Tax Avoidance

Treasury written question – answered on 8th October 2019.

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Photo of Sandy Martin Sandy Martin Shadow Minister (Waste and Recycling)

To ask the Chancellor of the Exchequer, what estimate he has made of the number of taxpayers working for a single employer under a Loan Charge scheme who would not have had the choice of being employed directly by that employer.

Photo of Jesse Norman Jesse Norman Financial Secretary to the Treasury and Paymaster General

Disguised remuneration (DR) schemes are contrived arrangements that use loan payments in place of ordinary remuneration, usually through an offshore trust, with the purpose of avoiding income tax and National Insurance contributions. The loans are provided on terms that mean they are not repaid in practice. HM Revenue and Customs’ (HMRC) position is that they are no different to income, and that they are and have always been taxable.

The Government has heard claims that some individuals were compelled to use DR schemes, but HMRC have not seen cases that support this claim.

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