Loan Charge contractors implore MPs to vote for ‘fairness for all’ clause NC31

Contractors are involved in a last-minute Twitter campaign to get MPs to vote for a Finance Bill clause to cap Loan Charge 2019, to cases where the taxpayer knew the loan was taxable.

Tabled by David Davis MP and to be voted on tomorrow, the clause would have the effect of cancelling the charge before 2016 for all who acted in good faith and on professional advice.

Only those who deliberately evaded tax, meaning they knew they had received money which was taxable as income but did not declare it to HMRC, are hit under the clause – ‘NC31.’

'Swept up thousands'

Also according to its supporters, such as Loan Charge APPG chairs Sir Ed Davey and Sir Mike Penning, the clause represents the last chance for legislative change before September.

Then, specifically on the last day of the month (Wednesday 30th) is when HMRC has told contractors that they must have finalised settlement to avoid the loan charge from applying.

“[The loan charge] has swept up thousands of ordinary people who did not seek to avoid tax, but merely followed professional advice,” states a Finance Bill briefing note sent to MPs.

'Should instead be targeted'

Obtained by ContractorUK ahead of tomorrow’s debate on the clause before a vote, the note adds: “In some instances they were advised or even required to use such arrangements.

“They should not face this retrospective charge and it should instead be targeted only at those who acted in the knowledge that they were doing something unlawful.”

Keith Gordon QC agrees.“NC31 removes the inherently unfair loan charge from most taxpayers allowing the protections conferred by statute to have the effects as intended by parliament.”

'Constitutional day in court'

Online, the barrister also said: “[The clause] lets taxpayers have their constitutional day in court to pursue whatever arguments they make about their arrangements.

“It allows them to access the full range of statutory safeguards available to all other taxpayers when facing HMRC challenges. It lets the tribunal decide.”

A lobbyist and support group for people caught by the charge, LCAG, hails the clause a “big step forward” in replacing the HMRC policy with fairer treatment for taxpayers.

“Now is the time for everyone to push their MP to vote in favour,” the group said yesterday.

“All [our] members [should] look out for [an] email sent this evening with urgent actions. Please ask family and friends to join in at this crucial time.”

'Huge pressure from HMRC'

Dependent on NC31 receiving enough ‘AYE’ votes from MPs tomorrow is another clause, Amendment 55, designed to allow those who have already settled with HMRC to be repaid.

“Under huge pressure from HMRC, and facing the Loan Charge, some people have already settled,” MPs are told in the briefing note.

“This second amendment has also been tabled to provide that these people, if they were not deliberately evading tax, will receive refunds from HMRC.”

'Hope and pray'

Signalling their support for Amendment 55 (as they have already added their name to NC31), are Andrew Gwynne of Labour, Owen Thompson of the SNP, Tim Farron of the Lib Dems, Sammy Wilson of the DUP, and Crispin Blunt of the Conservatives, among other MPs.

“You cannot begin to imagine how grateful we are for this,” a Loan Charge contractor tweeted.

“We now hope and pray that enough MPs will support these amendments and make a huge difference for Loan Charge victims.”

'Decades of HMRC failings'

“I would urge all MPs to support NC31,” encouraged Mr Gordon, who says the loan charge is designed to remove statutory safeguards “in order to cover up decades of HMRC failings.”

The legal expert added: “[The clause] does not clear historical tax debts.

“It lets HMRC exercise their full range of administrative powers to challenge loan schemes provided HMRC took timely action”.

Seeming to address MPs ,the barrister said he believed that NC31 “reinstates fairness into the tax system,” meaning “a vote for NC31 is a vote for fairness to all.”

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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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