The Government must name and shame promoters who became rich from loan charge scandal - Greg Wright

The promoters of loan charge schemes should be forced to testify in front of MPs, says Greg Wright
The promoters of loan charge schemes should be forced to testify in front of MPs, says Greg Wright
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IF the Government is serious about tackling the injustices caused by the loan charge scandal it must name and shame the promoters and advisers who have caused misery for thousands of law-abiding people.

The Government must honour its pledge and unveil a host of draconian measures against the promoters of loan schemes in the next Budget.

But we must not slam the stable door after the horse has bolted. The promoters who became rich on the back of these schemes should be hauled before MPs and forced to explain their actions.

Professional bodies must be encouraged to take disciplinary action against anyone who has behaved unethically. The behaviour of the promoters behind these schemes has been beneath contempt.

To quote Sir Amyas Morse’s independent review of the loan charge, which came out in December: “The review found numerous examples of contemporaneous promotional material from scheme promoters into the 2010s minimising the risks of using schemes and continuing to present such behaviour as legitimate tax planning despite the clear risks.

“Whilst doing this, some promoters also took considerable fees whilst convincing others to use schemes that they would have known were very unlikely to work.”

So while they became wealthy, many of the people who had relied on their advice were hit with large and unexpected tax bills.

Sir Amyas, the former head of the National Audit Office, concluded the schemes were a form of tax avoidance but made a series of recommendations about the design of the charge and its impact on those in its scope.

The review was commissioned to look at the impact of the charge, which was introduced to tackle what the Treasury described as “disguised remuneration schemes”.

Earlier this week, the Financial Secretary to the Treasury, Jesse Norman, told the House of Commons that, of the estimated 50,000 individuals affected by the loan charge, the Government currently estimate that more than 30,000 will benefit from the changes.

He added: “That includes about 11,000 people who will be taken out of paying altogether. In addition, individuals who have settled or who are settling their tax liability with Her Majesty’s Revenue and Customs will be out of scope of the charge.”

However, Seema Malhotra MP said the Government must clampdown on anyone who promoted these disguised renumeration schemes in the first place.

Mr Norman said it was “absolutely right that it is important to crack down on promoters”.

He added: “At the Budget we will bring forward a package about how to do that.”

HMRC told Sir Amyas that its activity is now concentrated on the remaining promoters who are likely to be responsible for the majority of loan schemes being sold. In 2019-20, HMRC has said it expects to double the resources involved in tackling promoters.

In his review, Sir Amyas said the Government must improve the market in tax advice and tackle the people who continue to promote the use of loan schemes. It must become easier for taxpayers to challenge promoters and advisers who are misselling loan schemes.

The review called on the Government to publish a new strategy within six months, addressing how it will establish a more effective system of oversight, which may include formal regulation, for tax advisers.

The loan charge has driven honourable people to despair. Before the election, the Loan Charge APPG said it had received reports of seven suicides of people who were facing the loan charge. Last year I had the privilege of meeting Gayle, whose father committed suicide while facing the charge.

She said: “I don’t think we are the only family grieving.”

But what happened, I wonder, to the promoters who were happy to promote these loan schemes? Are they hiding in plain sight? Sir Amyas slammed the “reprehensible behaviour” of people who are still marketing the schemes.

They should be ordered to explain their actions in front of our elected representatives.