Eleven MPs challenge the Treasury over the Loan Charge in the House of Commons yet Minister continues to mislead

 

A remarkable ELEVEN MPs raised the Loan Charge in the House of Commons at Treasury Questions, challenging the Treasury on this controversial policy. Each one of the eleven, from three political parties, attacked the Loan Charge or the Government’s handling of it. In response, Financial Secretary to the Treasury, Mel Stride, again gave partial and misleading answers and, in some cases, said things that are not true.

The Loan Charge was the first topic raised at the hour-long question session, with Dr Paul Williams (Labour, Stockton South) asking question number one. He raised the fact that people, including a constituent of his, had little choice when using loan arrangements and how unfair it was that such people were being pursued whilst the promoters of loan arrangements were not. Christine Jardine (Liberal Democrat) raised the fact that evidence of three suicides of people facing the Loan Charge has been sent to the Loan Charge APPG, yet shockingly, once again, Mel Stride failed to even respond to this or acknowledge the suicides in his reply, something he has done repeatedly when asked about this in the past – including by Loan Charge APPG Vice-Chair Ruth Cadbury MP.

Ivan Lewis (Labour, Bury South) compared the Government’s persecution of people facing the Loan Charge to WASPI women, attacking them for going after ordinary hardworking people and asking for “common-sense to prevail”.  Jim Cunningham (Labour, Coventry South) also raised that this affects ordinary people and flagged up that nurses are also affected.

Ex Cabinet Minister Justine Greening (Conservative, Putney) exposed the unfair retrospective nature of the Loan Charge with an example of a constituent who paid what HMRC demanded in 2015, but now is being pursued for more money out of the blue, showing how HMRC are moving the goalposts, which proves that that the Loan Charge is retrospective. Julia Lopez (Conservative, Hornchurch and Upminster) raised the distress of her constituents affected by the Loan Charge and the fact that ‘settling’ with HMRC involves giving up the right to a review in case of any subsequent change in Government policy and that people feel trapped between that prospect and the risk of further financial penalty from HMRC if they do not come to an agreement quickly.

Joseph Johnson (Conservative, Orpington) said “something has clearly gone very wrong with the operation of the Loan Charge” and asked Mel Stride to commit to pause both the Loan Charge and the roll-out of IR35 to the private sector until his constituents’ concerns have been fully addressed. Laurence Robertson (Conservative, Tewkesbury) also raised the unfair retrospective nature of the Loan Charge asking, “whether it is right that HMRC can go back 20 years to reopen accounts that were accepted” and asking the key question “if this tax was due then, why did HMRC not obtain that tax then? Why did it not charge it then? Why has it taken it 20 years to get to this point?”.

Vice Chair of the Loan Charge APPG Ross Thomson (Conservative, Aberdeen South) raised the “persecution of innocent people” and he compared this with the treatment of  an individual convicted of benefit fraud who was given 900 years to pay off the £88,000 that they had defrauded from the state, but those facing the Loan Charge have not committed any criminal offence or broken the law, yet “they are being hounded by HMRC for unaffordable sums”. Ross asked the Minister “why HMRC is persecuting innocent people to the point that it is affecting their mental and emotional wellbeing while allowing convicted fraudsters such leeway?”.

Peter Dowd (Labour, Bootle), the Shadow Minister, pointed out the failure to clamp down on promoters of loan arrangements now subject to the Loan Charge and criticised “feeble answers showing inertia and inaction”.  He asked, “why are the Government not doing more to crack down on lawyers, accountants and others aiding and abetting tax avoidance under the guise of legitimate tax planning?”. He also called on those involved in promotion of loan schemes to be denied access to public contracts. Anna Turley (Labour, Redcar) said she has “listened in astonishment to the answers from the Financial Secretary and the Chancellor about the loan charges” and asked “why do they pursue constituents like mine, many of whom were obliged to undertake these tax changes in order to get work?”

Once again, Mel Stride gave deeply misleading answers including claims that simply are not true, something that has categorised his entire handling of the Loan Charge scandal. He claimed repeatedly that the tax was ”always due” when he knows that this has never been proven and he tried to claim that HMRC have been cracking down on promoters of the arrangements subject to the Loan Charge, when the reality is that HMRC have not only failed to provide any evidence but have refused to say which, if any, promoters they have taken action against. Mel Stride was caught out on BBC MoneyBox giving deliberately misleading answers, misrepresenting convictions that are nothing to do with loan arrangements, as if they were (see P. 73, Loan Charge Inquiry report http://www.loanchargeappg.co.uk/wp-content/uploads/2019/05/Loan-Charge-Inquiry-Report-April-2019-FINAL.pdf).

There is now huge opposition to the Loan Charge in Parliament with 152 MPs signed up to Early Day Motion 1239 which calls for the scrapping of the retrospective element of the Loan Charge. The Loan Charge APPG now has 150 members and their damning Loan Charge Inquiry Report called for the retrospective element to be dropped and for sanctions against those who have carried out the cynical campaign of misinformation.

Thousands of families are facing ruin, including bankruptcy, loss of homes and pensions due to the Loan Charge which breaks normal legal convention and allows HMRC to go back twenty years. Those facing the Loan Charge – who include social workers, teachers, doctors and nurses as well as IT contractors – followed professional advice and submitted their tax returns every year and in many cases, HMRC never challenged them at the time. They now face life-destroying tax bills that they cannot pay and cannot fairly appeal.

Steve Packham, Spokesperson for LCAG said:

“It’s extraordinary that eleven MPs criticised the Loan Charge in Treasury questions, this shows the huge strength of feeling against the Loan Charge in Parliament and we thank each and every one of the eleven MPs who asked the questions.

“The responses from Mel Stride were, once again, deeply and deliberately misleading and it is disgraceful the way he continues to misrepresent this issue. He and the Government already knows there is a majority of MPs supporting a delay and independent review, yet he continues to ignore this and instead misleads MPs. Mel Stride has shown himself unfit to be a Minister and we can only hope that he is replaced in the coming weeks by a Minister with integrity and one who will actually listen”.

Notes to Editors

Media Contact: Mark Sebright – marks@imagenuk.com / 07988 680796

  1. The full exchanges of ten of the questions are here https://hansard.parliament.uk/Commons/2019-05-21/debates/A0EB47F0-397A-4039-9C6B-1C2D1CB6C1A0/LoanCharge
  2. Anna Turley MP’s topical question is here https://hansard.parliament.uk/Commons/2019-05-21/debates/F7F2DBCD-36AF-487E-B617-58726064843A/TopicalQuestions
  3. About the Loan Charge Action Group: The Loan Charge Action Group seeks to raise awareness and reform of the retrospective Loan Charge introduced by HM Treasury in the 2017 Budget and to build a community where affected individuals can find
  4. Information and support. The Group does not provide any form of chargeable service or professional advice. Visit hmrcloancharge.info