Asked by: Neil O'Brien (Conservative - Harborough)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much revenue the Government has raised through tackling tax avoidance, evasion and non-compliance since 2010.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Every year, HMRC measures the impact of its activity to tackle tax avoidance, evasion and non-compliance through its performance measure of compliance yield. Compliance yield is HMRC’s term for money that would have been lost to the Exchequer if not for our compliance work. This is published each year in HMRC’s Annual Report and Accounts.
https://www.gov.uk/government/collections/hmrcs-annual-report-and-accounts
Compliance yield since 2010 is as follows:
Year | Compliance yield |
2023-24 (to Q3) | £24,026m |
2022-23 | £34,031m |
2021-22 | £30,792m |
2020-21 | £30,450m |
2019-20 | £36,948m |
2018-19 | £34,070m |
2017-18 | £30,292m |
2016-17 | £28,855m |
2015-16 | £26,607m |
2014-15 | £26,558m |
2013-14 | £23,926m |
2012-13 | £20,722m |
2011-12 | £18,627m |
2010-11 | £13,900m |
More about the different components that are included in the reported amount can be found in the HMRC Compliance Yield: technical note, that is published each year alongside the Annual Reports and Accounts.
Asked by: Ranil Jayawardena (Conservative - North East Hampshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to recover tax avoided through disguised remuneration tax avoidance schemes from people who (a) recommended, (b) promoted and (c) operated those schemes.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
HMRC has taken action to tackle the promoters of avoidance schemes, implementing a wide range of actions to disrupt their activities and supply chains, including publishing the details of promoters.
However, liability for the tax is always that of the individual and there is no legal mechanism to transfer disguised remuneration liabilities from the scheme users to the promoters.
As of 31 December, HMRC has published the details of 59 promoters, 23 directors and details of 64 tax avoidance schemes.
HMRC has also issued over 20 stop notices to promoters and published details of 16 of these arrangements. Publishing this information supports taxpayers in identifying tax avoidance schemes so they can steer clear of or exit them.
The current Finance Bill is introducing tougher consequences for promoters of tax avoidance. This includes a new criminal offence to strengthen the deterrent to promoting tax avoidance, making it clear promoters must stop promoting these schemes, and a power enabling HMRC to act more quickly to disqualify directors of companies involved in tax avoidance.
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.
Asked by: Ranil Jayawardena (Conservative - North East Hampshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many (a) promoters and (b) operators of schemes subject to the loan charge have been prosecuted.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Promotion or operation of mass marketed tax avoidance schemes is not in, or 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, while there have been no prosecutions of individuals for the promotion and/or operation of schemes subject to the Loan Charge, one individual involved in selling Disguised Remuneration schemes subject to the Loan Charge has been convicted for a related offence. Also, 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. These have resulted in over 100 years of custodial sentences and 9 years of suspended sentences being ordered, the majority of which relate to promoters.
Prosecutions are only one type of intervention available to HMRC where they identify concerns.
Asked by: Lord Bradshaw (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Baroness Vere of Norbiton on 20 December 2023 (HL1133), whether the prosecutions referred to are for income tax or VAT offences, and what assessment they have made of the sufficiency of the resources targeting these offences.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The prosecutions and convictions referenced in the answer I gave on 20 December 2023 to PQ HL1133 relate to all HMRC compliance related offences irrespective of tax head.
HMRC’s aim is for everyone to pay the tax that is legally due, no matter who they are. It has achieved a long-term reduction in the UK’s tax gap from 7.5% in 2005-06 to 4.8% in 2021-22.
HMRC tailors compliance activity, including allocation of resources, depending on the level of risk in each tax head, but also on customer behaviours and capability. This allows the Department to identify compliance risks and customer needs, and adapt its approach where necessary – to offer more support to help people get their tax right, or to take targeted action against avoidance, evasion and criminal attacks.
The most effective way it can ensure the right tax is paid is through the overall design of the tax system – improving processes to remove opportunities for error and fraud, and taking preventative action to educate and help customers get their taxes right first time.
Criminal investigation, with a view to prosecution, is an important part of HMRC’s overall compliance strategy. HMRC will conduct criminal investigations and seek criminal prosecutions where the behaviour displayed is such that only a criminal sanction is appropriate, or where a criminal prosecution will act as a strong deterrent.
The rules are the same for everyone, but tailoring the approach helps HMRC to respond in the most targeted, proportionate and effective way.
The resource available for HMRC and its compliance work is agreed with ministers at Spending Reviews and Fiscal Events. The agreed level is shaped by economic factors and enables HMRC to carry out the compliance activity required to maintain a stable tax gap over the medium term.
Asked by: Chris Stephens (Scottish National Party - Glasgow South West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an estimate of the number of people that are required to make payments under the Loan Charge as of 19 December 2023.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
HM Revenue and Customs (HMRC) estimates that there are around 40,000 individuals and around 5,000 employers who have either failed to return the Loan Charge or have returned a figure that is not correct.
HMRC continues to support taxpayers to resolve their use of disguised remuneration schemes and get out of avoidance for good, including helping those who need extra support and providing additional time to pay where needed.
Asked by: Julian Sturdy (Conservative - York Outer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to tackle tax evasion.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Tax evasion is always illegal and HMRC’s aim is for everyone to pay the tax that is legally due, no matter who they are. HMRC’s role is to make it easy to get tax right for the compliant majority and make it hard for the dishonest minority to cheat the system.
HMRC has achieved a long-term reduction in the UK’s tax gap from 7.5% in 2005-06 to 4.8% (£35.8 billion) in 2021-22 (the latest estimate). The tax gap is composed of a range of customer behaviours: non-payment, use of avoidance schemes, legal interpretation, error, failure to take reasonable care, evasion, the hidden economy and criminal attacks on the tax system.
Evasion is when people or businesses deliberately do not declare or account for what they owe. It made up 0.6% or £4.7 billion of the £35.8 billion.
HMRC works to prevent fraud, tackle avoidance and evasion by designing policies and processes which minimise risk, by promoting good compliance with the tax system through education initiatives and responding with a range of interventions, capabilities and sanctions given to them by Parliament, including the exercising of strong civil and criminal investigation powers.
Since 2010, the Government has introduced over 200 measures to tackle tax avoidance and evasion, including 21 measures introduced since 2021 that are forecast to raise over £7 billion. Of these measures, 4 measures were announced at the Autumn Statement 2022 and are forecast to raise £5 billion in tax revenues over the next five years.
HMRC will continue to work hard, putting in place measures which mean we can go even further in reducing the tax gap, and making sure taxpayers and businesses meet their obligations and pay the tax they owe.
Published information: ‘Measuring tax gaps tables 2023’ (Table 7.1) at gov.uk.
Asked by: Munira Wilson (Liberal Democrat - Twickenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to update to the List of named tax avoidance schemes, promoters, enables and suppliers of 1 December 2023, what recent assessment he has made of the potential impact of changes to the loan charge that came into effect on 5 April 2019 on the financial wellbeing of freelancers.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Loan Charge was independently reviewed by Lord Morse, who considered the impacts of the policy on individuals. The Government accepted 19 of his 20 recommendations. 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.HMRC puts support for those affected at the core of its work to collect the Loan Charge and bring cases to settlement.
HMRC can agree an affordable and sustainable instalment plan based on taxpayers’ specific circumstances and for as long as they need. HMRC can also refer taxpayers for free debt advice that is independent from HMRC.
Asked by: Julian Knight (Independent - Solihull)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 18 September 2023 to Question 196647 on Taxation: Disclosure of Information, how much His Majesty's Revenue and Customs spent on ex gratia payments to whistle-blowers in the 2022-2023 financial year.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
There are times when it is appropriate for HMRC to make payments to individuals in return for providing information that helps tackle tax avoidance and evasion.Such payments are discretionary and are based on the quality of the information provided, the extent and value to which the information contributed to HMRC assigned matters, and what is achieved as a result.