Iain Duncan Smith writes to Boris Johnson and Sajid Javid over Loan Charge 2019

Iain Duncan Smith, a former leader of the Tory party, has written to the current and new leader, Boris Johnson, to hold him to account about his promise to review Loan Charge 2019.  

In a letter to the new prime minister, Mr Duncan Smith appears to imply that the promise by Mr Johnson was made not just at the party’s leadership hustings, but to him personally.

“During the leadership campaign”, writes the MP for Chingford and Woodford Green, “we discussed the matter of the 2019 Loan Charge and the urgent need for the new Government to rethink this highly unfair and damaging policy”.

'Needs a proper review'

Even if Mr Johnston does not recall his discussion with ‘IDS,’ who led the Conservatives for the two years from 2001, the record of the Carlisle hustings show the now-First Lord of the Treasury saying the Loan Charge “needs a proper review.”

Also at the time, Mr Johnson said the charge “seems superficially unjust”, as people are being “retrospectively pursued” by HMRC for using schemes that, at the time of use, were “entirely legal”.  

Unlike his then-rival Jeremy Hunt, Mr Johnson went on to take issue with those he called the “real culprits” -- the “people who advised them [loan charge contractors]” to use the schemes in the first place.

'Perfectly legal'

It is an accountability issue which Mr Duncan Smith seems to know bothers the new occupant of No 10, given that his letter to Mr Johnson states:

“These loans, which at the time were perfectly legal, were advertised by many financial advisors, accountants and other financial specialists as a means of legal tax avoidance or otherwise savvy investing.

“There was no indication or suggestion of illegality or tax evasion while individuals were using this schemes.”

'Much appreciated'

Reflecting on Twitter after Mr Duncan Smith uploaded a picture of his letter, a copy of which was also sent to the new chancellor Sajid Javid, the Loan Charge APPG told him that his written appeal was “much appreciated.”

“209 parliamentarians including 79 Conservative MPs are calling for an immediate suspension of the Loan Charge…and an independent review”, the APPG added. “[It’s] something Boris Johnson said was needed.” 

But sounding much less upbeat, the cross-party group of MPs revealed they have now “finally” heard back from HMRC, having asked it why the tax authority illustrated its internal memos on the Loan Charge with an aggressive-looking tiger.

'Evade scrutiny'

“HMRC[’s responses] fail to answer questions asked and continue to evade scrutiny,” the APPG says. “In one case we pointed out their FOI response failed to answer questions. So what do they do? Cut & paste the same FOI response.”

In particular, the initial response by HMRC of ‘why’ a tiger was chosen was that ‘the Tiger Logo was not specific to the DR project, and was used in some internal staff communications by the Counter-Avoidance Directorate.’

Now, the Revenue has simply told APPG chair Sir Ed Davey, who asked the question: “HMRC have already answered your points”. The response adds: “HMRC does not have, and has never had a Project Roar.”

A confused Loan Charge APPG tweeted: “We  didn’t ask about ‘Project Roar’ yet they tell us they don’t have one.”

'Clear breach'

The MPs added: “Here are the questions that HMRC [has] deliberately ignored/refused to answer (which is a clear breach of the Civil Service Code).

“Why are they so reluctant to say why they chose a snarling tiger and if they think this is appropriate in the light of known Loan Charge suicides? This is disgraceful”.

Finding fault with the Revenue too, Mr Duncan Smith sounds as if he wants either the prime minister or the chancellor to intervene against HMRC, on behalf of the 140 of his constituents who he says are affected by the Loan Charge.

'Highly concerning'

“I myself have witnessed…during one of my constituency surgeries where my constituent expressed some highly concerning intentions to prematurely end his life because of HMRC’s vicious pursuit against him.”

The former Work and Pensions secretary also says in his letter to Mr Johnson: “It has always been a governing principle that we should not apply legislation retrospectively. This position is a breach of natural justice and is harming for too many people who did what they believed was correct at the time.”

Profile picture for user Simon Moore

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.
Printer Friendly, PDF & Email

Sign up to our Weekly Newsletter

Keep up to date with everything in the world of contracting.

 

Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question