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A Treasury Minister, Mel Stride MP, has been slammed by campaigners and an MP for a false statement made during Treasury Questions in the House of Commons, when he wrongly accused thousands of law-abiding citizens of breaking the law.
In Treasury questions (3rd July 2018) Mel Stride said that “the arrangements entered into by those who are in scope of this measure [the Loan Charge] were not legal when they were entered into, even though they may have been entered into in the past”. This is simply and completely wrong. The schemes were legal and there has never been any suggestion that they were not.
Contractors’ campaign group, the Loan Charge Action Group, have sent an urgent letter to Mel Stride demanding he correct the record. The letter has also been sent to the Speaker of the House of Commons, John Bercow and to the two MPs who asked questions about the Loan Charge to Mr Stride, Stephen Lloyd (Liberal Democrat, Eastbourne) and Peter Aldous (Conservative, Waveney).
The false statement was made in response to Peter Aldous’ question, when he challenged the Government over the bankruptcies the Loan Charge will cause to many people and urged them to revise the legislation to avoid this. Peter Aldous has pledged to contact the Minister regarding the false claim.
The Minister’s false statement adds more weight to the serious concern that the Treasury have failed to do a proper impact assessment of the Loan Charge. The impact assessment Ministers refer to claims that the package of reforms of which the Loan Charge is a part “is not expected to have a material impact on family formation, stability or breakdown”.
This is patently not true – as many people have experienced severely detrimental impacts on family stability including relationship and marriage breakdown. The Treasury also have failed to understand the impact on the contracting sector and on the NHS, leading to a total of 67 MPs calling on the Government to revise this disastrous and ill-considered policy.
Earlier Stephen Lloyd had called for the Treasury or HMRC to set up a 24-hour helpline to field calls from those facing severe anxiety and suicidal thoughts as a result of being contacted by HMRC about the Loan Charge. This follows a letter from LCAG to Jon Thompson, Chief Executive of HMRC, demanding HMRC set up a helpline, a letter than three weeks later, he has failed to respond to despite the suicide risk being reported to HMRC.
The LCAG letter sent to Mel Stride asking him to correct the record is attached.
Richard Horsley, Spokesperson for the Loan Charge Action Group said:
It beggars belief that the Minister responsible for overseeing the introduction of the Charge has made a false statement to the House of Commons about it. Mr Stride needs to correct the record as a matter of urgency and apologise to all the law-abiding citizens he wrongly claimed were breaking the law.
When you also consider that HM Treasury failed in their impact assessment of the policy, this confirms our fears that there simply isn’t a proper understanding on what the consequences of this ill-considered policy will be. We know the disastrous effects it is already having on mental health, but it’s also clear it will do huge damage to contracting in the UK and to the economy. It’s time Ministers got their facts straight and accepted the real consequences of this disastrous policy and revised it.
Notes to Editors
About the Loan Charge Action Group
The Loan Charge Action Group has been formed to raise awareness of the Retrospective tax charge introduced by HMG in the 2017 Budget and build a community where affected individuals can find information and support. The Group does not provide any form of chargeable service or professional advice.
About the Loan Charge
HM Govt has nasty surprise in store for anyone miss-sold an Employment Arrangement involving remuneration through ‘loans’ next April in the form of the 2019 Loan Charge. Everyone who has ever been employed through such as structure will be hit with a retrospective charge in the 2018-19 tax year.
Stephen Lloyd’s Parliamentary Motion states:
This House recognises that the Charge will affect contractors, freelancers and agency workers, including social workers, supply teachers and bank and locum nurses and doctors; notes that employment was not an option and in some cases the company or organisation insisted on those arrangements, including to avoid paying National Insurance… believes it is unfair that HMRC are pursuing people who acted in good faith rather than the client organisations, agencies or umbrella companies all of whom benefited significantly; notes that HMRC are aggressively pursuing individuals…. with no independent right of appeal; further believes that the Charge is likely to cause financial distress and bankruptcies, and believes that retrospectively taxing something that was technically allowed at the time, is unfair.