Asked by: Daisy Cooper (Liberal Democrat - St Albans)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether HMRC pursues unpaid tax receipts from disguised remuneration schemes operated before 9 December 2010.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
HMRC have open enquiries and assessments into disguised remuneration (DR) use before 9 Dec 2010. These will need to be resolved by way of settlement with HMRC or through litigation.
The Independent Loan Charge Review was clear that HMRC should continue with enquiries and settling cases under their normal powers, including where loans now fall outside the scope of the Loan Charge.
HMRC continues to work with and support taxpayers to resolve all outstanding enquiries and assessments relating to their use of DR loans, in accordance with their published DR settlement terms and HMRC Litigation and Settlement Strategy.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people who were liable for the Loan Charge have taken their own lives.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
Any loss of life is a tragedy, and the Government takes issues relating to loss of life extremely seriously. On 6 January 2023, HM Revenue and Customs wrote to the Treasury Select Committee to inform them that ten referrals have been made to the Independent Office for Police Conduct (IOPC) where a taxpayer has sadly taken their life and used a disguised remuneration scheme. HMRC made the first of these referrals to the IOPC in March 2019. Following referral HMRC has conducted internal investigations, eight investigations have concluded and there was no evidence of misconduct by any HMRC officer. Two investigations are currently ongoing. HMRC is committed to learning and making improvements so as to avoid causing undue stress and, wherever possible, identify taxpayers who need extra help and give them the support they need.
Taxpayers are also supported by HMRC’s Extra Support Teams. These are teams of trained advisors who, where appropriate, signpost taxpayers to Voluntary and Community organisations. To further improve the emotional support offered to taxpayers, HMRC and Samaritans are working together to deliver an 18-month project. As part of the pilot, Samaritans will further strengthen the capability and confidence of HMRC’s Extra Support Teams by providing additional guidance and coaching techniques to identify taxpayers who might be in vulnerable circumstances. Where needed, HMRC will signpost taxpayers to specialist emotional support through a dedicated Samaritans helpline.
Asked by: Jessica Morden (Labour - Newport East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many promoters and operators of schemes now 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
The Honorable Member is referred to the answer that was given on 14 November 2022 to the Question UIN 86483.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many promoters and operators of schemes now 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
The Honorable Member is referred to the answer provided on 14 November 2022 to the Question UNI 86483
Asked by: Jessica Morden (Labour - Newport East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will order an independent review of the loan charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Loan Charge was independently reviewed by Lord Morse in 2019, who considered the impacts of the policy on individuals. The Government recognised the impact of the Loan Charge and accepted 19 of the 20 recommendations made by Lord Morse. These changes, such as removing loans made before 9 December 2010 from the scope of the Loan Charge, reduced the impact of the policy and removed aspects which were of wider concern.
However, taxpayers can still face large tax bills which may have significant impact. That is why HMRC puts support for those affected at the core of its work to collect the Loan Charge and bring cases to settlement.
As well as the options available for managing tax bills, individuals affected by the Loan Charge are also supported by HMRC’s Extra Support teams. These are teams of trained advisors who, where appropriate, signpost taxpayers to Voluntary and Community organisations. HMRC and Samaritans are currently working together to deliver an 18-month project to further strengthen the support offered to taxpayers.
There are no plans for a further independent review.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an estimate of the number of individuals who may be declared bankrupt in connection with the Loan Charge, including the use of section 684 notices.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
No assessment has been made of the number of people who may be declared bankrupt as a result of debts arising from the use of a disguised remuneration avoidance scheme.
Where debts arise, HMRC are not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some individuals may choose to enter insolvency themselves based on their overall financial position.
HMRC only ever considers insolvency as a last resort, and they encourage taxpayers to get in contact to agree the best way to settle their tax debts. To date, HMRC has not initiated insolvency proceedings against any taxpayer for a Loan Charge debt.
Anyone who is worried about being able to pay what they owe should contact HMRC, who may be able to agree an instalment arrangement based on the individuals’ financial circumstances. There is no maximum length for these arrangements.
Asked by: Sarah Olney (Liberal Democrat - Richmond Park)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential number of people who could become bankrupt due to the Loan Charge and the use of section 684 discretion.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
No assessment has been made of the number of people who may be declared bankrupt as a result of debts arising from the use of a disguised remuneration avoidance scheme.
Where debts arise, HMRC are not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some individuals may choose to enter insolvency themselves based on their overall financial position.
HMRC only ever considers insolvency as a last resort, and they encourage taxpayers to get in contact to agree the best way to settle their tax debts. To date, HMRC has not initiated insolvency proceedings against any taxpayer for a Loan Charge debt.
Anyone who is worried about being able to pay what they owe should contact HMRC, who may be able to agree an instalment arrangement based on the individuals’ financial circumstances. There is no maximum length for these arrangements.
Asked by: Jessica Morden (Labour - Newport East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of the loan charge on the mental health of affected workers and contractors; and whether the Government plans to change its policy on the loan charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Loan Charge was independently reviewed by Lord Morse in 2019, who considered the impacts of the policy on individuals. The Government recognised the impact of the Loan Charge and accepted 19 of the 20 recommendations made by Lord Morse. These changes, such as removing loans made before 9 December 2010 from the scope of the Loan Charge, reduced the impact of the policy and removed aspects which were of wider concern.
However, taxpayers can still face large tax bills which may have a significant impact. That is why HMRC puts support for those affected at the core of its work to collect the Loan Charge and bring cases to settlement.
As well as the options available for managing tax bills, individuals affected by the Loan Charge are also supported by HMRC’s Extra Support teams. These are teams of specialist trained advisors who, where appropriate, signpost taxpayers to specialist Voluntary and Community organisations. To further strengthen the support offered to taxpayers, HMRC and Samaritans are currently working together to deliver an 18-month project.
Asked by: Dave Doogan (Scottish National Party - Angus)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the amount that will be raised by the Loan Charge.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Loan Charge was introduced to draw a line under the historic use of disguised remuneration (DR) schemes which paid income in the form of loans via third parties, often offshore trusts.
When announced at Budget 2016, the Loan Charge formed part of a package estimated to yield more than £3.2 billion over five years. 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.
There has already been an independent review of the Loan Charge. The Independent Loan Charge Review, led by Lord Morse, assessed the impact of the policy on affected taxpayers. The Government accepted all but one of the Review’s 20 recommendations and changes resulting from the review have reduced the Exchequer yield by an estimated £620 million.
Any loss of life is a tragedy, and HMRC takes issues relating to loss of life or serious injury extremely seriously. HMRC has made ten referrals to the Independent Office for Police Conduct (IOPC) in relation to individuals who have sadly taken their lives and have used DR schemes. In the eight concluded cases, the investigations found no evidence of misconduct by any HMRC officer. Individuals affected by the Loan Charge are supported by HMRC’s Extra Support teams. These are teams of specialist trained advisors who, where appropriate, signpost taxpayers to specialist Voluntary and Community organisations. To further strengthen the support offered to taxpayers, HMRC and Samaritans are currently working together to deliver an 18-month project.
Asked by: Dave Doogan (Scottish National Party - Angus)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will conduct a review of the potential effect of the Loan Charge on instances of the suicides in the UK.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Loan Charge was introduced to draw a line under the historic use of disguised remuneration (DR) schemes which paid income in the form of loans via third parties, often offshore trusts.
When announced at Budget 2016, the Loan Charge formed part of a package estimated to yield more than £3.2 billion over five years. 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.
There has already been an independent review of the Loan Charge. The Independent Loan Charge Review, led by Lord Morse, assessed the impact of the policy on affected taxpayers. The Government accepted all but one of the Review’s 20 recommendations and changes resulting from the review have reduced the Exchequer yield by an estimated £620 million.
Any loss of life is a tragedy, and HMRC takes issues relating to loss of life or serious injury extremely seriously. HMRC has made ten referrals to the Independent Office for Police Conduct (IOPC) in relation to individuals who have sadly taken their lives and have used DR schemes. In the eight concluded cases, the investigations found no evidence of misconduct by any HMRC officer. Individuals affected by the Loan Charge are supported by HMRC’s Extra Support teams. These are teams of specialist trained advisors who, where appropriate, signpost taxpayers to specialist Voluntary and Community organisations. To further strengthen the support offered to taxpayers, HMRC and Samaritans are currently working together to deliver an 18-month project.