The man leading the review into the loan charge has been told that the controversial policy is having a devastating impact on tens of thousands of people.
Leading figures from the All-Party Parliamentary Loan Charge Group (APPG) said they had a positive first meeting with Sir Amyas Morse, who is in charge of the review.
The MPs discussed the “huge amount” of evidence submitted to the APPG and communicated their “serious concerns” about the policy, which critics say undermines the rule of law. MPs say that it has also been linked with a number of suicides.
Sir Ed Davey MP, chairman of the Loan Charge APPG (Liberal Democrat) said: “We were very pleased to meet with Sir Amyas Morse, on behalf of our 169 Parliamentarians and to express our serious concerns about the whole loan charge scandal.
“This is a review we have fought for and so we are keen to assist Sir Amyas and his team. We welcome his clear commitment that his review will be independent. We welcome Sir Amyas’ commitment to meet with the APPG again, when we can ensure a larger number of Parliamentarians can give evidence on behalf of their constituents. I was impressed by his willingness to engage and listen.
Sir Ed added: “Nonetheless, we continue to have concerns about the timescale the Treasury have insisted upon for the review, and strongly believe Sir Amyas should be allowed more time, with the review being accompanied by a suspension of the Loan Charge and APNs (accelerated payment notices).”
Ruth Cadbury MP, Vice-Chair of the Loan Charge APPG (Labour) said: “We are encouraged with the way Sir Amyas clearly listened and committed to read our loan charge inquiry report and other evidence we will submit. To be a genuine review, it must be evidence based and we encourage all those affected to submit evidence to the review.
“We will continue to make the case that the loan charge is a dangerous affront to natural justice and speak up on behalf of thousands of constituents who have approached APPG members.”
A submission compiled by the APPG states: “The evidence clearly shows that the main reason the vast majority of people entered into payroll loan schemes was not to avoid tax, which is the basis for the aggressive pursuit by HMRC and indeed the whole punitive approach of the loan charge.
The statement added: “The overwhelming majority of people sought and followed professional advice. Many sought further reassurances that the schemes were legal and compliant with tax law.
“They were advised that they were. The way the Treasury and HMRC continually..claim that people entered into these schemes as a form of deliberate ‘aggressive tax avoidance’ is simply not supported by the evidence.”
The APPG said any schemes that provide unacceptable ways to avoid paying tax should be stopped through legislation.
The statement added: “ It is the retrospective nature of the loan charge which is fundamentally wrong. This is why any charge should only apply from the point it became law.”
The APPG claims there was “grossly inadequate” Parliamentary scrutiny of the loan charge, “which is one of the key reasons the loan charge has been such a disaster”.
The APPG said it would also share details with Sir Amyas of suicides which have been reported to the group.
The statement added: “The most egregious thing about the loan charge legislation is that in one fell swoop it takes away the basic right of a citizen to defend themselves in court, against claims made by the state and instead makes HMRC judge, jury and executioner.”
The review is set to announce its recommendations in mid-November, a timetable which has been laid down by the Treasury.
The loan charge was introduced in response to the Treasury’s concerns about “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.
An HMRC spokesperson told The Yorkshire Post recently: “HMRC is committed to treating all those we serve with respect and consideration.
The spokesman added: “We have committed to giving people as long as they need to pay the loan charge as we completely understand that facing a large tax bill can be difficult and stressful.”