Barrister takes 20 exceptions to HMRC’s Loan Charge ‘factsheet’

A line-by-line factcheck appearing to accuse HMRC of making more than 20 false or misleading statements about Loan Charge 2019 has been drawn up online by a tax barrister.

Keith Gordon of Temple Tax Chambers took to Twitter on Friday, in response to HMRC saying it needed to give “the facts” about the charge, after MPs won a Treasury review into it.

But the QC says many statements HMRC then linked to in its ‘Factsheet’ on the charge amount to “spin,” totally at odds with the “soul-searching” that he believes it ought to be doing.

So starting at the top with HMRC’s opener, “People who use these scheme are paid in loans, rather than a salary in the normal way”, Mr Gordon proceeds to pick apart the sheet’s ‘facts.’

“The tax code allows employees to be paid in different ways -- cash or benefits or both,” the barrister tweeted, countering HMRC. “They are all taxed differently according to the rules.”

'Does not make it true'

Similarly, his 6th out of 23rd tweet (he individually tweeted and individually numbered each fact-check) states: “ ‘HMRC: This is clearly income and tax should be paid.’

“FACT: Just saying ‘clearly’ does not make it true. If it is a loan, it should be taxed as a loan. And was.”

Even wording that HMRC uses in a graphic at the bottom of the factsheet does not escape Mr Gordon’s scrutiny. “HMRC does not approve these schemes…” the graphic begins.

“FACT: HMRC does not have to approve arrangements,” the barrister says. “They do not even have to like them. If they don’t like them then they should have challenged them or changed the law to stop them gaining momentum.”

'Not challenge'

But the tax office failed to object to them “until 2016 (at least publicly),” the QC says. “Assuming that was indeed HMRC’s position [that the schemes don’t work] -- then why did they NOT challenge them?”

Through ContractorUK in September 2018, the Revenue was asked to give the names of HMRC publications between 1999 and 2001 which specified the schemes as unlawful, but it was unable to do so.

Yet in answer to the question, HMRC did say that it had sent enquiry letters to affected taxpayers before 1999, and said Spotlights 5 and 6 -- published in 2009 and 2010 respectively --  clarified that schemes were ineffective.


“The Loan Charge is a powerful weapon” Mr Gordon wrote on Twitter, before tweeting his line-by-line factcheck of the Revenue’s factsheet.

“However, as HMRC have dehumanised all [scheme] participants they just cannot see why it is so unfair to apply it to contractors. Suicide, divorce and bankruptcy are all human tragedies. But HMRC will not be moved because, in their eyes, everyone affected has ceased [to be] entitled to be treated as a real person.”

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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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