Commons Sense

House of Commons · Ministers' Questions

Loan Charge: Prosecutions

Tuesday 27 April 2021 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Ministerial Questions on Loan Charge: Prosecutions took place on 2021-04-27
  • HMRC has made arrests or prosecuted people related to fraud, particularly in relation to disguised remuneration loan-busting schemes
  • The Finance Bill includes measures aimed at preventing the promotion of tax avoidance schemes and ensuring their disclosure

Topics (select to filter)

Questions & Answers

Q1 Julian Lewis Con New Forest East
Justice & Courts Taxation
Context

The question arises from the debate over tax avoidance schemes, specifically those subject to the loan charge. There is concern about the discrepancy in prosecution efforts between scheme promoters/operators and individuals misled by these schemes.

Question

How many promoters and operators of schemes subject to the loan charge have been prosecuted for promoting and operating those schemes?

Answer from Jesse Norman

Promotion or enablement of a tax avoidance scheme is not, in and of itself, a criminal offence. However, HMRC has made arrests or prosecuted people related to fraud, particularly in relation to disguised remuneration loan-busting schemes.

Partly answered

Not addressed: The number of prosecutions for promoting or operating tax avoidance schemes was not provided.

How: Change Of Subject

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Q2 Julian Lewis Con New Forest East
Taxation
Context

There is ongoing debate about the disparity in treatment between individuals who invested in tax avoidance schemes believing them to be legitimate versus the promoters of these schemes. The question highlights concern over the perceived leniency towards promoters.

Question

My understanding is that very few promoters of these schemes have been prosecuted. Is it not rather shocking that so many people who were mis-sold the schemes on the basis that they were perfectly legitimate are being pursued so relentlessly, while the promoters are in some cases being allowed to continue their work unhindered?

Answer from Jesse Norman

The suggestion that promoters are being allowed to do just anything is quite wrong. The Finance Bill includes measures aimed at preventing the promotion of tax avoidance schemes and ensuring their disclosure, along with other related actions. HMRC takes such issues extremely seriously, as evidenced by a significant reduction in the tax gap from £3.7 billion in 1995-06 to £1.7 billion in 2018-19.

Partly answered

Not addressed: The specific issue of leniency towards scheme promoters was not addressed directly, focusing instead on general measures and a reduction in tax gaps.

How: Change Of Subject

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