Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people are subject to the 2019 Loan Charge.

The charge on disguised remuneration (DR) loans will apply to outstanding DR loan balances on 5 April 2019. It is targeted at artificial tax avoidance schemes where earnings were paid in the form of non-repayable loans made by a third party. The loans are provided on terms that mean they are not repaid in practice, so they are no different to normal income and are, and always have been, taxable.

The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. Information is not held at constituency or regional level.

HM Revenue and Customs (HMRC) wants to help people put things right and is working hard to help individuals get out of avoidance for good.

Anybody who wants to settle their tax affairs ahead of the 2019 loan charge or who is worried about being able to pay what they owe should get in touch with HMRC as soon as possible. HMRC have already provided a number of assurances, including that they will never force somebody to sell their main home to pay for their DR debt, or the loan charge.

HMRC has also widely publicised a simplification to the process for those who want to settle their use of DR schemes before the loan charge arises on 5 April 2019. DR scheme users who currently have an income of less than £50,000 and are no longer engaging in tax avoidance can agree a payment plan of up to five years without the need to give HMRC detailed information about their income and assets. This arrangement has been extended to seven years for scheme users who have an income of less than £30,000.

Those who consider they need more than five (or seven) years to pay what they owe or who earn £50,000 or more should still come forward and talk to HMRC about payment terms. There are no defined minimum or maximum time periods for payment arrangements but HMRC will ask for more information including details of their income and assets so that they can tailor any payment plan to their individual financial circumstances.

Since the announcement of the 2019 loan charge at Budget 2016, HMRC has now agreed settlements on disguised remuneration schemes with employers and individuals totalling over £1 billion. Around 85% of the settlement yield since 2016 is from employers, with less than 15% from individuals.