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Tax Avoidance

Question for Treasury

UIN 264464, tabled on 13 June 2019

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that (a) adequate support is available from HMRC for people affected by the 2019 Loan Charge and (b) that further interest will not be accrued on outstanding loans due to the delays experienced with the HMRC help desk.

Answered on

21 June 2019

HM Revenue and Customs (HMRC) have put in place a series of measures to support those affected by the charge on Disguised Remuneration (DR) loans, which came into force on 5 April 2019.

Since 2017, HMRC have had a dedicated helpline for those who have used DR schemes. People can use this helpline to discuss their scheme use and different options to reach a settlement with HMRC. Call handlers are trained to support all callers, including those needing additional support. The helplineā€™s current average speed of answer is less than 60 seconds.

HMRC also recently announced an extension of their successful Needs Enhanced Support (NES) service to those undergoing compliance checks. This is being rolled out to DR scheme users first.

HMRC have already confirmed that scheme users who came forward to settle under the November 2017 published settlement terms and provided the necessary information by the deadline of 5 April 2019 will not be disadvantaged if settlement cannot be reached until after that date. Simplified payment arrangements were available as part of those terms.

Individuals who have not settled their DR scheme use with HMRC will need to report the outstanding loan amount on their 2018-19 tax return and pay the tax due, or agree an instalment arrangement, by 31 January 2020.

Anybody concerned about paying what they owe is advised to get in touch with HMRC as soon as possible. HMRC have a number of ways to help those who are genuinely unable to make a full payment of tax on time. There is no set minimum or maximum period within which a tax debt can be repaid.

In relation to interest, interest on late payments is designed to encourage people to pay their tax liabilities on time. It also serves to recompense the Exchequer for the delay in tax revenue paid later than the due date.

For the majority of DR scheme users, there is currently no interest accruing on the loan charge, as the liability has yet to arise.

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