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Written question asked by Stephen Hammond (Conservative) on Monday, 11 May 2020, in the House of Commons. It was due for an answer on Wednesday, 13 May 2020. It was answered by Jesse Norman (Conservative) on Tuesday, 19 May 2020 on behalf of the Treasury.

Disguised Remuneration Loan Charge Review

Question

To ask the Chancellor of the Exchequer, with reference to page 4 of the Independent Loan Charge Review: report on the policy and its implementation which states that the law on loan arrangements became clear in 2010, for what reasons the Finance Act 2017 included legislation on those arrangements.

Answer

Disguised remuneration (DR) schemes have been used since the 1990s.

The Government announced targeted anti-avoidance legislation to tackle DR schemes in a written ministerial statement in 2010, and introduced it in 2011. This aimed to put beyond doubt that DR schemes are ineffective and to discourage their use.

Despite the Government’s attempts to eliminate the use of these schemes it was clear by Budget 2016 that DR schemes continued to proliferate. That is why the Government announced a package of measures to ensure DR scheme users pay their fair share of tax. These measures, including the Loan Charge, strengthened existing rules and aimed to draw a line under the use of DR tax avoidance schemes. This was legislated for in the Finance (No.2) Act 2017.

HMT officials work closely with colleagues on all tax policy, including on the Government’s response to the use of DR tax avoidance schemes and on the introduction of the Loan Charge in Finance (No.2) Act 2017.

Secondary information

Type
Written question
Reference
45077
Session
2019-21
Grouped for answer
Yes
Subjects
Tax avoidance Disguised Remuneration Loan Charge Review
Legislation
Finance Act 2017
Link
View this Written question on www.parliament.uk