Asked by: Ross Thomson (Conservative - Aberdeen South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he has taken to ensure that those affected by the 2019 loan charge are not forced into bankruptcy by the repayments.
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. On average loan scheme users have twice as much income as the average UK taxpayer, when taking into account the loan they received.
HMRC is working hard to help individuals get out of tax avoidance for good and are encouraging anyone who is concerned about their ability to pay to contact them as soon as possible to discuss their options. HMRC has set up a dedicated helpline for those wanting to settle their avoidance scheme use, and discuss payment options.
HMRC does not want to make anybody bankrupt and very few cases ever reach that stage. They will work with all individuals to reach a manageable and sustainable payment plan wherever possible.
HMRC has simplified the process for those who choose to settle their use of avoidance schemes before the loan charge arises, so that those earning less than £50,000 a year and are no longer engaging in tax avoidance can agree a payment plan of up to five years without the need for detailed supporting information. There is no maximum period within which an overall settlement can be agreed, and all individual cases will be dealt with appropriately and sympathetically.
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. More than 90% of this amount was collected from employers, with less than 10% from individuals.
Asked by: Ross Thomson (Conservative - Aberdeen South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to respond to the House of Lords Economic Affairs Sub-Committee report entitled The powers of HMRC: treating taxpayers fairly, HL 242.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The Government will respond to the sub-Committee’s report in due course and in the usual way.
Asked by: Ross Thomson (Conservative - Aberdeen South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of people in the Aberdeen South constituency affected by the 2019 Loan Charge.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The 2019 loan charge is targeted at disguised remuneration (DR) schemes. These are artificial tax avoidance schemes where earnings are paid in the form of non-repayable loans made by a third party.
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. When taking into account the loan they received, loan scheme users have on average twice as much income as the average UK taxpayer.
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. More than 90% of this amount was collected from employers, with less than 10% from individuals.
HMRC have also simplified the process for those who choose to settle their use of avoidance schemes before the charge arises, so that those earning less than £50,000 a year and no longer engaging in tax avoidance can agree a payment plan of up to five years without the need for detailed supporting information. There is no maximum period within which an overall settlement can be agreed, and HMRC will deal with individual cases appropriately and sympathetically.
50,000 individuals are estimated to be affected by the introduction of the DR loan charge across the UK. Information is not held at constituency level.