Tax Avoidance

Treasury written question – answered on 11th January 2019.

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Photo of Faisal Rashid Faisal Rashid Labour, Warrington South

To ask the Chancellor of the Exchequer, what steps his Department is taking to implement an affordable repayment plan for people affected by the disguised remuneration loan charge.

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.

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 to contact them as soon as possible to discuss their options. 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.

HMRC has also introduced a simplified process for those who choose to settle their use of DR avoidance schemes before the loan charge arises. Those earning less than £50,000 a year and who are no longer engaging in tax avoidance can agree a payment plan of up to five years without the need for detailed supporting information.

There is no maximum period within which an overall settlement can be agreed, and HMRC will deal with individual cases appropriately and sympathetically.

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