Jeremy Hunt and Boris Johnson back 2019 Loan Charge Review
No doubt inspired by an appeal by ContractorUK and others, and an open-letter to Jesse Norman attracting its 203rd MP signature, both prime ministerial contenders committed on Friday to such a review.
Mr Johnson, who is no longer the national polls’ favourite to succeed Theresa May as prime minister, did so in earnest, yet it was Mr Hunt who made the commitment first.
'If that's what's needed'
Appearing at the latest Tory leadership hustings, chaired by LBC presenter Iain Dale, Mr Hunt said that “if an independent inquiry” into the charge “is what’s needed, I’ll do that.”
Mr Hunt also said "yes" when Mr Dale pointed out that the loan charge is "incredibly unfair" for being retrospective in nature, but the Foreign Secretary then sounded cautious:
"It may be [incredibly unfair] but I am not going to make a decision on the spot on something like that," Mr Hunt said. "I think that it is important that you look at the details but I would certainly look at it with a lot of sympathy for those people [loan charge contractors]."
When the question of the April tax was put to Mr Johnson, whose brother Jo Johnson MP is a fierce critic of the charge, the answer was broadly the same in substance, but less conditional.
“What these individuals were doing, was clearly a pretty clever way of minimising their tax exposure by treating income as a loan,” Mr Johnson began, in a slightly inauspicious start for hopes of a review.
“On the other hand,” he quickly added, “they were encouraged to do it, and they were told that it was an acceptable thing to do.
“It seems superficially unjust, to me, that they should then be retrospectively pursued for what they were told was an entirely legal option.”
Mr Johnson added that the charge therefore “needs a proper independent review” – without using the caveat of 'if needed' that Mr Hunt inserted, seemingly in a nod to concerns about the HM Treasury review.
The former Mayor of London also said: "I think the real culprits in this matter, if I may say so, are perhaps not so much the individuals themselves who have decided to...use the loan charge as a way of minimising their tax exposure, it’s the people who advised them that that was the sensible thing to do. In my view we should find a way to go after them".
The Loan Charge Action Group, which supports affected contractors and has called for a suspension of the charge to allow a judge-led review, reflected on social media:
“Great to hear both [the] Tory leadership candidates Jeremy Hunt and Boris Johnson support an independent review into the grossly retrospective loan charge. The loan charge must now be paused while a full, transparent, and independent review is carried out.”
Affected contractors also took to Twitter, saying that given both the prime ministerial contenders agree that a review is needed, the tax in force from April “should be halted now.”