Dr Julian Lewis: To ask the Chancellor of the Exchequer, how many people have been actively pursued for payment of the Loan Charge (a) in each lockdown period and (b) overall since the beginning of the covid-19 outbreak; what estimate he has made of the numbers of (i) bankruptcies and (ii) suicides associated with Loan Charge payment demands; what steps HMRC has taken against companies which advised their clients to use disguised remuneration schemes; and what data has been collected on contractors who worked for HMRC while utilising disguised remuneration schemes. [138366]
[Due for Answer on 20 January.]
ANSWER
The Financial Secretary to the Treasury (Jesse Norman): Taxpayers had until 30 September 2020 to file and pay the Loan Charge or agree a Time to Pay arrangement. Since then, HMRC have contacted taxpayers with a Loan Charge liability to establish what, if any, support they need to pay the amount due. HMRC’s helpline and the dedicated Loan Charge helpline are available to support taxpayers in managing their debt and agreeing arrangements to pay their liability, including referral for independent debt advice and explaining guaranteed Time to Pay criteria.
HMRC do not want to make anyone bankrupt, and insolvency is only ever considered as a last resort. HMRC will work with individuals to reach sustainable and manageable payment plans wherever possible. In line with current practice, HMRC will pause recovery action where a taxpayer has no ability to pay, until there is a significant change of circumstances. HMRC are not always the only creditor and some individuals may choose to enter insolvency themselves based on their overall financial position. HMRC have not made an estimate of the number of people who may become bankrupt and have a Loan Charge liability.
HMRC records show that in six cases taxpayers have very sadly taken their lives and have also been identified as having used a disguised remuneration scheme. On each occasion HMRC referred the case to the Independent Office for Police Conduct (IOPC), and HMRC undertook an internal investigation. Four investigations have been concluded and in all no staff misconduct was identified which might warrant disciplinary action.
In March 2020, HMRC published on GOV.UK their strategy for tackling promoters of tax avoidance schemes, including those who promote disguised remuneration schemes. The strategy sets out HMRC’s work to date and outlines how HMRC will continue to take robust action against promoters of tax avoidance.
HMRC collect certain details of all the contractors they engage as contingent labour, including names, National Insurance numbers and engagement periods. As with other taxpayers, HMRC also hold information returned through PAYE. HMRC maintain a compliance database with information on both individuals and employers who are associated with known avoidance schemes. HMRC do not engage in, or enter into, disguised remuneration schemes. It is possible for a contractor providing services to HMRC to use a disguised remuneration scheme without HMRC’s knowledge or participation.