Loan Charge-critical MPs hope Harra answers what Frazer failed to

Almost 250 MPs critical of the Loan Charge are asking HMRC chief executive Jim Harra to do what Treasury minister Lucy Frazer won’t.

In a letter to Mr Harra, and in receipt of an “unacceptable” response from Ms Frazer, the Loan Charge and Taxpayer Fairness APPG asks to be provided with “straight,” “direct” answers.

The ask follows the parliamentary group in December 2021 posing 10 “important” Loan Charge questions to former QC Ms Frazer, but she ‘ignored several of the key questions asked,’ making for a “disappointing” reply.

'Not acceptable'

Counting 247 MPs as its members, the LCTF APPG also said: “Key facts and figures have not been forthcoming which, considering that eight people subject to the Loan Charge have taken their own lives, is simply not acceptable.”

In their letter to Mr Harra, the group continues: “It is the duty of the civil service to give a full and accurate picture of a government policy with open, complete and honest answers. This has simply not been what has happened with the Loan Charge.”

Indicating Ms Fraser did provide information (a copy of her responses has been requested by ContractorUK), but just not information that corresponded to the 10 questions asked, the MPs tell Mr Harra that they do not need “the usual accompanying rhetoric” from HMRC.

'Other action against promoters?'

Instead, they ask Mr Harra to specify how many people face the Loan Charge; what the mean average owed to HMRC is; how many have paid the charge and how many associated bankruptcies have occurred.

Among the few queries to HMRC’s first permanent secretary which do not require a short numerical answer, the APPG asks for details of “other action”, civil or criminal, which has launched against loan charge promoters.

But if the MPs want answers by Mr Harra that don’t seek to “divert and confuse” -- as their letter boldly states, his evidence last month to the Treasury Select Committee doesn’t bode well.

'We do use prosecution'

Asked by Tory MP Kevin Hollinrake how many people since 2016 have been convicted for crimes relating to promoting tax avoidance schemes involving disguised remuneration, to the suggestion “none” have, Mr Harra, after a shaky answer from an HMRC colleague, said:

“You may be right about disguised remuneration but since April 2016, more than 20 people have been convicted of offences relating to arrangements which have been promoted and marketed as tax avoidance and then received over 100 years of custodial sentences.”

Mr Harra added: “And we’ve got more enquiries underway. So, we do use prosecution against promoters where there is criminality involved in their promotion of avoidance schemes.”

'Failed to answer'

On behalf of their members which include more than 140MPs who have signed an open letter calling for prime minister Boris Johnson or chancellor Rishi Sunak to intervene on the Loan Charge, the LCTF APPG tweeted:

“Part of the Loan Charge scandal has been the way HMRC and the Treasury have failed to answer questions and provide important information. There are a number of key things related to the Loan Charge that must now be answered.”

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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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