Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many notices under section 684 of the Income Tax Act 2007 have been issued to individuals with Loan Charge liabilities incurred before December 2010.

In the context of Disguised Remuneration (DR), HM Revenue and Customs (HMRC) has in some circumstances used the power provided under s.684(7A)(b) of the Income Tax (Earnings and Pensions) Act 2003 (the Discretion) to collect the tax owed; and since 2022, HMRC has issued around 2,700 decisions using the Discretion.

In his independent review, Lord Morse recommended that the Loan Charge should no longer apply to loans made before 9 December 2010. However, Lord Morse said “HMRC should continue being able to settle and investigate cases prior to this point under their normal powers where they have appropriate grounds, and a legal basis, to do so”.

In line with this recommendation, HMRC is still seeking to recover the tax due where it had taken the necessary steps in the past to ensure there is an open tax enquiry or assessment which gives it the legal basis to do so.

In May 2022, the Court of Appeal said that HMRC could consider using the Discretion to collect tax directly from the individual who received income through a DR scheme.