Key Facts

• Clause 13 creates a statutory income tax exemption for payments and reimbursements of reasonable private expenses incurred by voluntary office holders.
• Voluntary office holders include magistrates, special constables, and others appointed to roles regardless of who occupies the position at any one time.
• The clause aims to bring the tax treatment of voluntary office holders' expenses in line with that for volunteers.
• Disguised remuneration is a form of abusive tax avoidance that costs the Exchequer hundreds of millions of pounds annually.
• The independent review conducted by Sir Amyas Morse recommended notable changes to the policy, benefitting over 30,000 people.
• Clause 14 amends the date for disguised remuneration loans subject to the loan charge from April 6, 1999 to December 9, 2010.
• The Labour party takes a dim view of tax avoidance.
• Sir Amyas Morse’s independent review into the loan charge has led to changes in the Finance Bill.
• Approximately 40% of pre-2011 tax years covered by the loan charge did not have investigations opened by HMRC.
• The all-party loan charge group has over 200 members from various political parties.
• More than 30,000 individuals will benefit from HMRC’s amendments through the Finance Bill.
• Loans made before 2010 are no longer subject to the loan charge under UK Government's amendments.
• The self-assessment deadline has been delayed until 30 September 2020.
• The amendment pertains to clause 15 of the Finance Bill.
• It proposes giving HMRC the power to specify later dates for certain classes of people to make an election to split the loan charge over three tax years.
• This relates to Schedule 11 to the Finance (No.2) Act 2017.
• Taxpayers can choose to spread outstanding loan balances over 2018-19, 2019-20 and 2020-21 tax years.
• Government amendments enable HMRC to defer dates for specific classes of taxpayers affected by the pandemic.
• The changes amend further references to the date of 6 April 1999 in previous legislation.
• The all-party parliamentary group on the loan charge has a secretariat provided by the Loan Charge Action Group.
• Over 200 MPs from both sides support the all-party parliamentary group.
• Sir Amyas Morse's report found issues with HMRC's application of the loan charge policy.
• The current deadline for making an election to spread the loan charge is September 30, 2020.
• There are no plans to revoke or amend elections beyond this deadline.
• Clause 16 implements recommendations 3, 4 and 5 from Sir Amyas Morse's independent review.
• Reasonable disclosure is defined as a declaration in an income or corporation tax self-assessment return.
• The clause does not apply if there was no reasonable disclosure made for the years prior to 2017.
• Clause 20 proposes an independent panel review of the loan charge scheme.
• The review must be completed within six months of the Act passing.
• The review will consider impacts on business investment, employment, productivity, and company solvency.
• The review will assess HMRC's implementation fairness and flexibility in repayment plans.
• Sir Amyas Morse's recommendation 6 allows HMRC to refund settlements made since 2016 for unprotected years before or between specified dates.
• Clause 19 requires HMRC to set up a scheme for refunds of qualifying amounts paid under settlement agreements made with HMRC on or after March 16, 2016 and before Budget day in 2020.
• Clause 20 sets out details for the refund scheme including eligibility and application process.
• New clause 7 would require an independent review of the repayment scheme's impact within six months of passing this Act.
• The Government already committed to report on implementation by the end of 2020 per recommendation 14.
• About 2,000 taxpayers may be entitled to claim a refund under the scheme.
• The London Society of Chartered Accountants wrote that some taxpayers should be returned to their starting position without any loss.
• HMRC's approach to the loan charge has been described as unacceptable by an all-party parliamentary group.
• There have been seven suicides reported among individuals affected by the loan charge.
• Sir Amyas Morse recommended writing off outstanding balances for those with incomes under £30,000 after 10 years of reasonable payments.
• HMRC will not force people to sell their main home or put them into bankruptcy except under unusual circumstances.
• No more than half of someone’s disposable income should go towards settling a tax dispute.
• Settlement periods are five years for those earning under £50,000 and seven years for those earning under £30,000.
• The Government has rejected Sir Amyas Morse's recommendation to write off debts after 10 years but accepted 19 of his recommendations.
• HMRC will refund voluntary restitution already paid for years now out of scope of the loan charge.
• HMRC is enhancing work on combating promoters and enablers of tax avoidance through proactive communications and a consultation process.
• Clause 19 ordered to stand part of the Bill.
• Clause 20 ordered to stand part of the Bill.
• Further consideration adjourned till Tuesday 9 June at twenty-five minutes past Nine o’clock.