The review, commissioned by the chancellor, Sajid Javid, will consider whether the policy is an appropriate way of dealing with disguised remuneration loan schemes used by individuals who entered directly into these schemes to avoid paying tax.
The disguised remuneration Loan Charge was introduced to tackle contrived schemes where a person’s income is paid as a loan which does not have to be repaid.
Disguised remuneration loan schemes were used by tens of thousands of people, and concerns have been raised about the use of the ‘Loan Charge’ as a way of drawing a line under these schemes. The government said it is “clear” that disguised remuneration schemes do not work and that their use is “unfair” to the 99.8% of taxpayers who do not use them.
The Treasury has asked Morse to report back by mid-November, giving taxpayers certainty ahead of the January Self Assessment deadline.
Financial secretary to the Treasury Jesse Norman said: “Everyone should pay their fair share of tax. These disguised remuneration schemes are highly contrived attempts to avoid tax, but it is right to consider if the Loan Charge is the appropriate way of tackling them.
“The government fully appreciates the concerns expressed by individuals, campaigners, and MPs who have raised concerns about the Loan Charge, and the Chancellor has today appointed Sir Amyas Morse, former comptroller and auditor general and chief executive of the National Audit Office (NAO), to lead an independent review of the policy.”
He added: “Sir Amyas is known and respected across Parliament for his expertise and independence of mind. The government looks forward to his report as it continues to tackle these and other tax avoidance schemes.”