Tax Avoidance

Treasury written question – answered at on 17 December 2018.

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Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

To ask the Chancellor of the Exchequer, how much revenue has accrued to the public purse from anti-avoidance measures to tackle disguised remuneration since 2011.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

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.

The Government introduced legislation in 2011 to target arrangements intended to disguise remuneration, which were forecast to raise £3.8bn. At Budget 2016, the Government announced a package of changes, including the charge on disguised remuneration (DR) loans, which are estimated to raise £3.2 billion for the Exchequer by 2021. Further information can be found in the ‘Disguised remuneration: further update’ policy paper, published on 22 November 2017: www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update.

Since the announcement of the charge on DR loans, 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. If scheme users repay the loan or agree a settlement for the tax that they owe with HMRC, they will not face the charge.

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