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.

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.