Steve Packham, Andrew Earnshaw and Richard Horsley
Loan Charge Action Group (LCAG)
Sidwell,
Pottmanns Lane
Bexhill-On-Sea,
East Sussex
TN39 5JL
Rt. Hon. Mel Stride MP
Financial Secretary to the Treasury and Paymaster General Her Majesty’s Treasury
1, Horse Guards Road
London
SW1A 2HQ
3rd July 2018
Dear Mr Stride,
We are writing to you on behalf of the Loan Charge Action Group to express our astonishment that you, as responsible Minister for the draconian 2019 Loan Charge, made a factually incorrect statement in the House of Commons about said Charge. This is something we feel that urgently needs clarifying at the earliest opportunity.
You stated in Treasury Questions today, 3 rd July 2018, that “the arrangements entered into by those who are in scope of this measure [the 2019 Loan Charge] were not legal when they were entered into, even though they may have been entered into in the past”.
This is quite simply, completely, and absolutely wrong. The schemes were legal when entered into then and are still legal now, and there has never been any suggestion that they were or are not.
It is not only astonishing but is totally appalling that you have made what is a dangerously false claim by suggesting that law-abiding citizens, who have not broken the law in any way, were somehow doing something illegal.
In this vein we write to you as a matter of urgency and are copying in the two MPs who asked questions about the Loan Charge at Treasury Questions as well as copying in Mr Speaker, the Rt. Hon. John Bercow MP.
You must correct the record as a matter of priority so that it is clear that you accept you were wrong to even suggest that the many individuals, including our members, have done anything illegal.
For the Minister responsible for this already distressing policy to be saying things that are fundamentally untrue is deeply worrying and distressing. Taking into consideration that HM Treasury has also failed in their impact assessment of the policy, it is shocking. The impact assessment to which the Ministers refer; 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 untrue which we know from our own members – many people have experienced severely traumatic impacts on family stability including relationship and marriage breakdown. Others, as has been reported to HMRC and reported in the press (https://www.standard.co.uk/business/suicide-watch-the-preventable-tax-timebomb-looming-for-freelancers-a3861916.html) have reported having suicidal thoughts as a direct result of the impact of the Loan Charge. Therefore to say it will not have any impact on family stability has already been proved to be wrong.
As we presume you know, The Loan Charge Action Group wrote to HMRC Chief Executive and Permanent Secretary, Jon Thompson outlining the risk of suicides as a result of this policy demanding he set up a 24-hour helpline. This was three weeks ago https://www.hmrcloancharge.info/blog/lcag-letter-to-jon-thompson yet we are still to receive a reply, which is a shocking indictment on HMRC, considering that the acute mental health issues currently suffered by Loan Charge victims has been formally reported to HMRC as well as highlighted in the press. It is deeply disappointing that at Treasury Questions you, yourself, also failed to answer the request directly, or commit to a Suicide Hotline, leaving many contractors without vital mental health support forthe serious crisis they are facing due to the Loan Charge.
LCAG have had to deal with calls from contractors who have only just recently discovered they will be in scope of the Loan Charge and who have reported to us their feelings of worry, helplessness, severe anxiety and mental distress, many also attest to having suicidal thoughts. We simply do not have the resource or skills to deal with this and so we demand that HMRC and HM Treasury accept the impact the Loan Charge is having and act NOW, before it is too late, to assist those in serious distress. Something that, despite claims to the contrary, HMRC are manifestly failing to do.
Overall this is an unfair and profoundly ill-considered policy, the human consequences of which were quite simply not considered or properly assessed and is one that will result in huge damage personally and economically. It will force many contractors to go bankrupt, meaning HMRC collect no tax at all and it also, even more perversely, is preventing some people from taking jobs and hence preventing them being able to pay taxes! Aside from the impact at an individual level, the policy as a whole will do huge damage to the entire contracting sector, with many contractors saying they will consider moving abroad to avoid the disastrous consequences of the Loan Charge, when they would rather remain in the UK and work and pay taxes here!
We urge you to do as Conservative MP Peter Aldous suggested in the House of Commons and revise the policy so that it applies going forward, not retrospectively, thus avoiding these devastating consequences and at the same time clarifying the position and giving certainty to many self-employed people going forward, surely something that a Treasury Minister and team would wish to do.
Yours sincerely,
Steve Packham, Andrew Earnshaw, Richard Horsley
On behalf of the Loan Charge Action Group
cc Speaker of the House of Commons, Rt Hon. John Bercow MP Stephen Lloyd MP Peter Aldous MP