Public Sector: Tax Avoidance

(asked on 10th May 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many public sector organisations paid workers through disguised remuneration loans.


Answered by
Mel Stride Portrait
Mel Stride
Secretary of State for Work and Pensions
This question was answered on 15th May 2019

Disguised remuneration (DR) loan schemes are contrived arrangements that pay loans in place of ordinary remuneration with the sole purpose of avoiding income tax and National Insurance contributions. The loans are provided on terms that mean they are not repaid in practice, so they are no different to normal income and are, and always have been, taxable.

Individuals, working for public bodies, identified in the course of HMRC’s compliance work as using a tax avoidance scheme would be investigated in the same way as any other scheme user.

The Government estimates that around 50,000 individuals could be affected by the charge on DR loans. The charge applies to all users of DR tax avoidance schemes, it does not single out a specific group or industry. It is possible for individuals to use DR tax avoidance schemes without the participation or knowledge of the entity that engages them.

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