The All-Party Parliamentary Loan Charge have written an open letter to the Chief Executive and Permanent Secretary of HMRC, Sir Jonathan Thompson, to challenging him on HMRC clear misinformation in statements made by HMRC (and then repeated by the Treasury) about the 2019 Loan Charge.

The letter catalogues numerous instances of HMRC providing misleading information and presenting other information out of context to give an impression other than the reality of the point made. The letter follows increasing concern amongst MPs and journalists about the accuracy and honesty of statements being made by HMRC and the Treasury regarding the Loan Charge, a 20-year retrospective tax that undermines the rule of law by overriding statutory taxpayer protections.

The Financial Secretary to the Treasury, Mel Stride MP, was challenged on the BBC Radio 4 Money Box show on 2nd March 2019 regarding promoters of loan arrangements. He refused, on three separate occasions, to answer a question about how many criminal convictions HMRC has secured against promoters of loan arrangements. The truth is that there have been none relating to loan arrangements.

The letter to Sir Jonathan breaks down HMRC and the Treasury’s misinformation into six areas:

  • HMRC’s (and the Treasury’s) statements regarding convictions on payroll loan arrangements
  • HMRC representation of the outcome of legal cases
  • HMRC claims regarding ‘typical’ liability
  • The fact that HMRC contractors are caught by the Loan Charge
  • HMRC statements about bankruptcy and selling homes
  • HMRC claims that 75% of revenue related to the Loan Charge will come from “employers” and that 85% paid so far has come from “employers”

The letter lays out detailed evidence of the misinformation and asks specific questions that the APPG demands are answered:

“…with pertinent and relevant answers and will not attempt to do what HMRC and the Treasury have done consistently with regards to the Loan Charge, which is to regurgitate the same arguments in response to all challenges. That is not acceptable and would be a clear refusal to answer these important questions, each and every one requiring a factual answer.”

The letter references the Civil Service code which requires that Civil Servants must not “deceive or knowingly mislead ministers, Parliament or others”, and must not “ignore inconvenient facts or relevant considerations when providing advice or making decisions”.

The letter follows a letter to the Chancellor of the Exchequer, Philip Hammond, demanding a retraction and apology of a false claim made in the Treasury report, a report described by MPs as a “whitewash” and that the Treasury were acting in “bad faith”, see http://www.loanchargeappg.co.uk/news/appg-demand-retraction-and-apology-from-the-treasury-over-false-claim-in-whitewash-report/.

Sir Ed Davey MP, Chair of the Loan Charge APPG (Liberal Democrat) said:

“Parliamentarians need straight answers from Ministers and Civil Servants in order to perform our role of oversight. HMRC and the Treasury have, so far, appeared willing to say whatever is necessary in order to justify the Loan Charge. It is telling that HMRC would not even attend our inquiry to answer questions in person and have also been caught out issuing misleading statements in an attempt to justify an unjustifiable policy. This is totally unacceptable and we now call upon Sir Jonathan Thompson to respond to our points properly and honestly”.

Ruth Cadbury MP, Vice-Chair of the Loan Charge APPG (Labour) said:

“HMRC and the Treasury repeat the same discredited arguments over and over again but worse than that, there appears to be a deliberate attempt to mislead. It is disgraceful the way HMRC and the Treasury have sought to give a false impression of actions taken against promoters by referring to convictions that have nothing to do with the Loan Charge. So we are now challenging HMRC to give honest answers and to stop issuing misleading statements which is not acceptable for a public body”.

Ross Thomson MP, Vice-Chair of the Loan Charge APPG (Conservative) said:

“The reality of the Loan Charge policy and its impact is now becoming clear. I am disappointed the HMRC have so far declined the invitation to appear before our inquiry. Because of the amount of misinformation that has come to light, we do need to hear the reasons for that from the civil service. The APPG also believe that this whole matter needs an independent investigation, relative to the Civil Service Code.”

The full letter can be read here: http://www.loanchargeappg.co.uk/wp-content/uploads/2019/04/2019_04_02-Letter-from-LC-APPG-letter-to-SJT-re-campaign-of-misinformation.pdf

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Notes to Editors

  1. The All-Party Parliamentary Loan Charge Group (Loan Charge APPG) has been created to bring together parliamentarians of all parties from both Houses of Parliament who have concerns about the nature and impact of the ‘2019 Loan Charge’ which will come in to force on the 5th of April 2019 and also concerns about the wider context of fairness of tax legislation and HMRC’s conduct in enforcing it. See www.loanchargeappg.co.uk and Twitter @LoanChargeAPPG. The Loan Charge APPG is an officially registered Parliamentary Group, as described on the UK Parliament website www.parliament.uk/about/mps-and-lords/members/apg/.

The Officers of the Loan Charge APPG are as follows:

  • Rt Hon. Sir Ed Davey MP, Chair, MP for Kingston and Surbiton (Liberal Democrat)
  • Ruth Cadbury MP, Vice-Chair, MP for Brentford and Isleworth (Labour)
  • Ross Thomson MP, Vice Chair, MP for Aberdeen South, (Conservative)
  • Rt. Hon. Baroness Kramer, Vice-Chair, (Liberal Democrat)