Chancellor must publish report into the loan charge immediately

As reported in the Financial Times Adviser:

David Davis has called for the “immediate”
publication of an independent review into the taxman’s controversial loan
charge, warning the “unjust and misguided” policy must be debated in
parliament.

The MP for Haltemprice and Howden sounded the alarm bells in
a letter to Sajid Javid yesterday (December 18) in which he said those affected
by the loan charge had “pinned their hopes” on the review
commissioned by the chancellor in September.

The independent review was led by Sir Amyas Morse and
followed calls from MPs and campaign groups for the retrospective loan charge
to be scrapped, with the Treasury since confirming it has received his final
report.

The loan charge has been levied since the start of this tax
year on those who benefitted from disguised remuneration schemes, used to pay
employees via third party companies which “loaned” the money to the
worker.

The loans were never intended to be repaid and as such HM
Revenue and Customs treated them as tax avoidance, but campaigners have argued
many employees had agreed to the schemes only after seeking expert advice.

Mr Davis said delays caused by the general election meant
those affected by the policy had waited three months to read the review’s
findings as they continued to suffer “financial hardship” and “severe
mental health issues”.

He said: “I therefore urge you to publish the report
immediately so that those affected, as well as MPs, can give it due
consideration.

“Parliament has to then be given the opportunity to
properly and fully debate this unjust and misguided policy.”

The former secretary of state for exiting the European Union
also asked the payment deadline of 31 January be “immediately
suspended” whilst next steps are decided, to give “certainty and
peace of mind” to those tax payers facing the loan charge.

Mr Davis added: “If it is not suspended, the loan
charge will only continue to cause ruinous hardship to thousands across the
country.

“As I have previously said in the chamber, if the
government does not take positive action on this the house will be forced to
find a legislative route to ensure the Treasury and HMRC cannot engage in
retrospective taxation.”

On his Twitter page Mr Davis pledged to “continue
fighting this retrospective and unjust tax on behalf of my constituents”.

A Treasury spokesperson said: “We have received Sir
Amyas Morse’s report into the loan charge. We are considering his report as a
matter of urgency and will update on next steps in due course.”

It is not the first time an MP has urged action on the
policy, with an All-Party Parliamentary Group warning last month the attitude
of HMRC towards the loan charge was “wreaking havoc” on taxpayers.

There have been reports of homelessness and suicides in
connection with the controversial retrospective tax, with the taxman reporting
itself to the police watchdog four times over the deaths of individuals who had
been notified of a loan charge bill.

HMRC at the time maintained it had put in more resources to
deal with the numbers of scheme users who have shown an interest in settling
their affairs and was helping in a number of ways.

It said: “We know that large tax assessments can cause
worry and anxiety so we have put in place dedicated resources, including
specially trained HMRC officers, to support customers.

“We have also set up a disguised remuneration helpline,
which can provide details for vulnerable customers of organisations such as the
Samaritans and Mind as appropriate, and we are committed to time to pay
arrangements in respect of the loan charge, which can run for as long as the
taxpayer needs.”

As reported in The Yorkshire Post:

Campaigners are calling for the immediate publication of a report into a Government policy which critics say breaches the rule of law.

A spokesperson confirmed that the Treasury has now received an independent report from Sir Amyas Morse into the loan charge.

The Treasury spokesman added: “We are considering his report as a matter of urgency and will update on next steps in due course.”

On Twitter, the Loan Charge Action Group said: “The next steps for the Loan Charge report must be its immediate publication by (the Chancellor) Sajid Javid and a delay to the January 31 deadline.”

Sarah Olney, the Liberal Democrat MP for Richmond Park, has also written to the Chancellor to urge him to publish Sir Amyas Morse’s report and to extend the deadline for affected taxpayers.

In a letter, Ms Olney said: “Back in September 2019, the Government commissioned Sir Amyas Morse to conduct an independent review of the loan charge. The findings of the completed report have been withheld during the General Election campaign. I am writing to ask if the report can now be published without delay.”

David Davis. the Conservative MP for Haltemprice and Howden, has also written to the Chancellor, urging him to immediately publish the independent review into the loan charge and to suspend the payment deadline of January 31.

Mr Davis said on Twitter: “I will continue fighting this retrospective and unjust tax on behalf of my constituents.”

The loan charge was introduced in response to the Treasury’s concerns about what it described as “disguised remuneration schemes” which involved individuals being paid through loans, usually via an offshore trust in a low or no tax jurisdiction, which they did not have to repay.

Opponents argue that the charge is retrospective and overrides taxpayer protections – claims which have been disputed by the Treasury.

Workers from a wide range of professions have been hit with large tax bills, which in some cases date back to 1999.

Before the election, the All-Party Parliamentary Group on the Loan Charge (APPG) said it had received reports of seven suicides of people who were facing the loan charge.

Before the election was called, the Treasury commissioned an independent review to consider the impact of the loan charge.

MPs had previously called for all settlement activity, enforcement and penalties to be suspended pending the outcome of the review.

An HMRC spokesperson said recently: “We know that large tax assessments can cause worry and anxiety, so we have put in place dedicated resources, including specially trained HMRC officers, to support more vulnerable customers.”