Jesse Norman accused of attempting to prejudice Loan Charge Review
A letter by Treasury minister Jesse Norman to MPs has angered Loan Charge campaigners for appearing to undermine the ‘independent’ review of the charge before it has even begun.
Slammed by MPs as ‘misleading’ and ‘biased,’ the minister’s ‘Disguised Remuneration Loan Charge Review’ letter contains no details about the review in any of its initial paragraphs.
Instead, recipients must read HMT’s stance on the charge and, in effect, why the government believes it to be appropriate -- the very issue which the review is meant to be deciding on.
Only in paragraph six (on the letter’s second page) do MPs get impartial information on the LC Review -- after they have read the minister’s take on how HMRC has helped the affected.
“[Mr] Norman [and his] letter…seems to pre-judge the review by virtue of the opening paragraphs,” said an astounded adviser, Gordon Berry. “He then refers to [it] as 'independent!’”
The Loan Charge APPG agrees. “It’s not acceptable [of] Jesse Norman to be writing such a biased and misleading letter and trying to prejudice an INDEPENDENT review,” it says.
“It’s clear HM Treasury and HMRC are trying to predispose and direct the Loan Charge Review. We’ll challenge that, including to Sir Amyas Morse.”
In his letter, Mr Norman says HMRC will allow Loan Charge contractors in the process of settling to be able to “pause and wait for the [review’s] outcome” before proceeding.
Less positively for campaigners, the minister’s letter emphasises what adviser Mr Berry regards as “distinctive use of the word ‘directly’” in relation to the review’s terms.
In fact, Mr Norman reminds that the review will probe whether the charge, “as it applies to individuals who have directly entered into DR schemes,” is an appropriate response to the tax avoidance activity in question.
The fear is that because many contractors were cajoled and encouraged by agencies or engagers -- who may have even entered them into such schemes – such contractors may be out of the review’s scope, on the basis that they did not enter the schemes themselves, ‘directly.’
Keith Gordon QC explains: “My greatest concern…[and] the most frightening [interpretation of the use of the word ‘directly’ is] that the government has deliberately excluded from the review those very individuals who had the least knowledge about the arrangement that they were being exposed to and, in many real cases, little real choice about them if they wanted to carry on working.
“If this [interpretation] is correct, then this review falls a long way short of the ‘thorough review of the matter’ which was promised by the prime minister in his answer to Ross Thompson MP…in the House of Commons only a week earlier.”
The barrister added: “If the use of the word ‘directly’ was indeed designed to exclude contractors from the scope of the review then no euphemisms will suffice. It puts beyond doubt HMRC’s contempt towards taxpayers and their willingness to use whatever means, however dishonest, to get their way.”
Mr Gordon and the Loan Charge Action Group are among those who have been invited by Sir Amyas to give evidence to his Loan Charge Review.
“The government recognises that concerns persist about the Loan Charge,” Mr Norman says in his letter to MPs (which was also sent to peers), signaling his irritation at the mere idea of the review, or implying those concerns to be unfounded.
The minister also said: “The Review will report and provide recommendations to the chancellor and me by mid-November 2019 so that any individuals affected can have certainty about their next steps in advance of the current 31 January 2020 deadline for individuals to file a 2018-19 Self Assessment return and pay the Loan Charge.”