Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many promoters and operators of schemes subject to the Loan Charge have been prosecuted for promoting and operating those schemes.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the hon. Member for Ealing Central and Acton to the answer I gave on 20 March 2023 to Question UIN 162288 .
Asked by: Mike Amesbury (Labour - Weaver Vale)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of carrying out a new review of the Loan Charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The 2019 Independent Loan Charge Review drew upon all the available evidence and expert advice to consider the appropriateness of the Loan Charge, and its impact on individuals, reflecting the main concerns that had been raised by MPs and campaigners. The Government accepted all but one of the twenty recommendations in the review.
There are no plans for a further independent review.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many businesses have been penalised for marketing or promoting schemes subject to the loan charge as of 2 May 2023.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
A key part of HM Revenue & Customs’ (HMRC) 2020 strategy for tackling promoters of tax avoidance schemes, such as disguised remuneration (DR) schemes that are within scope of the Loan Charge, is to change their behaviour so that they stop this activity altogether.
HMRC uses a wide range of civil and criminal measures to tackle those who promote tax avoidance. For example, Finance Acts 2021 and 2022 provided HMRC with powers to publish the details of avoidance schemes and those who promote or operate them, in order to support taxpayers in identifying these schemes so they can steer clear or exit them.
HMRC has started to issue stop notices to promoters under the Promoters of Tax Avoidance Schemes legislation. These require them to stop promoting the tax avoidance scheme specified in the notice. Penalties of up to £1 million can be issued for failure to comply. In 2022, the First-Tier Tribunal imposed a penalty in excess of £1 million on a promoter for failing to disclose a scheme under the Disclosure of Tax Avoidance Schemes regime.
As a result of the action the Government has taken to clamp down on marketed tax avoidance, a number of major promoters have now cooperated with HMRC and have either stopped selling schemes or ceased business altogether, and the estimated tax gap from marketed avoidance sold primarily to individuals, has fallen from an estimated £1.5 billion in 2005-2006 to £0.4 billion in 2020-2021.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an estimate of the number of people who may declare bankruptcy as a result of (a) the loan charge and (b) other related HM Revenue and Customs activity.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Rt. Hon Member to the answer that I gave on 6 February to the Hon Members for Richmond Park, UIN 136718 and Strangford, UIN 137775.
Asked by: Fleur Anderson (Labour - Putney)
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.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of an independent investigation into the (a) Loan Charge, (b) conduct of HM Revenue and Customs in relation to that Charge and (c) consequences of that conduct for people subject to that Charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Hon Member to the answer that I gave on 16 March to the Hon Member for Portsmouth South, UIN 162282.
Asked by: Ben Bradley (Conservative - Mansfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is planning to take to support individuals affected by the Loan Charge in Mansfield constituency.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
HM Revenue and Customs is committed to, wherever possible, identifying taxpayers who need extra help and giving them the support they need.
HMRC can agree an affordable and sustainable instalment plan based on taxpayers’ specific circumstances and for as long as they need. These Time to Pay arrangements are flexible and can be amended if the customer’s circumstances change.
HMRC can also refer taxpayers for free debt advice that is independent from HMRC.
Taxpayers are supported by HMRC’s trained advisers, including dedicated Extra Support Teams. Where appropriate, HMRC will signpost taxpayers to voluntary and community organisations. HMRC remains committed to strengthening the customer support it provides. For example, HMRC's Extra Support Teams and Samaritans are working together to deliver an 18-month project. This includes providing additional guidance to identify taxpayers who might be in vulnerable circumstances, and signposting them, where needed, to a dedicated Samaritans helpline for specialist emotional help they may need.
Asked by: Luke Pollard (Labour (Co-op) - Plymouth, Sutton and Devonport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of establishing an independent review of the loan charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Hon Member to the answer that I gave on 16 March to the Hon Member for Portsmouth South, UIN 162282.Asked by: Stephen Morgan (Labour - Portsmouth South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many promoters and operators of schemes subject to the Loan Charge have been prosecuted for promoting and operating those schemes.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
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, to date, a number of individuals are currently under criminal investigation by HMRC for offences linked to schemes subject to the Loan Charge.
In addition to schemes subject to the Loan Charge, 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, including offences related to disguised remuneration. These have resulted in over 100 years of custodial sentences, the majority of which relate to promoters.
HMRC are committed to continuing to tackle promoters and operators of tax avoidance schemes. Spring Budget announced a consultation to strengthen the deterrent further by introducing a new criminal offence to make it abundantly clear promoters must stop and, building on a package of recent reforms, to ensure directors can be disqualified from companies which promote avoidance.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the conclusions of the Morse Review, for what reason HMRC are pursuing people for pre-2010 tax years, in relation to Loan Charge legislation.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
In the 2019 Independent Loan Charge Review, Lord Morse recommended that the Loan Charge should only apply to loans made on or after 9 December 2010.
However, he was also clear that, for years before this date, where there is an open enquiry or assessment under appeal, HM Revenue and Customs (HMRC) should continue with enquiries and settling cases under their normal powers.
HMRC continues to work with and support taxpayers to resolve all outstanding enquiries and assessments relating to their use of disguised remuneration (DR) loans, in accordance with their published DR settlement terms and HMRC Litigation and Settlement Strategy.