Treasury minister faces IR35 questions, as loan charge pressure mounts

Lucy Frazer, the new financial secretary to the Treasury, will today be grilled by a panel of peers probing IR35 reform, just as she comes under pressures over the loan charge.

The Treasury minister will appear at 4.15pm in front of the House of Lords’ Finance Bill Sub-Committee, to give oral evidence to the off-payroll working inquiry follow-up.

But as the committee is known to be critical of the Revenue’s disguised remuneration policy, Ms Frazer might have to field questions on the Loan Charge too.

'Need answers'

The prospect of her being asked how IR35 reform has increased avoidance schemes (as the peers were told in an earlier session by the FCSA), is greater due to a letter she has received.

Penned on behalf of almost 150 MPs in the Loan Charge and Taxpayer Fairness APPG, the letter asks the minister to respond to 10 questions on the loan charge, that “need answering.”

Crucially, question 10 asks Ms Frazer if she will “now engage with external experts, fully independent of HMRC and the Treasury” to ensure the loan charge gets “properly” reviewed.

'Eight suicides'

Sarah Green MP echoed on Friday, with a distressing development: “The government has confirmed that eight people facing the loan charge have now lost their lives due to suicide.

“In light of the heavy toll that the loan charge is taking on the lives of those facing it, will the government commit to a fresh and independent review of the loan charge?”

Growing concern about the impact on thousands of families if HMRC enforces the loan charge has triggered a second letter to Ms Frazer, a former lawyer.

'Affordable settlement'

Co-signed by 12 advisers, the letter outlines a proposal for HMRC to resolve the charge by offering a settlement opportunity, for those facing the charge and those who settled already.

Broadly, taxpayers would pay an “affordable proportion of the tax that HMRC believes is owed,” but the final figure would factor in other criteria including promoter mis-selling.

“It should also be affordable, easy to understand, and ensure that where an individual had tried in the past to be compliant, they are given credit as appropriate, “ the advisers say.

“HMRC [should] consider making proportionate adjustments to sums being demanded from affected taxpayers who have already settled with HMRC on a less generous basis, or who are continuing to do so.”

Ms Frazer will appear later today here alongside HMT’s Suzy Kantor, and HMRC’s director of individuals policy Carol Bristow, and its deputy director of employment status and intermediaries Peter Downing.

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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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