PM May: Loan Charge 2019 review is accepted

Theresa May has been drawn into the debate about Loan Charge 2019, after an amendment calling for the retrospective contractor tax to be reviewed succeeded.

The prime minister admitted that the government has now “accepted” the review, in response to Sir Ed Davey, who successfully tabled the amendment requiring it to run by March 31st.  

While she declined the Lib Dem MP’s invitation to meet to discuss the review, Mrs May said the chancellor would meet him instead, to “look at how the review is being taken forward.”

To be run by the Treasury, the review will probe the charge’s retrospective nature (it takes effect in April but affects loans as far back as 1999), which “offends against the rule of law.”

Sir Ed added: “The review that’s now been established must respond to the concerns of MPs across the house. Treasury ministers have a duty to respond seriously and substantively.”

Mel Stride MP, Treasury minister, cut a lonely figure however, by being the only defender of the charge, against 38 MPs who first backed the clause, and then many more subsequently.

“It was an appalling and utterly ungracious response from Mr Stride,” accused Phil Manley, a former HMRC official and partner at DSW Tax Resolutions.

“He conceded to having a review, but then tried to pre-empt its conclusion, parroting the same misleading information the Treasury have been peddling for months.”

Lobbyists at the Loan Charge Action Group yesterday echoed Mr Manley’s hope that officials conduct the review with “honesty”.

The House of Lords Economic Affairs Committee, which has urged that the charge should be amended, and over 110 MPs who want the charge revised, will likely hope the same.

“The review… must be a genuine one and not a whitewash by the Treasury, who have spent months misleading MPs and covering HMRC’s failures,” says LCAG spokesman Steve Packham.

 “If it is genuine, like the recent House of Lords report, it will expose the reality of this damaging and unfair measure.”

Sir Ed said: “The review of the Loan Charge that will now take place will ensure that the government faces the truth about the damage their ill-considered policy will do to individuals, to the contracting industry in the UK, as well as to the economy and public services.”

According to a LCAG survey, more than seven in 10 people affected by the loan charge face bankruptcy; half have lost their home, one-third have experienced relationship breakdown and four in 10 suffer from thoughts of suicide.