Oral Answers to Questions

Debate between Julian Lewis and Jesse Norman

Tuesday 27th April 2021 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

Promotion or enablement of a tax avoidance scheme is not, in and of itself, a criminal offence, as we have regularly debated in this House. However, there have been numerous cases in which Her Majesty’s Revenue and Customs has made arrests or prosecuted people in relation to fraud, and particularly in relation to disguised remuneration loan-busting schemes.

[Dr Lewis]

My understanding is that very few promoters of these schemes have been prosecuted. Is it not rather shocking that so many people who were mis-sold the schemes on the basis that they were perfectly legitimate are being pursued so relentlessly, while the promoters are in some cases being allowed to continue their work unhindered?

[Jesse Norman]

The suggestion that promoters are being allowed to do just anything is quite wrong. If my right hon. Friend had looked closely at the current Finance Bill, he would have seen a range of measures in that Bill alone aimed at preventing the promotion of tax avoidance schemes and at the disclosure of tax avoidance schemes, as well as other measures. HMRC takes such issues extremely seriously, and that is why the avoidance tax gap fell from £3.7 billion in 2005-06 to £1.7 billion in 2018-19—a fall of more than 50%.

Loan Charge 2019: Sir Amyas Morse Review

Debate between Julian Lewis and Jesse Norman

Thursday 19th March 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I congratulate my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for New Forest East (Dr Lewis) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate today, and I thank colleagues on both sides of the House for their contributions. It is a measure of the effect they perceive on their constituents that, in these circumstances, they are here in such numbers.

The outbreak of covid-19 has created extraordinary circumstances, and it is important to say up front that the Government are keeping the situation under close review, as elsewhere, and will take a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September. That date has been moved back to give people enough time to respond to the Morse report and its recommendations, but the Government will insist that HMRC takes a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September.

Anyone who believes they may be affected by this should please contact HMRC as soon as possible. Equally, we must recognise that HMRC’s workforce may well be affected by the outbreak. Where appropriate, HMRC has made it clear that it will take steps to support anyone who has been disadvantaged by delays at its end as a result of covid-19. As the House will know, HMRC has already established a helpline to support any businesses and individuals affected. The hon. Member for Bootle (Peter Dowd) raised that issue, and I can confirm the helpline has now been in place for some time and has an expert and supportive staff behind it.

As this debate has made clear, the loan charge, and with it the wider issue of using disguised remuneration schemes to avoid tax, has been the subject of public concern and considerable controversy. Let us be clear that tax is never popular, and my colleagues and I recognise the strength of feeling and sympathise with those who may be subject to the charge. Today’s motion reflects some of the arguments and concerns expressed by colleagues that the loan charge is retrospective and unjust and that the law was not settled, it is claimed, until 2017. If I may, I will deal with each of those charges in turn.

First, however, we need to be clear what we are talking about. Disguised remuneration is a term of art—it is a fancy term—but the House should be under no illusion as to what it amounts to. Such schemes are a form of contrived tax avoidance in which people are paid in the form of a loan with no interest and no intention or requirement to pay the loan back.

[Dr Lewis]

If it were so clear and the schemes were so contrived, why did HMRC not point that out to people at an early stage, so that they would have seen what they were letting themselves become vulnerable to?

[Jesse Norman]

I thank my right hon. Friend for the question. All he needs to do is attend to the detail of the Morse report, in which Sir Amyas Morse goes through the efforts made at that time, before and after 2010, in some detail. That is the basis for the judgment that he reaches about the appropriate relief.