Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to issue a Command Paper in relation to the Disguised remuneration: independent loan charge review.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The loan charge was independently reviewed by Lord Amyas Morse in 2019, who assessed the impact of the policy on affected taxpayers. The Government accepted all but one of the Review’s 20 recommendations.

To bring the Review’s publication to the attention of Parliament, a Written Statement was made on the day (20 December 2019: UIN HCWS14). The Statement is available here: https://questions-statements.parliament.uk/written-statements/detail/2019-12-20/hcws14.

There are no plans to issue a command paper.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people have been refunded by HMRC due to changes made by the Morse Review; and what the total amount of money refunded is.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Remuneration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

By the end of March 2023, HMRC had processed over 2450 applications, of which over 1400 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible. The total value of repayments, waivers or both that have been made by that date was over £180 million.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people who have requested a refund under the changes resulting from the Morse Review have been refunded by Her Majesty's Revenue and Customs.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Remuneration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

By the end of November 2022, HMRC had processed approximately 2400 applications, of which approximately 1375 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds due to the changes made by the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance which was costed as a whole. At Spring Statement 2022, this package was estimated to bring in an estimated overall Exchequer yield of £3.4 billion. The changes resulting from the 2019 independent review of the Loan Charge are estimated to reduce the Exchequer yield by £620 million.

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the DR Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 28 October 2022, HMRC had processed over 2350 applications, of which over 1350 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds as a result of changes made in response to the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

I refer the Hon. Member to the answer given to UIN 80825.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many and what proportion of people seeking refunds due to the changes recommended by the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Renumeration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 28 October 2022, HMRC had processed over 2350 applications, of which over 1350 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds due to the changes made by the Morse Review have been refunded by HMRC to date.

Answered by Richard Fuller

I refer my hon. Member to the answer that was given to the Question UIN 59171.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Independent Loan Charge Review: report on the policy and its implementation, published in December 2019, if he will make an assessment of the adequacy of access to information given to Lord Morse to enable him to report on HMRC’s approach to implementing the Loan Charge.

Answered by Richard Fuller

The Independent Loan Charge Review, led by Lord Morse, drew upon all the available evidence and expert advice to consider the appropriateness of the Loan Charge as a policy response, and its impact on individuals, reflecting the main concerns that had been raised by MPs and campaigners. Lord Morse had full discretion over how the review was run, which stakeholders he engaged with, and the recommendations he made.

The Government recognised the concerns raised by the Review and accepted all but one of the Review’s 20 recommendations. The Government implemented a number of changes to the Loan Charge which were enacted in Finance Act 2020. On 3 December 2020, HMRC published a full report to Parliament on the implementation of the review recommendations. This report set out how HMRC has delivered the 19 recommendations which were accepted by the Government.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds due to the changes made by the Morse Review have been refunded by HMRC.

Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport

The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance. The forecast was last revised at Spring Statement 2022, with the latest estimated overall Exchequer yield of £3.4 billion for the entire package, which includes the Loan Charge.

In September 2019, the Government commissioned an Independent Review into the Loan Charge, led by Lord Morse. The Government accepted 19 of the 20 recommendations made by the review. Changes to the Loan Charge were estimated to reduce the forecast yield by £745 million at Budget 2020.

HMRC will go to the employer to settle the tax due or collect the Loan Charge in the first instance. Approximately 80 per cent of the £3.3 billion HMRC brought into charge through DR settlements between Budget 2016 and the end of March 2021 was from employers.

However, HMRC will consider other options to collect the tax where collection from the employer is not possible, such as when the employer no longer exists or is based offshore.

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the DR Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 3 June 2022, HMRC had processed approximately 2100 applications, of which approximately 1300 had received either a repayment, a waiver, or both. Approximately 800 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask Her Majesty's Government whether they will publish a table showing the number of promoters of disguised remuneration schemes who have been prosecuted; and the outcomes of such prosecutions.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

Promotion or operation of mass marketed tax avoidance schemes is not in and of itself a criminal offence. However, there are a range of offences which might be committed by those who promote tax avoidance schemes or advise on their use.

On that basis, one individual involved in the promotion of Disguised Remuneration (DR) schemes has been prosecuted. They received a sentence of two years imprisonment, suspended for two years, and 300 hours of “unpaid work”.

A number of individuals are currently under criminal investigation by HMRC for offences linked to DR Schemes.

In addition, since 1 April 2016, more than 20 individuals have been convicted for offences relating to arrangements which have been promoted and marketed as tax avoidance. These have resulted in over 100 years of custodial sentences. The majority of these convictions relate to promoters.

The Government and HMRC are committed to tackling promoters and operators of tax avoidance schemes. This includes challenging the entities and individuals who promote DR loan schemes.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds as a result of the changes to the Loan Change made in response to the Morse Review have been refunded by HMRC.

Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport

This question is answered on the basis that your question is about HMRC’s Disguised Remuneration (DR) Repayment Scheme 2020. Following Lord Morse’s Independent Loan Charge Review in 2019, the Government introduced legislation requiring HMRC to establish a scheme to repay relevant Voluntary Restitution elements of DR settlements.

These amounts were voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 28 January 2022, HMRC had processed approximately 1500 applications, of which approximately 1000 had received either a repayment, a waiver, or both. Approximately 500 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what progress has been made on implementing the recommendations of the Morse Review into the Loan Charge; and what work remains outstanding.

Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport

The Government announced the Loan Charge at Budget 2016, deciding that the Loan Charge is the right way to tackle and draw a line under the use of Disguised Remuneration (DR) schemes.

The Independent Loan Charge Review was led by Lord Morse in 2019. The Review drew upon all the available evidence and expert advice to consider the appropriateness of the Loan Charge as a policy response and its impact on individuals, reflecting the main concerns that had been raised by MPs and campaigners.

The Government recognised the concerns raised by the Review and accepted 19 of the Review’s 20 recommendations. The Government implemented a number of changes to the Loan Charge, which were enacted in Finance Act 2020.

On 3 December 2020, HMRC published a full report to Parliament on the implementation of the review recommendations. This report set out how HMRC had delivered the 19 recommendations which were accepted by the Government.