THE new chairman of the Treasury Select Committee must launch an inquiry into the conduct of the Treasury and HMRC in connection with the loan charge, a group of MPs said today.
Mel Stride, who has been elected as the committee’s chairman, played a major role in introducing the loan charge in his previous role as a Treasury minister.
Critics say the loan charge breaches the rule of law. The All-Party Parliamentary Group on the Loan Charge (APPG) has received reports of seven suicides of people who were facing the loan charge.
In a tweet, the APPG said: “We call upon Mel Stride, the new chair of the Treasury committee to instigate an inquiry into the loan charge scandal, to investigate why it was deemed acceptable to retrospectively change the law and sweep away statutory protections and investigate the roles and conduct of the Treasury and HMRC.”
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 "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.
In a statement on the loan charge, Mr Stride said: “Disguised remuneration and the loan charge are currently the subject of an independent review which is expected to report back in the middle of November.
“I do not think that anyone should prejudge its likely conclusions but when the report is published I think that it is highly likely that the committee will wish to look further into the recommendations and issues that it may raise. I would work very positively with the committee to that end.
“I would approach all consideration of the Government’s policies in relation to disguised remuneration in an entirely fair and open-minded spirit much in the way that the last chair of the committee (and former Treasury Minister) Nicky Morgan did so well.” On Twitter, Wes Streeting, the Labour MP, for Ilford North, congratulated Mr Stride and said he was looking forward to working with him as a member of the committee.
He added: “But we will have to take appropriate steps to ensure that there is no conflict of interest when he comes to scrutinising decisions he was party to at HMT, particularly the loan charge.”
In April, Mr Stride, who was Financial Secretary to the Treasury at the time, told the House of Commons, that there was a “commonly held misconception” that the loan charge is retrospective.
Speaking in April, he added: “There was never a time in the history of our country where the model for payment that I have just outlined has ever been correct within the tax rules of any previous year. That is a simple fact.”
He added: “Some of the other misinformation includes the idea that thousands upon thousands of taxpayers are about to be made bankrupt. HMRC very, very rarely has a situation where somebody is placed in bankruptcy.”
An HMRC spokesperson 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 more vulnerable customers."
The Treasury has commissioned an independent review to consider the impact of the loan charge.
A Treasury spokesman said: “Sir Amyas Morse is independent and has full control over the review. He will report back by mid-November. We have also set up a disguised remuneration helpline, which can provide details of organisations such as the Samaritans and Mind as appropriate.”