Mentions:
1: John McNally (SNP - Falkirk) I also thank the all-party group on the loan charge and taxpayer fairness and the Loan Charge Action - Speech Link
2: Jim Shannon (DUP - Strangford) The loan charge policy is unjust and unworkable. - Speech Link
3: Wera Hobhouse (LD - Bath) The loan charge has not even achieved its intention. - Speech Link
Written Evidence Dec. 14 2023
Committee: Public Accounts CommitteeFound: HMRCSR0018 - HMRC Standard Report 2022-23 Loan Charge & Taxpayer Fairness APPG Written Evidence
Correspondence Mar. 19 2024
Committee: Treasury Committee (Department: HM Treasury)Found: to Jim Harra, HM Revenue & Customs, relating to Disguised Remuneration Tax Avoidance Schemes and the Loan
Correspondence Mar. 19 2024
Committee: Treasury Committee (Department: HM Treasury)Found: HM Revenue & Customs, to the Chair relating to Disguised Remuneration Tax Avoidance Schemes and the Loan
Asked by: Drew Hendry (Scottish National Party - Inverness, Nairn, Badenoch and Strathspey)
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.
Asked by: Janet Daby (Labour - Lewisham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of people who have been affected by the loan charge.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
In September 2023, HM Revenue and Customs published an updated issue briefing on disguised remuneration and the loan charge. The issue briefing contains information at UK level and is available on GOV.UK here:
Asked by: Ranil Jayawardena (Conservative - North East Hampshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will have discussions with HMRC on ending actions on the loan charge.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Loan Charge was introduced to ensure that people who had not had tax deducted from their incomes paid their fair share.
The Government has already had an independent review. In 2019 Lord Morse led an independent review of the Loan Charge and its implementation. Lord Morse had full discretion over how the review was run, whom he consulted, and the recommendations made. The Government accepted 19 of his 20 recommendations, which benefited more than 30,000 people, including around 9,500 who were removed from the scope of the Loan Charge entirely.
As well as recommending changes to the policy, Lord Morse was clear that the Loan Charge was necessary, in the public interest and should remain in force.
Asked by: Ranil Jayawardena (Conservative - North East Hampshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will commission an independent review into the loan charge.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Loan Charge was introduced to ensure that people who had not had tax deducted from their incomes paid their fair share.
The Government has already had an independent review. In 2019 Lord Morse led an independent review of the Loan Charge and its implementation. Lord Morse had full discretion over how the review was run, whom he consulted, and the recommendations made. The Government accepted 19 of his 20 recommendations, which benefited more than 30,000 people, including around 9,500 who were removed from the scope of the Loan Charge entirely.
As well as recommending changes to the policy, Lord Morse was clear that the Loan Charge was necessary, in the public interest and should remain in force.
Apr. 23 2024
Source Page: I. Universal Credit guidance April 2024 [update of previous guidance, deposited Oct 2023, DEP2023-0791]. 204 docs. II. Letter dated 15/04/2023 from Jo Churchill MP to to the Deposited Papers Clerk regarding documents for deposit in the House libraries. Incl. file list at Annex 1. 9p.Found: ) Claimants must correctly sign a Loan Agreement and Charge Form before receiving SMI.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what assessment they have made of the impact of interest rate charges on Government student loan financing, following research by the Institute for Fiscal Studies which showed that higher interest rates will add more than £10 billion per year to the cost of England’s student loan system.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
Student loans are valued in the department’s annual accounts in line with the International Financial Reporting Standard 9 and set out in The Government Financial Reporting Manual which is attached.
Under which where future cash flows are discounted to measure the fair value of a financial asset, this should be done using the higher of the rate intrinsic to the financial instrument or the HMT discount rate. HMT set the discount rate annually based on a 10 year rolling average of gilt yields. For student loans the intrinsic rate would be the discount rate that gave a Resource Accounting Budget (RAB) or stock charge of 0%, so the HMT discount rate is used provided the RAB charge is greater than 0%. Should the HMT discount rate result in a RAB charge calculation giving a negative value then the intrinsic rate is used instead, meaning that that RAB charge will take a value of 0%.
The most recent forecasts for the student finance system can be found here: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-for-england/2022-23.
The net present value of future repayments was calculated by discounting all future repayments at a rate of RPI -1.3% per year until the end of financial year 2029/30, and -0.2% per year from financial year 2030/31, to the same point in time as the loan outlay or loan balance. This is the discount rate for financial instruments set by HMT in 2022 and is intended to reflect of the cost of government borrowing. The most recent student loan forecasts using the 2023 discount rate set by HMT will be published at the end of June 2024.
The department has carefully assessed the impact of changes and published a full and comprehensive analysis in the Higher Education Reform and Consultation Document Equality Impact Assessment, which is attached.
The student loan repayment system under Plan 5 is progressive, with repayments being positively correlated with lifetime earnings. The highest earners make the largest individual contributions to the system overall, and the lowest earners are required to contribute the least.
Lower earners, whether male or female, are protected. If a borrower’s income is below the repayment threshold, they will not be required to make any repayments at all. At the end of the loan term, any outstanding loan debt, including interest accrued, will be written off at no detriment to the borrower. No commercial loans offer this level of protection.
The department will continue to keep the student finance system, including repayment terms, under review to ensure that it remains sustainable and delivers value for money for students and the taxpayer.