PARLIAMENTARY WRITTEN QUESTION
Tax Avoidance (22 January 2019)

To ask the Chancellor of the Exchequer, how many people subject to the 2019 Loan Charge were contractors who were contracted to (a) HMRC, (b) a Government Department, (c) a local authority and (d) another public sector body for some or all of the period of the contract the renumeration for which is now subject to the Loan Charge.

Asked by:
Ed Davey (Liberal Democrat)

The 2019 loan charge is targeted at artificial tax avoidance schemes where earnings were paid via a third party in the form of ‘loans’ which in reality were never repaid, ‘disguised remuneration’ (DR) schemes.

HMRC has never endorsed or participated in disguised remuneration tax avoidance schemes. It is possible for contractors to use disguised remuneration without the participation or knowledge of their engager. As a contracting authority, the majority of HMRC’s contracts are via an agency and use the Crown Commercial Service’s framework contracts, or service contracts with contracted suppliers. Any contractor identified in the course of HMRC’s compliance work as using a tax avoidance scheme would be investigated in the same way as any other contractor.

The Government estimates that up to 50,000 individuals will be affected by the 2019 loan charge. The loan charge applies to all users of DR tax avoidance schemes. It does not single out a specific group or industry. Further information on who the charge affects can be found in HMRC’s issue briefing at: https://www.gov.uk/government/publications/hmrc-issue-briefing-disguised-remuneration-charge-on-loans.

The data requested is not available.

Answered by:
Mel Stride (Conservative)
28 January 2019