Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many prosecutions have been made against people promoting disguised remuneration schemes in each year since 1999.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
This Government is committed to tackling avoidance in all its guises. A core part of our strategy has been to tackle the people behind these tax avoidance schemes. We have introduced legislation every year since 2014 providing HMRC with suite of powers to tackle promoters and enablers of tax avoidance schemes, designed to change behaviour and influence those involved to move out of promoting and enabling for good, with various sanctions and penalties for those who don’t.
HMRC are using these powers to challenge all major promoters of avoidance schemes, including disguised remuneration (DR) avoidance schemes. This has resulted in several major promoters stopping selling avoidance schemes and HMRC have also, through court action where needed, required around 30 other high-profile promoters to disclose details of previously undisclosed schemes, enabling HMRC to take counter-action on these schemes much earlier.
HMRC is considering whether some schemes involving attempts to avoid tax through the use DR may be fraudulent in nature.
HMRC will consider criminal investigation where appropriate, for example, where there is evidence of fraudulent behaviour. Promoters of tax avoidance schemes have been prosecuted, leading to convictions and jail terms for example:
In 2016 four men were found guilty of promoting and operating a fraudulent tax avoidance scheme, to defraud taxpayers out of £100 million.
In 2017 a chartered accountant was sentenced to eight years in prison for setting up and promoting a number of fraudulent schemes to wealthy professionals.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the maximum amount of time is that HMRC provides to people who cannot afford to pay the 2019 loan charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
HMRC has published a specific arrangement for disguised remuneration (DR) scheme users who currently earn less than £50,000, are no longer in tax avoidance, and settle before the loan charge arises. In these specific circumstances HMRC will agree an extended payment arrangement of up to five years without the need for detailed supporting information about their income and assets.
DR scheme users who earn £50,000 or more, or who require longer, may still be able to pay in instalments over periods in excess of 5 years if agreed with HMRC. There is no maximum amount of time that a person can have, to settle their avoidance scheme debt – any agreed payment plan should be affordable and specific to an individual’s personal circumstances. These payment arrangements will be tailored to an individual’s financial circumstances so HMRC will require more detailed supporting information.
Anybody who is worried about being able to pay what they owe should get in touch with HMRC.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on revenue to the public purse of corporations hiring workers as self-employed to circumvent their employer’s national insurance contributions and workers’ rights liabilities as a result of changes to IR35 regulations.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The Government is committed to robustly tackling false self-employment. HM Revenue and Customs (HMRC) will investigate any evidence suggesting companies may have misclassified individuals for tax purposes. In these cases, HMRC will identify the facts and take steps to ensure the right tax and National Insurance contributions are paid.
Where the off-payroll working rules (IR35) apply, employer’s National Insurance contributions are payable. In April 2017, the Government introduced reform to IR35 for the public sector meaning responsibility shifted for determining whether the rules apply, from the individual’s own company to the public sector body engaging them. Early tax receipts are broadly in line with what was expected from the reform and the forecast of what the measure would raise.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, how many HMRC investigations of taxpayers initiated in 2013 were ongoing for more than (a) one year (b) two years and (c) four years prior to prosecution; and if he will make a statement.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The HMRC data below relates to the number of people who were subject to a criminal investigation started in 2013/14, broken down by duration in years. The end point to determine duration is the outcome of the prosecution (conviction or acquittal). The number of investigation cases involved will be less as many cases involve more than one individual.
Criminal Investigations started in 2013-2014:
147 individuals were subject to a criminal investigation which lasted one year or less.
189 individuals were subject to a criminal investigation which lasted one to two years.
228 individuals were subject to a criminal investigation which lasted two to four years.
17 individuals were subject to a criminal investigation which lasted over 4 years.
309 individuals are subject to a criminal investigation which is still ongoing.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what the average time is that the fraud investigation department of HMRC takes to (a) carry out investigations and (b) receive confirmation from the Crown Prosecution Service of a decision to prosecute; and if he will make a statement.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The duration of a case is calculated as the time from the start of the case to the close, which includes the trial outcome and where relevant the issuing of a confiscation order. Criminal cases can vary significantly in their size and complexity with some cases concluding within a few months, whilst others can take years. Last year, one of our longest running cases concluded after over ten years.
For cases that closed in 2018, the mean duration of a criminal case is 15 months and the median is 10 months.