Asked by: Alison Bennett (Liberal Democrat - Mid Sussex)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she has considered the potential merits of removing the loan charge for students who withdraw from university in their first year due to health conditions and other mitigating circumstances.
Answered by Josh MacAlister - Parliamentary Under-Secretary (Department for Education)
Students may defer or withdraw from their studies for different reasons including due to health conditions and other mitigating circumstances. Interest will continue to accrue even if a student suspends or withdraws from their course, but current students on Plan 5 loans will only accrue Retail Price Index level interest, without the additional rates of Plan 2.
Interest rates do not impact monthly repayments made by student loan borrowers, which stay at a constant rate of 9% above an earnings threshold to protect lower earners. If a borrower’s income drops below the repayment threshold, or they are not earning, their repayments will stop.
Any outstanding loan will be cancelled if the borrower becomes disabled and permanently unfit for work, and debt is never passed on to family members or descendants.
Asked by: Mohammad Yasin (Labour - Bedford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the adequacy of the proposed loan charge settlement scheme cut off date of 1 June 2021 for excluding taxpayers who have entered into contract settlements with HMRC before that date; and what steps she has taken to help ensure that taxpayers who settled earlier are not disadvantaged compared with those who settle under the new scheme.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The purpose of the review was to bring the matter to a close for people who have not settled and paid their loan charge liabilities. Although the loan charge officially came into force from 6 April 2019, the deadline for settling to avoid being liable to the loan charge was extended because of the Morse Review. The settlement opportunity applies after 1 June 2021 because it is from that date onwards that loan charge settlements were agreed.
The review identified affordability as a key barrier preventing those individuals from settling and made recommendations to remove this barrier. The Government accepted all but one of the review’s recommendations and will legislate to give HMRC the power to administer a new settlement scheme.
The Government has no plans to apply the recommendations of the review beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Alicia Kearns (Conservative - Rutland and Stamford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Government plans to extend the improved settlement terms announced following the McCann Review to individuals who have already settled their Loan Charge liabilities with HMRC.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Alicia Kearns (Conservative - Rutland and Stamford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people she expects to settle their disguised remuneration liabilities as a result of the McCann Review into Loan Charge settlement terms.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Lee Dillon (Liberal Democrat - Newbury)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she plans to offer the same settlement terms to those facing the Loan Charge as were offered to individuals who previously settled with HM Revenue and Customs.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Gareth Bacon (Conservative - Orpington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the the value for money of the Loan Charge.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Gareth Bacon (Conservative - Orpington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of offering the same terms to be given to those facing the Loan Charge to those who have previously settled with HMRC.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Gareth Bacon (Conservative - Orpington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of the number of people who will settle their disguised remuneration liabilities as a result of the McCann Review into Loan Charge settlement terms.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge.
The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so.
As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann.
The Government’s response to the review represents a fair and proportionate attempt to provide a route to resolution for those who have not yet been able to settle with HMRC. In turn, this requires those individuals to now come forward and engage with HMRC in good faith.
Tax avoidance deprives the Exchequer of funds needed to deliver vital public services and it is right that resources are targeted to stop this. There are no plans to apply the review’s recommendations beyond those individuals and employers with outstanding liabilities that were the focus of the review.
Asked by: Peter Swallow (Labour - Bracknell)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to implement the recommendation of the Independent Loan Charge Review 2025 on holding promoters of loan charge schemes to account.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
As set out in the Government’s response to the Loan Charge Review, since the Loan Charge was introduced, HMRC’s approach to tackling promoters has become far more robust.
The Government is also introducing new powers in Finance Bill 2025/26 to close in on promoters of marketed tax avoidance and the other professionals who market or enable tax avoidance schemes.
These new powers will go further and include more criminal sanctions. This shows the Government’s clear determination to close in on the few remaining promoters by strengthening deterrents and introducing significant additional consequences for promoters who continue promoting tax avoidance schemes.
The Government will also publish a consultation in early 2026 on further measures for tackling promoters of avoidance.
Asked by: Martin Vickers (Conservative - Brigg and Immingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether HM Revenue and Customs has updated its assessment of the number of suicides linked to the loan charge since January 2023; and whether the Government plans to publish updated figures on a routine basis.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government promised to commission a new independent review of the loan charge and that is what it delivered. The purpose of the review was to bring the matter to a close for people who have not settled and paid their loan charge liabilities. The Government accepted all but one of the review’s recommendations and in a number of instances has decided to go further.
Most notably, we decided to write off the first £5,000 of everyone’s liability, providing significant relief to those with the lowest liabilities who are more likely to have been lower earners and targeting support at those who most need it. Because of the decisions the Government has taken, around 30 percent of people within scope of the review could have their liabilities removed entirely. Most other individuals will see their liabilities reduced by at least half.
HMRC are committed to supporting customers through this process and are working hard to give them certainty on their tax positions as quickly as possible. This includes a dedicated service to guide customers through the settlement process and provide extra support for those who need it. Anyone who is worried about a tax liability should get in touch with HMRC as soon as possible. HMRC can provide reasonable adjustments to meet an individual’s needs and is working with Samaritans to provide guidance to advisors and signposting taxpayers where needed to a dedicated Samaritans helpline.
Any loss of life is a tragedy. The government and HMRC take the safeguarding of individuals and issues relating to loss of life extremely seriously. HMRC has a statutory obligation to refer incidences of death or serious injury of a customer, where there is an indication that HMRC contact may have directly or indirectly contributed to the event, to external oversight bodies. Since March 2019, HMRC has made eleven referrals to the Independent Office for Police Conduct where a taxpayer has sadly taken their life and had used a disguised remuneration scheme. HMRC does not currently have arrangements in place to routinely publish these figures.