Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the validity of open years within regards to the Loan Charge on (a) the ability of HMRC to recover unpaid tax, (b) the welfare of individuals affected by the Loan Charge and (c) the ability of individuals affected by the Loan Charge to repay designated sums without risking bankruptcy.

The Government takes tax avoidance seriously. The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance. The forecast was last revised at Spring Statement 2022, with the latest estimated overall Exchequer yield of £3.4 billion for the entire package, which includes the Loan Charge.

Individuals are personally responsible for paying the right tax under UK law. Where a taxpayer has outstanding tax on DR loans, HMRC is working to bring these cases to conclusion.

However, HMRC is also committed to ensuring that anyone with concerns about paying what they owe has access to payment support options, including the ability to pay in instalments based on what they can afford and over any length of time needed. HMRC only petitions for bankruptcy as a last resort in a small minority of cases where all other avenues have been exhausted.

The Government knows that some taxpayers need extra help to resolve their DR use at what can be a difficult time for them. All HMRC DR and Debt Management teams are trained to identify and support taxpayers who need extra help. HMRC also signposts organisations such as MIND and Samaritans to help support taxpayers who have mental health issues or who are demonstrating emotional distress.

HMRC published the ‘HMRC issue briefing: settling disguised remuneration scheme use and/or paying the loan charge’ on 11 April 2022. This includes further information about support to help taxpayers settle their outstanding tax liabilities.