Liz Truss vows to look into ‘very poorly handled’ HMRC loan charge

Liz Truss would look into both the loan charge and the ninth suicide caused by the loan charge, should she become prime minister.

In a question and answer session in Purley, South London, Ms Truss said a government led by her would “look at what we can do on that specific issue.”

The Tory leadership candidate was replying to a local Conservative member who told her that HM Treasury has recently confirmed the ninth self-inflicted death over HMRC’s policy.

'Very, very tragic'

Truss said it was “appalling to hear” of such a development – which, after restating her pledge to review IR35, she described as “very, very tragic”.

But the foreign secretary did not directly answer the question posed to her, possibly because it came in two separate parts.

Ms Truss was asked: “Will you commit to a genuinely independent review, and to resolve this issue before more people take their own lives?”  

The most direct answer that the qualified management accountant gave was “I’ll certainly look at that”,  given that “the way the whole situation has been handled has been very poor”.

'Is there nothing Truss won't promise?'

Appeals by the contractor sector for Ms Truss and her fellow Tory leadership rival Rishi Sunak to address the loan charge have rung out since the two began their No 10 campaigns.

But rather than please the contractor sector due to her finally addressing the loan charge, her pledge has clearly irritated some.

“Is there nothing she won’t promise in order to be [voted] prime minister?” asked a database developer.

'Anti-contractor rules'

Responding to Truss’s unequivocal IR35 reform vow, the developer added: “Haven’t we learned our lesson about voting for people that tell us what we want to hear”?

An adviser to contractors Graham Webber is also sceptical. “Liz Truss was chief secretary to the Treasury at a time when many…anti-contractor tax rules were introduced.”

A director at HMRC dispute advisory WTT Consulting, Mr Webber said that as the Treasury’s chief secretary, Truss “had the chancellor's ear” but “failed to bend it.”

'Always ready to help those who want to pay'

There will be no bending either from HMRC in its approach to taxpayers caught by the loan charge, despite the cost of living crisis.

Asked by ContractorUK whether it would take up a suggestion from a company turnaround specialist that, due to rising costs for households, HMRC should reassesses taxpayers’ financial means, a spokesperson for HMRC suggested that it doesn't need to.

“Where customers are unable to pay in full on time, we want to work with them – and are always ready to help those who want to pay their tax liabilities.,” the HMRC spokesperson said.

Despite being asked specifically about the cost of living crisis, the HMRC spokesperson declined to mention rising household costs but added:

“We do not want customers to worry and we’re here to make things as straightforward as possible. Customers should call our loan charge helpline on 0300 322 9494 to discuss payment options.”

'Cost of living to worsen in the near term'

Deflated, the turnaround specialist explained: “I [was hopeful and] interested to see HMRC’s approach to assessing financial means given the cost of living increase, and given that it looks like this will worsen in the near term.”

An unwillingness by HMRC to recalculate how it assesses affordability for loan charge contractors despite soaring energy prices and sky-high inflation will not stem charges -- from Ms Truss and others -- that the loan charge is being badly handled.

Steve Packham of the Loan Charge Action Group says: “We are very pleased that Liz Truss has made a public commitment to look into the loan charge and we urge her to do this as soon as possible, if she wins the Conservative leadership contest and becomes prime minister.

“She is right to be appalled at the nine suicides and also quite correct that the handling of the whole issue by HMRC and the Treasury has been very poor.“

'HMRC ploughing on despite cost of living affecting taxpayers'

Mr Packham wants a "proper independent review" of the loan charge  and a "fair resolution," saying that whoever enters No 10 must "review and resolve" the loan charge "scandal."

The company turnaorund specialist agrees but he’s not getting his hopes up.

The specialist told ContractorUK: "[So] HMRC are ploughing on. They are still looking to collect as much as possible [even with a cost of living crisis on].

"Once we have a new PM and cabinet in place [perhaps things will change] -- although with everything else going on, I’m not sure how high up their agenda disguised remuneration or the loan charge will be.”

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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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