Oral Answers to Questions

Debate between Ivan Lewis and Mel Stride

Tuesday 21st May 2019 Commons Chamber

[Mr Ivan Lewis (Bury South) (Ind)]

12. What steps he is taking to support people affected by the 2019 loan charge.

[The Financial Secretary to the Treasury (Mel Stride)]

Disguised remuneration is an aggressive and contrived form of tax avoidance that involves a loan, which there is never any intention of repaying, being routed via a low or no-tax jurisdiction and then back to the United Kingdom, to avoid income tax and national insurance. Her Majesty’s Revenue and Customs takes a measured, proportionate and sympathetic approach to the collection of this tax, which has always been due.

--- Later in debate ---

[Mel Stride]

The loan charge is not retrospective. There has never been a time in the history of our country when the arrangements that I described a moment ago were ever compliant with our tax code. Of course, the loans, which there is no intention of ever repaying—they are simply there to avoid national insurance and income tax—persist into the present. Generous “time to pay” arrangements are available with HMRC; I urge anybody who is involved in avoidance of this kind to talk to HMRC and come to sensible arrangements.

[Mr Lewis]

Is the Minister not aware that the people affected by this charge are strivers and people who are just about managing? They are the people who are suffering as a consequence of this decision. How many times are the Government going to hit ordinary working people, including groups like the Women Against State Pension Inequality, without Ministers fulfilling their responsibilities, intervening in such circumstances and ensuring that common sense prevails?

[Mel Stride]

If we include the loans, the average earnings of those who have been involved in this egregious tax avoidance is twice our country’s national average wage. There is no need for people to get involved in these schemes, the sole purpose of which is to avoid tax. Some Members have raised amounts of some £700,000 or £900,000 that HMRC is pursuing in this context; that would equate to a couple of million pounds going through these schemes. I remind the House that these are schemes that take loans from the UK out to an offshore trust in a low or no-tax jurisdiction and route it back into the UK as a loan that is never due to be repaid, simply for the purpose of avoiding tax. We do not believe that is right.