Disguised Remuneration Loan Charge Review

Treasury written question – answered on 29th June 2020.

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Photo of Caroline Nokes Caroline Nokes Chair, Women and Equalities Committee, Chair, Women and Equalities Committee

To ask the Chancellor of the Exchequer, what plans he has to bring forward legislative proposals to implement the recommendations contained in Sir Amyas Morse's Loan Charge review published in December 2019.

Photo of Caroline Nokes Caroline Nokes Chair, Women and Equalities Committee, Chair, Women and Equalities Committee

To ask the Chancellor of the Exchequer, whether (a) income tax and (b) national insurance contributions have been deducted from income from loan schemes through third parties that were entered into before 9 December 2019.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

Disguised Renumeration (DR) schemes seek to avoid tax by paying users their earnings in the form of loans, usually via an offshore trust, so that neither Income Tax nor National Insurance Contributions are paid on the income channelled through the scheme.

The Loan Charge was designed to tackle DR tax avoidance schemes. The Independent Loan Charge Review led by Sir Amyas Morse assessed the impact of the policy on affected taxpayers and concluded that it was right for the Loan Charge to remain in force, and for the Government to seek to collect the tax due. However, the Review did also raise a number of concerns.

The Government accepted all but one of the recommendations made by the Review. The Government is currently legislating to implement these changes to the Loan Charge in the Finance Bill.

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