Loan Charge 2019 Review opens up to contractors, alive to ‘independent’ concerns

The “further details” which the government promised at the 2019 Loan Charge Review launch have been released, seemingly alive to concerns about the review’s ‘independence.’

The reviewer himself, Sir Amyas Morse, has been doing his bit too to stem the concerns, by having meetings with MPs and others and reportedly indicating that he will not be bossed.

Former Tory leader Iain Duncan-Smith, who met with Sir Amyas yesterday morning, said: “Most importantly [he] made it very clear that he intended to be independent and impartial”.

'Morse has the final say'

Freshly released terms of reference for the review, which is now accepting evidence from all parties, confirm that “the reviewer has the final say on what is published in the report.”

But critics will point out that such a clarification is only necessary because Sir Amyas will be flanked in his work by officials “drawn from HM Treasury and HMRC,” add the terms.

Sounding suspicious at the staffing arrangement which it itself has put in place, the review says: “HMT and HMRC must make all possible efforts to support the review team’s work.

“[This includes] providing them with any information that they request, unless there is a legal reason why they cannot do so, which must be detailed to the team.

“If there is an administrative reason why it is not possible–such as the disproportionate time required to produce the information– then the reviewer has the right to raise this issue to the director personal tax, HM Treasury, who then can then make a final decision, following consultation with HMRC.”


While the review’s open call for evidence last night pleased supporters of Loan Charge contractors (a call which the terms suggest Sir Amyas decided on), not everyone is convinced.

Pointing out that he only left the Whitehall-run National Audit Office in May, a volunteer with the Loan Charge Action Group said of Sir Amyas’ review:

“I do have concerns, because the NAO is [so closely involved with parliamentary bodies like HMT and HMRC], so can its [former boss’s] new review really be fully independent?”

The LCAG volunteer added: “And the focus will be on the impact of the Loan Charge, [which although worrying]…means its legality or retrospective nature [won’t be scrutinised].”

'Unnecessarily narrow'

MPs on the Loan Charge APPG agree. “The [review’s] scope…seems unnecessarily narrow and focused on the Loan Charge itself, not the wider issues of whether the Loan Charge undermines the rule of law”.

They also said: “It leaves out the APNs that HMRC have issued en-masse and which have been battled over for many years. It leaves out the fact that HMRC opened investigations many years ago and then did nothing year after year.”

The MPs want Sir Amyas to factor-in the “whole history” of the charge, and the taxman’s corresponding activities – of which there is abundance of evidence from contractors, advisers and the APPG’s own review.

'Wide range of people'

When it provided details yesterday of how people can get in touch with the review, there was some suggestion that Sir Amyas is not interested in carrying out a narrow piece of work.

“Over the coming weeks, the review intends to consider the great deal of information publicly available on the Loan Charge”, HMT officials wrote.

“The review is interested in hearing from a wide range of people and understanding their different perspectives to inform the review. If you would like to provide supporting documentary evidence then please email it to:”


As to those Loan Charge contractors already dealing with HMRC, fresh guidance has been issued as to what the review might mean for them, following a HMRC spokesman conceding that the review could cause individuals to become “unclear” about their next steps.

The six-part guidance is broadly in line with what tax dispute specialists WTT Consulting has already recommended to ContractorUK readers, although there are a few useful clarifications.

For example, addressing contractors who provided all the required LC information by April 5th 2019, HMRC says such contractors can continue to finalise settlement if they choose.

'You may want to wait'

However, in light of the review, which does have the power to recommend changes to the law, the Revenue says it “recognise[s] that you may want to wait for the government’s response to the review before finalising your settlement.”

The department adds: “You do not need to submit the additional information return by 30th September 2019 as HMRC already has the information it needs.”

Elsewhere in the guidance, HMRC says there is no change due to the review for instalment-payers, and says that non-settlors still need to abide by the September 30th deadline – also the date by which the review must receive all written submissions for them to be considered.

'Dodgy schemes'

That appears to imply that calls for a suspension of the loan charge and, in turn, a delay to the information return deadline, have been rejected. But one industry body has another concern.

“[The] loan charge….is having a devastating impact on the lives of many innocent contractors who were unwittingly lured into these toxic schemes [but] I would like to fire a note of caution to the government,” say the Freelancer & Contractor Services Association.

“These schemes will continue to pop up until they shut them down once and for all, particularly when the off-payroll reforms come into effect in the private sector in April 2020.”

Julia Kermode, FCSA’s chief executive added: “Contractors have been lured into dodgy schemes because they would have faced a drop in their incomes once forced onto the payroll by public sector firms in 2017 when they made blanket ban decisions on hiring contractors. Government must surely sit up and listen and learn from the stories they have heard thus far around the loan charge, so that more lives are not impacted.”

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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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