Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to announce a further review of the Loan Charge in response to the eighth referral of a case to the Independent Office for Police Conduct where a taxpayer has taken their life and used a disguised remuneration scheme.

An independent review of the Loan Charge has already taken place. The 2019 Review, conducted by Lord Morse, concluded that it was right for the Loan Charge to remain in force and right for the Government to collect the tax due, but made a number of recommendations to reduce the impact of the policy.

The Government accepted all but one of the 20 recommendations, and those changes are estimated to have benefitted over 30,000 individuals, removing 11,000 from the Loan Charge entirely.

The charge on disguised remuneration loans is targeted at contrived tax avoidance schemes which seek to avoid income tax and National Insurance contributions by paying users their income in the form of loans, usually via an offshore trust. This kind of tax avoidance deprives the Exchequer of funds to deliver vital public services.

Any loss of life is a tragedy, and the Government’s thoughts are with the families of those affected. The Government will continue to work with HMRC to consider what additional support could be provided to taxpayers who need extra help.