Loan charge: HMRC settled with large corporations for just 15 per cent of what was owed, MPs told
A Freedom of Information request has revealed that HMRC settled with large corporations for just 15 per cent of what was owed for a number of tax schemes, MPs have been told by Greg Smith, the co-chair of a major cross party group.
During Treasury questions, Conservative MP Mr Smith, who is co-chair of the Loan Charge and Taxpayer Fairness All Party Parliamentary Group (APPG), asked the Chancellor, with the loan charge review ongoing, if she agreed with him that individuals should be treated no differently to this precedent set with large corporations.
Responding for the Government, Exchequer Secretary to the Treasury, James Murray said Mr Smith had engaged with the Government about the loan charge previously.
Mr Murray added: "There is an independent review into the loan charge ongoing at the moment. I think it's really important that I as a minister don't comment on that and let the independent reviewer complete his work and then report back to us as a Government."
Labour MP Emily Darlington said the loan charge scandal is “absolutely awful and devastating” affecting tens of thousands of people's lives.
She added: "It failed to be addressed under the last Government, can the Minister please tell us what he is doing to make sure that people still aren't being sold this illegal product?”
Mr Murray added: "I can reassure her that alongside the loan charge review the Government has published a consultation on a comprehensive package of measures that close in on promoters of marketed tax avoidance, these contrived schemes as we know both deprive public services of funding and also leave their clients with unexpected tax bills."
In January, Mr Murray commissioned Ray McCann, former President of the Chartered Institute of Taxation, to lead the new independent review into the loan charge, after MPs denounced the policy as flawed and punitive.
The Loan Charge, first announced in 2016, was designed to tackle historical use of contrived tax avoidance schemes that seek to avoid charges of income tax and National Insurance by disguising remuneration as a form of non-taxable payment, typically a loan.
There was an outcry after people on modest incomes were hit with life-changing tax bills after following professional advice.