Treasury admits to zero loan charge promoter convictions

The Treasury has admitted that not a single promoter of Disguised Remuneration schemes has been convicted of criminal offences.

Although it is not a revelation, the admission by Jesse Norman has been welcomed for directly answering a question that was posed, in a refreshingly, plain-speaking, frank way.

Previously when asked about action against promoters, the Treasury has spoken of ‘six arrests’ but these were of individuals for suspected fraud, and only in relation to DR schemes.

'Convictions of promoters of schemes subject to the charge'

Trying to avoid the same brush-off, Nic Dakin MP asked specifically; “how many criminal convictions there have been of promoters of loan schemes subject to the loan charge.”

The uncharacteristically frank reply for HMT is: “To date, no promoters of Disguised Remuneration schemes have been convicted of criminal offences related to DR schemes.”

Specialist tax advisory WTT Consulting reacted last night with clearly mixed feelings.

“On the one hand, we welcome what we hope will be the start of a period in which honest answers are given in parliament which has previously had to endure evasive responses to simple questions.

“On the other, it is shocking that after more than 15 years of investigation into hundreds of schemes -- HMRC claim over 250, and no doubt tens of thousands of contractors, they have been unable to pin the blame where it belongs – on those who sold products based on often false promises,” the advisory said.

'Name and shame'

This failure to hold promoters accountable is despite the Revenue having been granted more than 100 new powers, added WTT Consulting’s director of tax Graham Webber.

“And those 100 new powers were accrued in the last five years alone, and they include the right for HMRC to ‘name and shame’ defaulters,” he said.

“Perhaps naming and shaming promoters of mass marketed schemes – at the time they were being offered – would have prevented some of our clients from being entrapped.”   

'HMRC may conduct a criminal probe'

Such mass marketed schemes were mentioned by Mr Norman in his response to Mr Dakin.

“There are no criminal offences specific to the promotion of mass marketed tax avoidance schemes but HMRC may conduct a criminal investigation into an individual’s actions when, for example, reliance is placed on a false or altered document, or if the material facts are misrepresented.”

The Treasury minister also said: “Since the formation of HMRC’s Fraud Investigation Service on 1 April 2016, more than 20 individuals have been convicted for offences relating to arrangements which have been promoted and marketed as tax avoidance schemes.”

'Constructive'

As to promoters specifically, albeit not those solely behind DR schemes, Mr Norman said a “significant number” were now under criminal investigation by HMRC.

Yesterday, as financial secretary to the Treasury, Mr Norman had his first official face-to-face with the Loan Charge APPG (which wants the Loan Charge suspended and independently reviewed), in what MPs who attended described as a "constructive" meeting.