HMRC are 'backing people into a corner' over the loan charge, say MPs

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A group of MPs is calling for a suspension of the loan charge to stop people “being rushed into life-changing decisions”.

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The loan charge must be suspended now, according to MPs.

The loan charge must be suspended now, according to MPs.

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Members of the All Party Parliamentary Loan Charge Group have written to Sir Amyas Morse, who is leading the loan charge review, calling on him to ask the Treasury for a suspension.

In a letter to Sir Amyas, the MPs said: “There is now a clear need for an immediate suspension of the loan charge due to the calling of the General Election, which makes it impossible for Parliament to discuss the recommendations of your loan charge review and for a Government to reasonably implement its recommendations in time, with the loan charge falling due on January 31 2020.

“Some of the changes that could be recommended by your review could well need amendments to legislation, but this will now not be possible until mid-January at the earliest. Therefore it is illegitimate to require people to declare the Loan Charge on January 31, currently the date they must do so. So suspension of the Loan Charge and all associated activity is essential.

“In light of this fact, we also believe that you also should extend your review timetable, to be able to properly and fully examine all the evidence sent to you. Not only will there be no Parliament to consider your findings and recommendations, which is important, it is simply not credible to think that the current Government, with Ministers all electioneering, could possibly consider the report and recommendations nor respond in the way that is needed, in normal political times, outside of an election.”

The letter added: “It is simply not possible for Government (the current one and the next) to consider and implement the findings of the review, let alone for scrutiny of the Treasury’s

actions by Members of Parliament.

“It is also not reasonable nor fair to give people a matter of days to consider the Treasury’s reaction to the review findings and to take necessary actions. People must not be rushed into taking life-changing decisions and must be given sufficient time to carefully consider the consequences of any announced changes to the policy on their personal situation.

“So the Loan Charge must be suspended now and we urge you to request the Treasury does this.”

The letter added: “The Loan Charge APPG also reiterates its call for the Treasury to suspend all related activity including any payments due according to signed settlement contracts and HMRC’s aggressive pursuit of outstanding Accelerated Payment Notices.

“These should be paused until the review is complete and the findings fully implemented. We continue to receive evidence that HMRC are backing people into a corner through such tactics and that this is having terrible consequences for mental health and for family life. This cannot continue whilst parliament is not in session and the policy is under review.”

Opponents of the loan charge argue that it is retrospective and overrides taxpayer protections - claims which have previously been disputed by the Treasury. A review has been commissioned into the loan charge after hundreds of MPs expressed concerns about the policy.

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.

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

The Treasury has commissioned an independent review to consider the impact of the loan charge, which is due to report back by mid-November.

A Treasury spokesperson said; “The Government is awaiting the recommendations of the independent loan charge review and will set out its response in due course.”

The Government has said it cannot pre-judge the outcome of the review before it concludes.

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.

“We have also set up a disguised remuneration helpline, which can provide details 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.

“We are committed to treating everyone we serve with respect and sensitivity to their needs and circumstances.”