Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will (a) make a statement on his assessment of the impact of the loan charge on families and (b) make an assessment of the potential merits of introducing a right of court appeal for people experiencing significant contested charges.

This question was answered on 2nd December 2021

The Government takes concerns about the wellbeing of all taxpayers very seriously and recognises that the Loan Charge can add a significant pressure for some taxpayers.

The impact of the Loan Charge on those affected was assessed ahead of the introduction of the policy and was considered as part of the Independent Loan Charge Review, led by Lord Morse in 2019.

The November 2017 Tax Information and Impact Note which covered the Loan Charge stated that it was not expected to have a material impact on family formation, stability, or breakdown, because the impact was assessed across the entire UK population, of which users of affected avoidance schemes make up a very small minority.

In his independent review, Lord Morse recommended that future published Government impact notes of tax changes should consider the direct impact on the affected population, rather than looking at the impact across the entire UK population. This is one of the 19 recommendations that the Government accepted to mitigate the impact of the Loan Charge and to ensure that the right support is in place for those who need it.

HMRC’s powers are balanced by a comprehensive suite of safeguards for taxpayers, and the Loan Charge follows these. All taxpayers have the right to appeal tax decisions made by HMRC, and that right includes the opportunity to appeal to an independent tribunal. Where someone disagrees with HMRC’s assessment that the Loan Charge applies, they are able to appeal that decision.