Another 50 MPs attack Loan Charge 2019

Fifty-two Tory MPs have lent credence to the idea that Philip Hammond could use this month’s Spring Statement 2019 to postpone Loan Charge 2019 by asking him outright.

So on top of the Loan Charge APPG, which called for a delay last week, and contractor tax firm Orange Genie, which says March 13 is an ideal time for the chancellor to reconsider, Ross Thomson MP has written to Mr Hammond directly.

Sent on Friday, the letter highlights the serious harm to individuals and families that the charge will cause if it goes ahead from April, mainly due to it being “undeniably retrospective,” Mr Thomson and his Conservative colleagues say.

'Must be put back'

The Loan Charge APPG, of which the Aberdeen South MP is the vice-chair of said: “The April introduction must be put back [and] then a genuine independent review [of the Loan Charge] is needed.”

Helen Christopher, operations director of Orange Genie, last week suggested that the chancellor could use his statement to parliament in under two weeks’ time to fall in line with his colleagues (over 120 MPs have signed an Early Day Motion).

Writing for ContractorUK, Ms Christopher said that should a challenge result in an overturning of the charge, “HMRC would be unable to impose charges on individuals where no enquiry has been opened.”

'Out of time'

But even without such a challenge, HMRC’s Jim Harra has reportedly admitted that the tax authority may not be able to force every individual in the crosshairs of the April charge to pay up.

In fact, where people used their tax returns to give HMRC complete and accurate details about the arrangements, and it was not acted upon, “HMRC is out of time” to make further inquiries,” Mr Harra writes in a letter.

Seen by the Sunday Times, the letter from the HMRC tax commissioner to Treasury Select Committee chair Nicky Morgan, adds: “If the taxpayer settles for those years, they are doing so voluntarily.”

'Take a loan out'

As well as acknowledging this ‘out of time’ argument, Mr Harra reportedly concedes that individuals who provided HMRC with only some information might still be able to fight their case at a tribunal.

But it is a throwaway line from a tax official who the committee questioned alongside Mr Harra, HMRC’s Mary Aiston, that appears to be keeping the Revenue on the ropes over the loan charge.

“It’s possible for some people we may say ‘You need to take a loan out if you’ve got equity in your property,’ if that’s the right answer and people can manage the repayments,” Ms Aiston said at the time, mainly to deny HMRC’s policy was as draconian to force people to sell their homes to pay the charge.

'Debt advice'

But ‘debt advice and the provision of personal loans or lending’ is on the Financial Conduct Authority’s list of regulated activities and HMRC is not approved by the FCA to give debt advice, Sir Edward Davey pointed out at the weekend to the Financial Times.

The FCA is due to respond to a letter Mr Davey has sent raising his concerns, although HMRC has since reportedly said that while it does not give personal financial advice, it does consider the assets of taxpayers to pay “legally owed” tax debts where the individual lacks liquidity.

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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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