Tax trio endorses Lords' attack on HMRC's 2019 Loan Charge

Another three endorsements of a report strongly criticising HMRC and its administration of the 2019 Loan Charge have been sounded.

Published on Tuesday by the House of Lords economic affairs committee, the report was initially endorsed by IPSE, WTT Consulting and Qdos Contractor.  

The Loan Charge Action Group has now joined that trio, alongside two leading tax professionals – Chris Leslie, a former head of investigations at the Revenue, and Paul Spindler, a former partner at chartered accountancy firm Kingston Smith.

“Finally, someone has seen that HMRC have been given too much power,” said Mr Spindler,  the chief financial officer at digital agency Sandiamedia Group.

“The absurdity of the Contractor Loan Settlement Opportunity including years that HMRC never opened enquiries into points to a situation where HMRC could recover tax, [but] not normally, due to their mismanagement of the enquiry process.”

Mr Leslie, who used to work at the tax authority, pointed out that as a general rule, HMRC should have exercised “reasonable discretion” when probing taxpayers caught by the charge.

But in their enquiry, the Lords found the Revenue to be guilty of a “failure to pursue taxpayers proportionately to their circumstances”, so much so that it caused them “anguish”.

“The extent and nature of the investigations should be proportionate to tax risk,” said Mr Leslie, boss of Tax Networks Ltd. “The inequality of arms and costs are well-illustrated [by the Lords in their report].

He added: “[While] there is a balance to be struck and HMRC are tasked to achieve results, with newly trained investigators with substantial regulatory powers, the matter is ‘concerning.’ I do not think, in my opinion, parliament can let this continue.”

The Loan Charge Action Group sounds less sympathetic. “[This] report exposes HMRC’s aggressive and unfair pursuit of those affected by the retrospective Loan Charge”.

The group also highlighted another of the Lords’ findings -- HMRC’s “profound failure to target scheme providers,” it said, contrary to claims made by the Treasury to MPs in the House of Commons.

“The tide is turning,” the LCAG said last night. “With this level of support and understanding from both the House of Lords and [now] over 104 cross-party MPs, it is time that this monstrous unethical piece of legislation was amended and HMRC held to account for its appalling treatment of 'customers'.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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