Boris Johnson assures contractors of a review for Loan Charge 2019

A U-turn by the government to finally agree to review Loan Charge 2019 does not absolve contractors of their duty to provide information to HMRC by the September 30th deadline.

Issuing this alert following Boris Johnson’s vow to run the review which he pledged before becoming prime minister, WTT Consulting said the information return cut-off was still intact.

In fact, contractors having to meet the disclosure requirements before the month-end is one of three caveats to the “good news” that a review is incoming, the tax advisory added.

The other two are that; firstly, action by contractors or HMRC in relation to existing settlements is not suspended, and secondly; payment plans for APNs remain actionable.

'Do not stop'

“If you are making payments under an agreed plan -- DO NOT STOP,” emphasised WTT’s Graham Webber, “as that will result in immediate action to collect any outstanding balance.”

A possible fourth caveat to the ‘good news’ of the review, which ContractorUK and ten other contractor websites pressed Mr Johnson for, could be that it may not be external to Whitehall.

“You did not clarify that the review was to be independent, as you have previously stated it should be,” said the Loan Charge APPG, referring to the PM’s comments in Carlisle in June.

'Consider all potential outcomes'

In a new open letter to Mr Johnson, the MPs on the group also say: “Any review must be independent of HMRC and the Treasury, otherwise it will not…be a genuine review.”

The APPG is further asking No 10 who it will ask to lead the review, and whether the review will “consider all potential outcomes, including changing the Loan Charge and scrapping it.”

On Twitter, contractors are optimistic that Mr Johnson merely forgot to include the word ‘independent’ when last week he told Ross Thompson MP that a review was incoming.

“Fingers crossed” a judge-led review was what the PM meant by saying the government would be ‘undertaking’ a “thorough going review”, wrote one.

But another said they fear that Mr Johnson will appoint a “hostile” judge.

'Step in the right direction'

At his first PMQs, Mr Johnson said: “It is a very difficult issue, a very very difficult issue and what I have undertaken to do is to have a thorough-going review of the matter.”

There are pressing concerns, however. “The upcoming review…is a step in the right direction but it must now be accompanied by HMRC announcing a suspension of all settlements, APNs and debt enforcement actions, until the review reaches its conclusions,” says Labour MP Ruth Cadbury.

Writing on Friday to HMRC’s CEO John Thompson, Anna Turley MP echoed: “I am asking for you personally, to respond to tell me that the settlements will now be put on hold. No new penalties or additional interest should be added, until the review has been concluded.”

'Legally questionable'

Similarly, Julian Sturdy MP said in a letter last week to chancellor Sajid Javid that he would like to “join calls for the implementation of the Loan Charge to be suspended”.

The Loan Charge APPG summed up: “More important [than who will run the review and whether it will consider all outcomes] is that the government should now announce [that]…all associated settlements and any APNs will be suspended.”

Writing to the prime minister directly after Wednesday’s Loan Charge protest, the MPs added: “We are sure you would agree that it would be quite wrong (and legally questionable) for HMRC to seek to continue settlement discussions now that [it] is known that the Loan Charge is to be reviewed.”

The cross-party MP group has since said that it has learnt from HMRC that new settlements are on hold, as part of a general pause at HMRC to its settlement work, extending to the issuing of documents.

'HMRC customers may be unclear'

Officially however, HMRC’s position suggests it is recommended to meet the September 30 deadline, adhere to payment plans and remember that settlements are not under suspension, all of which WTT Consulting advises.

A spokesman for the Revenue told ContractorUK: “Following the prime minister’s announcement of a review into the loan charge, we understand customers may be unclear about what they should do in regard to the 30th September information return, and/or settling their Disguised Remuneration affairs.

“Further information about the review is expected shortly and we will confirm the next steps for customers soon after. No settlements have been suspended and the Loan Charge remains in force.”

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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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