Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the finding by HMRC that small businesses are now responsible for 56 per cent of the UK’s 'tax gap'.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
There has been a long-term downward trend in the tax gap as a proportion of total theoretical liabilities, reaching a record low of 4.8 per cent in 2021-2022. This is the result of the Government’s action to proactively tackle the tax gap.
Small businesses play a vital role in the UK economy and the majority want to meet their obligations and pay their fair share of tax.
As one would expect from such a large and diverse population, the small business tax gap derives from a wide range of different forms of non-compliant behaviours, from simple errors at one end of the spectrum to more deliberate behaviours at the other – this range requires a variety of responses to address.
HMRC supports the compliant majority who try to get their tax affairs right and performs compliance checks on those who don’t comply with the rules. For those who deliberately evade their obligations, we have at our disposal a significant set of sanctions that can be imposed, from penalties based on the amount of tax not paid, through to criminal prosecutions for the most serious cases.
HMRC remains committed to administering the tax system in a simple, customer focussed and efficient way, making it easy to get tax right and hard to bend or break the rules.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people are employed by the Government to investigate tax evasion of people with assets worth over £10 million.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government is committed to tackling tax avoidance, evasion, and all other forms of tax non-compliance. HMRC has considerable resources to tackle non-compliance in the tax system, including tax evasion.
Within HMRC’s Customer Compliance Group (CCG), HMRC have dedicated Wealthy Teams with responsibility for tax compliance in this customer segment. As part of their role, they are key to delivering HMRC’s compliance response to evasion.
Alongside the work of the Wealthy teams, the most serious non-compliance in the Wealthy customer segment is dealt with by specialist Offshore Corporate and Wealthy (OCW) colleagues in HMRC’s Fraud Investigation Service.
For data on the full time equivalent (FTE) employees working in HMRC's Wealthy Teams, I refer the hon member to my answer of 30 January 2023 to PQ UIN 131454 : Written questions and answers - Written questions, answers and statements - UK Parliament
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: Chris Stephens (Scottish National Party - Glasgow South West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many full-time equivalent staff are employed to investigate tax evasion in HMRC's Wealthy Team unit; and if he will make a statement.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government is committed to tackling tax avoidance, evasion, and all other forms of tax non-compliance. HMRC has considerable resources to tackle non-compliance in the tax system, including tax evasion.
Within HMRC’s Customer Compliance Group (CCG), HMRC have a dedicated Wealthy unit with responsibility for tax compliance in this customer segment. As part of their role, they are key to delivering HMRC’s compliance response to evasion.
For data on the full time equivalent (FTE) employees working in HMRC's Wealthy Teams, I refer the hon member to my answer of 30 January 2023 to UIN 131454.
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: Janet Daby (Labour - Lewisham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of establishing an independent inquiry into the selling of disguised remuneration schemes.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
As a result of the action the Government has taken to clamp down on marketed tax avoidance, 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 2020-21.
HM Revenue and Customs (HMRC) continues to implement the actions set out in its 2020 published strategy to disrupt the activities and supply chains of promoters of tax avoidance schemes.
The Government brought in legislation in Finance Act 2021 (FA21) and in Finance Act 2022 (FA22) to enhance HMRC’s ability to tackle promoters and suppliers of tax avoidance schemes and reduce the scope for them to market such schemes.
As announced at Spring Budget 2023, the Government is consulting on two further measures to tackle promoters of tax avoidance, which build on the changes made in FA21 and FA22. These proposals reinforce the Government’s commitment to ensure promoters face tough consequences for their actions.
Asked by: James Murray (Labour (Co-op) - Ealing North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 22 March 2023 to Question 165453 on Taxation: Fines, how many and what proportion of the individual penalties issued by HMRC which are recorded on the National Penalty Processing System for disclosure of tax avoidance schemes amounted to a monetary value of £1,000 to £9,999 in each of the last five years.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Honourable Member to the answer given to Parliamentary Question UIN 182708 on 3 May 2023 and UIN 182715 on 2 May 2023.
Asked by: James Murray (Labour (Co-op) - Ealing North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 22 March 2023 to Question 165453 on Taxation: Fines, how many and what proportion of the individual penalties issued by HMRC which are recorded on the National Penalty Processing System for disclosure of tax avoidance schemes amounted to a monetary value of £10,000 to £99,999 in each of the last five years.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Honourable Member to the answer given to Parliamentary Question UIN 182708 on 3 May 2023 and UIN 182715 on 2 May 2023.
Asked by: James Murray (Labour (Co-op) - Ealing North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 22 March 2023 to Question 165453 on Taxation: Fines, how many and what proportion of the individual penalties issued by HMRC which are recorded on the National Penalty Processing System for the disclosure of tax avoidance schemes amounted to a monetary value of £100,000 to £999,999 in each of the last five years.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
I refer the Honourable Member to the answer given to Parliamentary Question UIN 182708 on 3 May 2023 and UIN 182715 on 2 May 2023.