Strategic approach is needed to thwart promoters behind loan schemes, says Lord Bridges

A strategic approach is needed to tackle promoters of disguised remuneration schemes who cause misery for law abiding people, according to a senior figure at the House of Lords.
Lord Bridges of Headley, Chair of the House of Lords Economic Affairs Finance Bill Sub-Committee, said he was also concerned about reports that workers who had returned to the NHS to help fight COVID were being targeted bypromoters of tax avoidance schemes.Lord Bridges of Headley, Chair of the House of Lords Economic Affairs Finance Bill Sub-Committee, said he was also concerned about reports that workers who had returned to the NHS to help fight COVID were being targeted bypromoters of tax avoidance schemes.
Lord Bridges of Headley, Chair of the House of Lords Economic Affairs Finance Bill Sub-Committee, said he was also concerned about reports that workers who had returned to the NHS to help fight COVID were being targeted bypromoters of tax avoidance schemes.

Lord Bridges of Headley, Chair of the House of Lords Economic Affairs Finance Bill Sub-Committee, said he was also concerned about reports that workers who had returned to the NHS to help fight COVID were being targeted by promoters of tax avoidance schemes.

He told The Yorkshire Post : "We want to get some proper results. Promoters shouldn't be able to shut themselves down and start another scheme. We don't want a whack a mole policy, we need something more strategic. We will be keeping a very beady eye on this issue.

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"HMRC is doing more but these schemes can still be found by using Google. That needs to be addressed.

HMRC said it remains committed to ensuring that everyone pays the tax they owe, including tackling the marketing and use of disguised remuneration tax avoidance schemes.HMRC said it remains committed to ensuring that everyone pays the tax they owe, including tackling the marketing and use of disguised remuneration tax avoidance schemes.
HMRC said it remains committed to ensuring that everyone pays the tax they owe, including tackling the marketing and use of disguised remuneration tax avoidance schemes.

"The people affected by this are often not very well paid. We need to make sure agencies are aware of this and joining these sorts of schemes is not something employees should do. I was particularly struck by the fact that workers who had left the NHS and had returned to tackle COVID were now being targeted.

"We also need to look at the underlying problems that is stimulating demand for these schemes, such as tax policy and the growth of the gig economy.

"It's hard working, law abiding people who are caught up in these schemes."

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Lord Bridges made the comments after the sub-committee found HMRC had made progress in improving the way it manages the loan charge and in tackling promoters of disguised remuneration schemes. However, the sub-committee also found there were far too many shortcomings in the way HMRC's response to the Morse Review is being implemented.

In 2019, a review into the loan charge, conducted by Sir Amyas Morse, found the design and delivery of the loan charge didn’t get the balance right between tackling tax avoidance and protecting the rights of taxpayers and, in some cases, had caused serious distress to the individuals affected.

The Morse review acknowledged there was a public interest in preventing the use of loan schemes to avoid tax and upheld the principle of taxpayers being responsible for their tax affairs.

But it also concluded that the loan charge went too far, overriding taxpayers’ statutory protections by applying an unprecedented 20 year look back period. The review also identified failings in the approach HMRC took to enforcing the policy, which in some cases, fell short of the standards the public has a right to expect; particularly in cases where life changing sums of money are at stake.

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Lord Bridges said: "We want HMRC to live up to the spirit of the Morse review and also understand the predicament people are in post-Covid. They need to be far more empathetic and understanding.

"There needs to be a spread of loan charge payments and a fairer application of rules around reasonable disclosure. The communications with people facing the loan charge needs to be properly joined up."

Responding to the letter from the sub-committee, a Government spokesperson said: “HMRC has reported on the action which they have taken to successfully implement all of the nineteen accepted recommendations of the Independent Loan Charge Review.

“Anyone who thinks they’ll have problems paying the loan charge can ask HMRC for a ‘time to pay’ arrangement. HMRC remains committed to ensuring that everyone pays the tax they owe, including tackling the marketing and use of disguised remuneration tax avoidance schemes.

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“We thank the committee for their letter and will be responding in due course."

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