Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason the Loan Charge review does not include the (a) role and (b) conduct of people who profited from recommending and operating disguised remuneration schemes in its scope.

Answered by James Murray - Exchequer Secretary (HM Treasury)

The government has commissioned an independent review of the Loan Charge to help bring the matter to a close for those affected whilst ensuring fairness for all taxpayers.

The Government is committed to tackling promoters of tax avoidance and will consult on measures to tackle promoters of marketed tax avoidance, including new powers focused on those who own or control promoter organisations and options to tackle legal professionals behind avoidance schemes.

The Government announced action at 2024 Autumn Budget to tackle tax avoidance by umbrella companies. Legislation, effective from April 2026, will be introduced to make recruitment agencies using umbrella companies legally responsible for accounting for PAYE on workers’ pay. Where there is no agency in the supply chain, this responsibility will fall to the end client. This along with the measures on promoters will help prevent disguised remuneration in the future.

In relation to the prosecution of Loan Charge scheme promoters and operators, I refer the hon. Member for Bury North to the answer I gave on 16 October 2024 to Question UIN 7747.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to issue a Command Paper in relation to the Disguised remuneration: independent loan charge review.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

The loan charge was independently reviewed by Lord Amyas Morse in 2019, who assessed the impact of the policy on affected taxpayers. The Government accepted all but one of the Review’s 20 recommendations.

To bring the Review’s publication to the attention of Parliament, a Written Statement was made on the day (20 December 2019: UIN HCWS14). The Statement is available here: https://questions-statements.parliament.uk/written-statements/detail/2019-12-20/hcws14.

There are no plans to issue a command paper.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people have been refunded by HMRC due to changes made by the Morse Review; and what the total amount of money refunded is.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Remuneration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

By the end of March 2023, HMRC had processed over 2450 applications, of which over 1400 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible. The total value of repayments, waivers or both that have been made by that date was over £180 million.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people who have requested a refund under the changes resulting from the Morse Review have been refunded by Her Majesty's Revenue and Customs.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Remuneration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

By the end of November 2022, HMRC had processed approximately 2400 applications, of which approximately 1375 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds due to the changes made by the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance which was costed as a whole. At Spring Statement 2022, this package was estimated to bring in an estimated overall Exchequer yield of £3.4 billion. The changes resulting from the 2019 independent review of the Loan Charge are estimated to reduce the Exchequer yield by £620 million.

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the DR Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 28 October 2022, HMRC had processed over 2350 applications, of which over 1350 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds as a result of changes made in response to the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

I refer the Hon. Member to the answer given to UIN 80825.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many and what proportion of people seeking refunds due to the changes recommended by the Morse Review have been refunded by HMRC.

Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs

Following Lord Morse’s Independent Loan Charge Review in 2019, HMRC established the Disguised Renumeration (DR) Repayment Scheme 2020 to repay voluntary payments that taxpayers had agreed to make as part of settlements concluded before changes were made to the scope of the Loan Charge. Individuals and employers had until 30 September 2021 to apply to HMRC for a refund or waiver.

HMRC repays amounts that were paid in DR scheme settlements, and/or waives amounts of instalments due that have not yet been paid if certain conditions are met.

As of 28 October 2022, HMRC had processed over 2350 applications, of which over 1350 had received either a repayment, a waiver, or both. Over 1000 of the applications processed at that date were either invalid or ineligible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many people seeking refunds due to the changes made by the Morse Review have been refunded by HMRC to date.

Answered by Richard Fuller - Shadow Chief Secretary to the Treasury

I refer my hon. Member to the answer that was given to the Question UIN 59171.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Independent Loan Charge Review: report on the policy and its implementation, published in December 2019, if he will make an assessment of the adequacy of access to information given to Lord Morse to enable him to report on HMRC’s approach to implementing the Loan Charge.

Answered by Richard Fuller - Shadow Chief Secretary to the Treasury

The Independent Loan Charge Review, led by Lord Morse, drew upon all the available evidence and expert advice to consider the appropriateness of the Loan Charge as a policy response, and its impact on individuals, reflecting the main concerns that had been raised by MPs and campaigners. Lord Morse had full discretion over how the review was run, which stakeholders he engaged with, and the recommendations he made.

The Government recognised the concerns raised by the Review and accepted all but one of the Review’s 20 recommendations. The Government implemented a number of changes to the Loan Charge which were enacted in Finance Act 2020. On 3 December 2020, HMRC published a full report to Parliament on the implementation of the review recommendations. This report set out how HMRC has delivered the 19 recommendations which were accepted by the Government.