Loan Charge and Taxpayer Fairness APPG writes to the Financial Secretary to the Treasury with 10 key questions on the Loan Charge that need answering

The Loan Charge and Taxpayer Fairness APPG has written to the new Financial Secretary to the Treasury, Lucy Frazer QC MP, with 10 key questions on the Loan Charge that need answering, as they tackle some of the key reasons why the Loan Charge is fundamentally flawed, as well as unfair.

The letter, sent from the three Co-Chairs of the Group – Sammy Wilson MP (DUP), Greg Smith MP (Conservative) and Mohammad Yasin MP (Labour) – comes shortly after HMRC confirmed that there have now been eight suicides of people facing the Loan Charge.

The important letter raises key points that so far the Treasury and HMRC have not addressed. These include:

  • That the key conclusion of the Morse Review, that the law was clear from December 2010, is fundamentally flawed.
  • That the reality of the Rangers Supreme Court Ruling in 2017 crucially determined that employers, not employees, are liable for any tax deemed to be due, something which HMRC have admitted they cannot find any legal precedent to overturn.
  • That a court judgement ruled that HMRC cannot retrospectively transfer liability to employees.
  • That HMRC failed to collect PAYE from agencies when they should have done.
  • The reality that no loan scheme promoters have been prosecuted for promoting loan schemes nor asked to pay any of the disputed tax.
  • That HMRC interfered in the selection of experts to advise the Morse Review and have since given an incorrect account of the process.
  • The fact that the Loan Charge denies citizens the right to go to court to challenge it
  • The fact that HMRC have failed to honour the Morse Review recommendation regarding voluntary restitution of payments by taxpayers who are no longer subject to the Morse review due to the changes in the Finance Act 2020.

The letter points out that Loan Charge was not properly scrutinised by Parliament when introduced, nor does it have any relevant or justified legal basis. It should never have been passed and the Government must now rectify this by announcing legislative change, as well as instructing HMRC to pause any enforcement of the Loan Charge and associated Accelerated Payment Notices.

The letter finishes by calling again for a fresh and fully independent review of the Loan Charge, one properly independent of HMRC and the Treasury. The Loan Charge APPG have called for this and it is backed by the opposition parties as well as many Conservative MPs. 146 Parliamentarians have so far signed a letter to the Prime Minister and the Chancellor calling for a new review and a fair resolution to the Loan Charge issue http://www.loanchargeappg.co.uk/wp-content/uploads/2021/11/Open-Letter-To-The-Prime-Minister-And-Chancellor-On-The-Loan-Charge-July-2021.pdf

Commenting, Loan Charge APPG Co-Chairs said:

Sammy Wilson MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG (DUP):

“The latest letter from the Loan Charge and Taxpayer Fairness APPG to the Treasury lays out the key issues that demonstrate why the Loan Charge is flawed and why a review is essential. The reality is that the Loan Charge simply does not have the legal precedent to allow HMRC pursue ordinary workers as they have done. It was brought in without proper Parliamentary scrutiny and with a seriously flawed impact statement and as HMRC have confirmed, there have tragically now been eight suicides. The Government must now put this right and we urge Lucy Frazer to look at the facts not the propaganda and accept that a fresh review and a fair resolution are desperately needed”.

Greg Smith MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG (Conservative):

“We are hopeful that the new Financial Secretary to the Treasury, Lucy Frazer, will pause and genuinely look at the reality of the huge weight of evidence that shows that the Loan Charge is unfair and fundamentally flawed. We are encouraged that she is prepared to listen and we hope she will look at the issue and realise a fresh and genuinely independent review is necessary. We look forward to the response and to meeting with her to discuss this”.

Mohammed Yasin MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG (Labour):

“It’s simply unacceptable the way that both HMRC and the Treasury have failed to answer questions or address key points regarding the unfair Loan Charge. It is time that we had proper, meaningful answers and not template replies that don’t even address the points raised. The Loan Charge and Taxpayer Fairness APPG will continue to press for answers and for a fair resolution to the whole issue”.

[Ends]

Notes to Editors

1. The Loan Charge and Taxpayer Fairness APPG (All Party Parliamentary Group) consists of parliamentarians of all parties from both Houses of Parliament to raise concerns about the 2019 Loan Charge and associated tax laws which will affects thousands of freelance, contract and locum workers in the UK, as well as the wider context of fairness of tax legislation and the conduct of Her Majesty’s Revenue and Customs. 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/.

2. The Officers of the Loan Charge APPG are as follows:

  • Sammy Wilson MP (DUP) – Co-Chair and registered contact
  • Greg Smith MP (Conservative) – Co-Chair
  • Mohammed Yasin MP (Labour) – Co-Chair
  • Baroness Susan Kramer (Liberal Democrat) – Vice-Chair
  • Dr Lisa Cameron MP (SNP) – Vice-Chair
  • Gerald Jones MP (Labour) – Vice-Chair
  • Sarah Olney MP (Liberal Democrat) – Vice-Chair
  • Rushanara Ali MP (Labour) – Vice-Chair
  • Fleur Anderson MP (Labour) – Officer
  • Alex Sobel MP (Labour) – Officer