Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to publish the outcome of his Loan Charge review.
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 now agreed settlements on disguised remuneration schemes with employers and individuals totalling over £1 billion. Pay As You Earn (PAYE) liabilities fall on the employer in the first instance. The charge on DR loans does not change this principle and the employee will only be liable where the amount cannot reasonably be collected from the employer, such as where the employer is offshore or no longer exists. Around 85% of the settlement yield since 2016 is from employers, with less than 15% from individuals.
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.
The Government chose to accept New Clause 26, now Clause 95, during the passage of the Finance Bill introduced by a cross party group. As set out by the Clause, the Government will lay a report no later than 30 March 2019. The report will review the effect of changes made to the time limits for recovery or assessment where tax loss arises in relation to offshore tax, and compare these with other legislation including the charge on disguised remuneration loans.
The charge on disguised remuneration loans will apply to disguised remuneration loan balances on 5 April 2019.
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on people affected by the 2019 Loan Charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
Disguised Remuneration (DR) loan schemes are contrived arrangements that pay loans in place of ordinary remuneration to avoid income tax and National Insurance contributions. The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. The loan charge applies to all users of DR tax avoidance schemes. It does not single out a specific group or industry, such as contractors or doctors. HMRC data indicates that fewer than 3% of those affected work in medical services (doctors and nurses) or teaching. If scheme users repay the loan or agree a settlement for the tax that they owe with HMRC, they will not face the charge.
The latest tax information and impact note (TIIN) can be found at: https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update.
Further information can be found in the Government’s issue briefing at: https://www.gov.uk/government/publications/hmrc-issue-briefing-disguised-remuneration-charge-on-loans/hmrc-issue-briefing-disguised-remuneration-charge-on-loans
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an estimate of the number of locum (a) doctors and (b) nurses are affected by the 2019 Loan Charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
Disguised Remuneration (DR) loan schemes are contrived arrangements that pay loans in place of ordinary remuneration to avoid income tax and National Insurance contributions. The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. The loan charge applies to all users of DR tax avoidance schemes. It does not single out a specific group or industry, such as contractors or doctors. HMRC data indicates that fewer than 3% of those affected work in medical services (doctors and nurses) or teaching. If scheme users repay the loan or agree a settlement for the tax that they owe with HMRC, they will not face the charge.
The latest tax information and impact note (TIIN) can be found at: https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update.
Further information can be found in the Government’s issue briefing at: https://www.gov.uk/government/publications/hmrc-issue-briefing-disguised-remuneration-charge-on-loans/hmrc-issue-briefing-disguised-remuneration-charge-on-loans
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the number of people who will be directly affected by changes to IR35.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
In 2016, when the Government consulted on possible reform of the off-payroll working rules (known as IR35) in the public sector, it estimated that around 26,000 people working through personal service companies would be affected by the changes. Reform to the rules in the public sector were introduced in April 2017.
The Government is currently consulting on how to tackle non-compliance with the current rules in the private sector. No decisions have been made on any changes to those rules.
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, how many people have (a) agreed to repay their loans and (b) agreed a settlement offer with HMRC as a result of the disguised remuneration 2019 Loan Charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. Further information can be found in the ‘Disguised remuneration: further update’ policy paper: https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update.
Information on how many DR scheme users have repaid their loans is not held. Individuals who have repaid their DR loans must provide this information to HM Revenue and Customs (HMRC) by 30 September 2019.
HMRC has agreed settlements with over 5,000 individuals and employers since the announcement of the 2019 loan charge at Budget 2016. This has raised over half a billion pounds for the Exchequer. Information is not held on how many people have settled as a direct result of the loan charge as it is one of a number reasons for settling with HMRC.
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what initial estimate he made of the number of people who will be required to pay tax liabilities to HMRC as a result of the disguised remuneration 2019 Loan Charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. Further information can be found in the ‘Disguised remuneration: further update’ policy paper: https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update.
Information on how many DR scheme users have repaid their loans is not held. Individuals who have repaid their DR loans must provide this information to HM Revenue and Customs (HMRC) by 30 September 2019.
HMRC has agreed settlements with over 5,000 individuals and employers since the announcement of the 2019 loan charge at Budget 2016. This has raised over half a billion pounds for the Exchequer. Information is not held on how many people have settled as a direct result of the loan charge as it is one of a number reasons for settling with HMRC.
Asked by: Grant Shapps (Conservative - Welwyn Hatfield)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, with reference to Strategic Review of General Aviation, published by the Civil Aviation Authority in July 2006, whether his Department has conducted a review of whether the current VAT treatment applied to flight training places UK flying schools at a competitive disadvantage to those based in other countries; and if he will make a statement.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The government does not hold information on tax revenues that can be broken down to assess the impact of tax on flight training.