Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential number of people who could become bankrupt due to the Loan Charge and the use of section 684 discretion.

No assessment has been made of the number of people who may be declared bankrupt as a result of debts arising from the use of a disguised remuneration avoidance scheme.

Where debts arise, HMRC are not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some individuals may choose to enter insolvency themselves based on their overall financial position.

HMRC only ever considers insolvency as a last resort, and they encourage taxpayers to get in contact to agree the best way to settle their tax debts. To date, HMRC has not initiated insolvency proceedings against any taxpayer for a Loan Charge debt.

Anyone who is worried about being able to pay what they owe should contact HMRC, who may be able to agree an instalment arrangement based on the individuals’ financial circumstances. There is no maximum length for these arrangements.