Loan Charge contractors called to counter HM Treasury’s ‘glossing over’

The ‘glossing over’ of the Loan Charge that the Treasury and taxman have done is so severe that the real impact on contractors is now no longer known, MPs say.

Contractors and other taxpayers affected by the HMRC charge must therefore answer a “call for evidence” by the MPs on the policy’s impact, “financially and in other ways.”

Loan Charge and Taxpayer Fairness APPG members, the MPs add in two online forms that if they face the charge or have settled, contractors should respond. The deadline is April 8th.

'As many as possible responses, please'

“We hope as many people as possible fill in the one-page evidence forms,” the cross-party parliamentary group said yesterday.

“[Our] call for evidence is being done because it remains unclear what the reality is for people… because HMRC and the Treasury have sought to gloss over the reality”.

In line with the charge of obfuscation, a written reply by the Treasury’s financial secretary to the loan charge-critical MP group does not appear to answer or correspond with their asks.

'Changing promoter behaviour'

Obtained by ContractorUK, the reply by Lucy Frazer MP groups two of the APPG’s queries to save her replying to each; relays details which weren’t sought, and avoids admissions.

She is asked if her recent ‘changing promoter behaviour’ statement equates to promoter prosecutions and how many, but her reply is a similar statement devoid of such figures.

The QC also talks around questions rather than answers them, such as saying Lord Morse had “full discretion,” when the MPs request the “criteria and conditions” for his assistants.

'Failed to provide'

The loan charge-concerned MPs reflected: “There are a number of key facts that haven’t yet been established, as HMRC and the Treasury have failed to provide them when asked. 

“[We] recently wrote to…[the] chief executive of HMRC Jim Harra, asking 12 key questions relating to key information that thus far the HMRC and Treasury have not provided.”

Greg Smith MP says the point of the new call for evidence is to help MPs understand the current situation “facing those facing the loan charge” and those who have settled already.

'Compassion'

One of the LCTF APPG’s co-chairs, Mr Smith says the details from contractors should help the MPs “more strongly make the case to the Treasury” so it can show “compassion”.

The Tory MP further believes that ultimately HMT must come up with a “fair resolution” that avoids the “many bankruptcies and breakdowns that otherwise will alas happen.”   

But for “unclear” reasons, these ill-effects of the charge seem to be hanging over contractors in the future, rather than happening right now, WTT Consulting signalled to ContractorUK.

'HMRC hesitating on loan charge assessments'

“Why HMRC is hesitating on issuing loan charge assessments [is not clear],” said the tax dispute firm’s co-founder Graham Webber, responding to questions.

“Certainly a reorganisation of staff in 13 regional centres may have an impact. [But] it may also be the case that there are a number of political issues in play within HMRC.”

This reluctance of HMRC to issue assessments is precisely the sort of issue which submissions by contractors to the LCTF APPG might illuminate.

'Contractors need to be on the look-out'

But Mr Webber suggested contractors who respond to the group’s call can’t afford to take their eye of their own situation, especially as tax year-end looms.

He warned: “Contractors need to be on the look-out for 2017/18 Regulation 80 [Determinations] and DAA8s [assessments for NICs] being issued [by HMRC] to their personal service companies, that they may have thought were in the process of liquidation but which have been stalled by HMRC.”

Last night, a freelance programmer affected by the loan charge expressed hope that many contractors would respond to the call for evidence.

'Still fighting this wrongful, retrospective legislation'

“There are 50,000 [individuals] impacted so…[let’s hope] they can all submit their evidence,” said the programmer, Kirti Shukla.

She added in a post: “Please [spread the word, because] we are all still fighting this wrongful retrospective legislation but need you to give your evidence.”

Responses to the LCTF APPG’s call for evidence will be shared with its MP members and HM Treasury, further to being published (anonymously without “personal identifying information”) on social media, the group said.

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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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