Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing a means tested loan charge repayment scheme.

The Government estimates that 50,000 individuals were affected by the Loan Charge and that following the implementation of the Loan Charge Review’s recommendations, about 11,000 will be taken out of its scope altogether, and more than 30,000 will benefit from the changes. One significant change is to allow taxpayers to split their loan balance evenly across three tax years.

People will not to have to pay their Loan Charge debts in one go. Where a taxpayer cannot pay in full on time, HMRC will seek to agree payment by instalments with them. The payment plan agreed will be based on what the taxpayer can afford and there is no upper limit over how long HMRC can potentially spread payments.

HMRC will not require payment of more than 50% of disposable income, aside from where taxpayers have very high disposable incomes. Where a taxpayer has no disposable assets and earns less than £50,000, they are automatically entitled to a minimum of a five-year payment plan, and where they earn less than £30,000, a minimum of seven years. HMRC have also committed that they will not force a taxpayer to sell their main home or release their existing pension to fund a disguised remuneration or Loan Charge tax bill.

HMRC have established a dedicated team to handle enquiries from Loan Charge taxpayers. Any taxpayer unable to pay in full and needing a payment plan should contact the Loan Charge helpline on 03000 599110.