Home Accountants Loan Charge inquiry launches and invites evidence from taxpayers

Loan Charge inquiry launches and invites evidence from taxpayers


Loan Charge inquiry launches and invites evidence from taxpayers

The 2019 Loan Charge All-Party Parliamentary Group (APPG) has commenced its formal inquiry into the 2019 Loan Charge this week, which will assess the impact of the unpopular tax on taxpayers, the fairness of the legislation and its controversial retrospective effects, and the background to how such a great many people came to enter into disguised remuneration arrangements under the impression that they were legal, before the Government took action.

The group, chaired by Lib Dem MP Sir Edward Davey, consists of 59 MPs across all of the parliamentary parties except the SNP and Sinn Féin (who refuse to take their seats in the Commons) and the Greens, who just have one seat in the House of Commons.  The group is comprised of 27 Conservative MPs, 22 Labour MPs, 5 Lib Dems, 2 DUP, 2 Plaid Cymru and 1 independent, Lady Hermon.

Sir Davey recently sponsored an amendment to the Finance Bill that requires the Treasury to conduct a review of the Loan Charge and report back to the House of Commons by the 30th March 2019.  The APPG’s inquiry will form part of the evidence of that review, and the Government have said they will accept it as such.  The APPG is now inviting written evidence from any affected individuals, professionals and organisations with knowledge or experience of the Loan Charge, with the deadline for submissions being midnight on Monday, 25th February.

Anybody affected that would like to submit evidence to the APPG should refer to the guidelines on the group’s website for how to do so: http://www.loanchargeappg.co.uk/

The APPG inquiry will review:

  • the legal position at the time schemes were entered into and the powers that HMRC had to close down or tax the arrangements;
  • whether the Loan Charge is justified given the history of judgements in the courts regarding relevant arrangements;
  • the role promoters’ fees played in the arrangements and the tax avoided by clients and agencies by hiring contractors via third party limited companies instead of as employees, and whether these amounts are being considered by HMRC when calculating tax liabilities;
  • how HMRC have dealt with affected taxpayers, the timeframe with which people have been given to pay after being informed of their liabilities, and particularly whether the settlement opportunity has given taxpayers a realistic and affordable way to discharge their debts;
  • if HMRC’s claim to be pursuing scheme promoters is genuine and how successful they have been in this regard;

Particular focus will be placed on the situation affected taxpayers now find themselves in and the impact the Loan Charge will have and is already having on affected individuals, their families, solvency, health and careers.

The inquiry will consist of examining written evidence in addition to oral evidence sessions. The three identified groups that the inquiry will invite to give oral evidence are as follows:

  • Sector professionals
  • Individuals facing the Loan Charge
  • HMRC and HM Treasury

The first oral evidence session, with sector professionals, will be on Wednesday, 13th February.

Commenting, Sir Ed Davey MP (Lib Dem), Chair of the Loan Charge APPG said:

“The All-Party Loan Charge Group is pleased to launch our formal inquiry into the Loan Charge and the impact it will have on people facing it. The inquiry will be the first to focus solely on the Loan Charge and to report before it comes in.

“There has been considerable concern raised about the Loan Charge by MPs and peers. The House of Lords Economic Affairs Committee Report highlighted many concerns and we will be looking at their conclusions and evidence as well as the questions asked by members of the Treasury Select Committee.

“The APPG Inquiry is an important and timely opportunity for proper scrutiny of the Loan Charge before it comes in, and with tens of thousands of people facing life-changing bills, it is vital that the Loan Charge is properly examined before it comes into effect on 5th April.”

Ruth Cadbury MP (Lab), Vice-Chair of the Loan Charge APPG said:

“Constituents from up and down the country have been contacting their MPs about the impact that the Loan Charge, as it is currently devised, will have on them and their families when it comes into effect in just two months’ time.

“There are many question marks about the way the Loan Charge has been implemented and the justification for doing so, as well as the obvious concern for the welfare of many people facing the Loan Charge and huge bills for past tax years that they were not expecting. The Loan Charge APPG looks forward to receiving evidence from all those with an interest in this issue and we will study the Loan Charge in depth, its introduction, its justification and above all the actual effect it will have on individuals, sections of the economy and some key groups of public sector workers.”

The Loan Charge APPG is an officially registered Parliamentary Group and can be reached via their website www.loanchargeappg.co.uk or Twitter @LoanChargeAPPG.  The lobby group Loan Charge Action Group (LCAG) has been appointed secretariat.

12th February 2019.