Contractors pin hopes on 2019 Loan Charge amendment
Contractors will watch to see if their local MPs vote today on an amendment to the Finance Bill which calls for Loan Charge 2019 to be reviewed.
Tabled by Sir Edward Davey, the amendment could force the Treasury to review the effect of changes made by Sections 79/80 of the bill, which now enters its final stage before royal assent.
Lobbyists at the Loan Charge Action Group have been urging contractors to write to their MPs and urge them to add their signatures to the amendment and then vote for it today.
If the amendment is agreed, the Treasury would have to review the “unfair” charge, the LCAG said, and the chancellor would have to publish a report on it by March 30th 2019.
But the Treasury’s financial secretary, Mel Stride MP, told MPs last month that the ‘arrangements that was entered into around disguised remuneration were always defective.’
While that seems to rule out Mr Stride as a signatory to amendment NC26, due to be voted on later today, the wording does denote a softening in the Treasury’s stance.
“‘Defective’ is a fundamental change from the ‘tax avoidance and evasion’ rhetoric previously used by the Treasury and HMRC to defend its aggressive pursuit of contract workers caught up by this flawed tax legislation,” the LCAG said.
The comments come after two people affected by the loan charge reportedly committed suicide, the group said, with one of those singling out the 2019 tax prior to killing himself.
“Thirty-nine per cent said [to us in a survey we conducted] they had experienced thoughts of suicide or self-harm as a result of the Loan Charge,” said LCAG spokesman Richard Horsley.
“Yet so far HMRC and the Treasury have refused even to set up a hotline for those in distress, despite the House of Lords Committee report recommending this.”
The Lords, who would need to consider NC26 if it gets inserted in the bill, also said the charge should be reviewed and amended in light of “disturbing evidence” about the government’s approach to it, including “reports of increasingly aggressive behaviour towards taxpayers.”
Evidencing this behaviour, Horsley said HMRC used the Christmas period to start bankruptcy proceedings against loan charge contractors, including one taxpayer who was given just 18 days to pay a tax demand of £153,000.