Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to ensure the settlement of Loan Charge cases by differentiating between (a) people who entered into tax avoidance schemes in full knowledge of their purpose and (b) people (i) who were entered into those schemes (A) without advice, (B) by their employers and (C) by an advisor and (ii) whose participation in those schemes was a condition of the provision of services.

When working with taxpayers to reach a settlement, HM Revenue and Customs (HMRC) seek to clarify and confirm the relevant facts of each individual case with the taxpayer. To maintain a consistent approach, cases are settled in accordance with HMRC’s Litigation and Settlement Strategy, which requires that HMRC only settle for an amount that is consistent with the law. While the Government has sympathy for anyone who believes they were misled into using disguised remuneration schemes, it is an individual’s responsibility to ensure the accuracy of their tax return and to understand the consequences of their decisions.

The Government will continue to tackle this type of tax avoidance and on 19 March 2020, HMRC published their strategy for tackling promoters of tax avoidance schemes. The strategy sets out HMRC’s work to date and outlines how HMRC will continue to take robust actions against promoters of tax avoidance. The Promoter Strategy is available on GOV.UK.

The Government recognises the importance of taxpayers being able to get reliable tax advice which is competent, professional and trustworthy. In March 2020, the Government issued a call for evidence on raising standards in the tax advice market and has recently published a summary of responses and next steps. As a first step, the Government will consult on introducing a requirement for all tax advisers to hold professional indemnity insurance as a way of providing recourse, protecting taxpayers and raising standards in the tax advice market. The Government will also raise awareness of the HMRC standard for agents and review HMRC powers to enforce this standard.