explains that if a loan is unenforceable, the borrower cannot be forced to repay it or have assets taken without a specific order. Those seeking payment may ask the FCA for a Validation Order, the formal permission needed before such loans could be enforced. The FCA says it would consider any request carefully and that its agreement is by no means guaranteed. If a Validation Order is needed and is not granted, the debt stays unenforceable.

What it means for you

If you were paid through one of these schemes years ago, a letter demanding repayment can come as a shock, especially if you were told the loans would never need to be paid back. The FCA's message is not to rush. It says anyone who is unsure whether they owe the amount claimed should consider carefully whether to make any payment.

HMRC's guidance explains what to check. It says a lender, and any third party chasing the debt, must usually be authorised by the FCA with the right lending permission. If the original lender was not, the loan is unenforceable. A third party chasing the debt without the right permission or an exemption would be acting unlawfully. Whether a loan can be enforced when the Consumer Credit Act was not followed is a decision for the courts, not for the government or the FCA.

HMRC also says it cannot refund any loan charge you have already paid or change a settlement agreement, and that the government cannot step in to a dispute between two private parties over a loan contract. Disputes go to the courts in the normal way.

Who it affects

People who were paid through a disguised remuneration loan scheme, often as contractors, consultants or agency workers, who now get a letter asking them to repay those loans.

What you can do

• Do not pay straight away. Read HMRC's guidance on repaying a disguised remuneration loan to a third party. HMRC says this is a complex area and recommends independent legal advice from someone who knows disguised remuneration and commercial law.
• If you get a statutory demand, act quickly. GOV.UK says you must apply to challenge a statutory demand within 18 days if you were in the UK when you got it. You can be made bankrupt if you ignore one.
• Check whether the firm asking for money is authorised and has a lending permission on the FCA Register. Check your paperwork too, and contact the original provider if you can to confirm the terms of the loan.
• If you feel pressured or treated unfairly by whoever is contacting you about the debt, the FCA asks you to report it to the FCA. If you have health or money difficulties, or do not understand what is happening, tell the people contacting you.
• If money is tight or you are worried about other debts as well, get free, confidential help from MoneyHelper, StepChange, National Debtline or Citizens Advice.

Sources

Every fact in this page was checked against these official sources on 3 November 2026.

1. Demands for disguised remuneration scheme loan repayments Financial Conduct Authority
2. Repaying a disguised remuneration loan to a third party HM Revenue & Customs (GOV.UK)
3. Make and serve a statutory demand, or challenge one GOV.UK

Written and fact-checked by the PiggyBank editorial team. Published 3 November 2026. This news is general information, not financial advice. How we write and check our guides.