Asked by: Ellie Reeves (Labour - Lewisham West and East Dulwich)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent steps he has taken to tackle providers of loan scheme arrangements which have (a) promoted and (b) enabled tax avoidance schemes.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
This Government is committed to tackling avoidance in all its guises. HMRC has a suite of powers to tackle and challenge those who promote or otherwise enable tax avoidance and HMRC is using its powers to challenge all major promoters of avoidance schemes, including disguised remuneration (DR) avoidance schemes. In recent years, HMRC has been investigating over 100 promoters and others involved in avoidance, including disguised remuneration arrangements. In the last year, HMRC has taken litigation action against 5 scheme promoters for failure to disclose under Disclosure of Tax Avoidance Schemes (DOTAS) with others deciding to disclose to avoid litigation. Further cases will be litigated in the year ahead.
HMRC has used its powers under the Promoters of Tax Avoidance Schemes (POTAS) legislation to challenge promoters and made three successful complaints to the Advertising Standards Authority about misleading advertising; two of which relate to disguised remuneration schemes. In addition, the ‘Enablers’ penalty regime, introduced in Finance (No. 2) Act 2017, means anyone who knowingly enables another person to use an abusive tax arrangement that is later defeated by HMRC will face a penalty of 100% of the fees they have earned from that activity. HMRC consider criminal investigation and referrals to prosecuting authorities where appropriate.
Since the announcement of the 2019 loan charge at Budget 2016, HMRC has agreed settlements on disguised remuneration schemes with employers and individuals of over 650 million pounds. Overall, 75% of this amount is expected to come from employers, and only 25% from individuals. If scheme users repay the loan or agree a settlement for the tax that they owe with HMRC, they will not face the charge.
HMRC has also introduced a simplified process for those who choose to settle their use of DR avoidance schemes before the loan charge arises. DR scheme users who currently have an income of less than £50,000 and are no longer engaging in tax avoidance can automatically agree a payment plan of up to five years without the need to give HMRC any information about their income and assets. This arrangement has been extended to 7 years for scheme users who have an income of less than £30,000.
Asked by: Ellie Reeves (Labour - Lewisham West and East Dulwich)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he has taken to (a) review all loan charge cases and (b) ensure that individual cases are pursued proportionately to their circumstances.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
Disguised Remuneration (DR) schemes are contrived arrangements that pay loans in place of ordinary remuneration with the sole purpose of avoiding income tax and National Insurance contributions.
HMRC is working hard to help individuals get out of tax avoidance for good and is encouraging anyone who is concerned about their ability to pay what they owe, to contact them as soon as possible to discuss their position. In November 2017, HMRC set up a dedicated helpline for those wanting to settle their avoidance scheme use, and discuss payment options. HMRC will work with all individuals to reach a manageable and sustainable payment plan wherever possible.
Since the announcement of the 2019 loan charge at Budget 2016, HMRC has agreed settlements on disguised remuneration schemes with employers and individuals of over 650 million pounds. Overall, 75% of this amount is expected to come from employers, and only 25% from individuals. If scheme users repay the loan or agree a settlement for the tax that they owe with HMRC, they will not face the charge.
HMRC has also introduced a simplified process for those who choose to settle their use of DR avoidance schemes before the loan charge arises. DR scheme users who currently have an income of less than £50,000 and are no longer engaging in tax avoidance can automatically agree a payment plan of up to five years without the need to give HMRC any information about their income and assets. This arrangement has been extended to 7 years for scheme users who have an income of less than £30,000.
Those who consider they need more than five (or seven) years to pay what they owe or who earn £50,000 or more should still come forward and talk to HMRC about payment terms. There are no defined minimum or maximum time periods for payment arrangements and HMRC can tailor any payment plan to their individual financial circumstances.
Asked by: Ellie Reeves (Labour - Lewisham West and East Dulwich)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, pursuant to the Answer of 1 May 2018 to Question 138522, how many applications for 30 hours of free childcare have been processed in the last three months for which data is available.
Answered by Elizabeth Truss
In the three months to 1 May 2018 over 62,000 new applications for 30 hours free childcare were processed. This includes applications where the parent was found not to be eligible for 30 hours free childcare.
Asked by: Ellie Reeves (Labour - Lewisham West and East Dulwich)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what proportion of applications for 30 hours of free childcare have been processed within seven days in the last three months for which data is available.
Answered by Elizabeth Truss
Between 1 January and 31 March 2018 over 99% of applications through childcare service (through which parents apply for 30 hours free childcare and Tax-Free Childcare) were processed within 5 working days.