LCAG Press Release 17th September 2018

Treasury’s retrospective tax grab is “outrageous” and “a political crisis in the making” says leading broadcaster and former Conservative candidate. Leading political broadcaster and former Conservative candidate Iain Dale has slammed the Loan Charge 2019 as “outrageous” and has said it is “a political crisis in the making” following an explosive interview with the Treasury Minister behind the policy, Mel Stride MP, on his Cross Question show on LBC radio on Wednesday 12th September.

Iain Dale asked some of the questions that so far Mel Stride, the Treasury and HMRC have refused to answer and was strongly critical of the Loan Charge and its implementation including the fact it is retrospective and unfairly pursuing people for arrangements going back twenty years that HMRC never challenged at the time. https://www.iaindale.com/articles/how-can-hmrc-defend-retrospective-taxation-going-back-20-years.

Iain, who previously stood for the Conservatives at the 2005 General Election, was strongly critical of the policy and made it clear he felt that such a measure could be brought in going forward, but not retrospectively. He also asked Mel Stride whether he would set up a helpline for those facing anxiety as a result of the Loan Charge. Mel Stride, The Treasury and HMRC are aware of people experiencing suicidal thoughts yet so far have refused to set up a helpline to take their calls and assist https://www.hmrcloancharge.info/news/contractor_group_demands_24_hour_mental_health_hotline/.

Mel Stride ignored the request for a helpline, as he did when Stephen Lloyd MP asked him this in the House of Commons and on this occasion disgracefully suggested that such desperate people contact HMRC to settle their tax affairs! 86 MPs have now signed a Parliamentary Motion opposing the Loan Charge and echoing Iain Dale’s call that it is introduced going forward and the unfair retrospective element is dropped.

Iain Dale commented:

“Thousands of self-employed people are being harassed by HMRC for thousands of pounds – in many cases tens of thousands of pounds. They took part in various HMRC approved schemes, which all of a sudden HMRC announced were illegal, despite having previously given them their blessing.

“So these people are being chased for back taxes for the last twenty years. This is affecting nurses, doctors, IT contractors and many other people too. These are not rich people. They are ordinary hard-working people whom through no fault of their own, have been caught up in something which should never have been allowed to happen.

“From what I know of the subject I cannot see how it is possible to defend HMRC’s action with any degree of logic. Fine, if there was an issue, introduce legislation to solve it, and ensure that people in future understand what the law is. But to penalise people for taking part in schemes which HMRC approved of and then try to claim back taxes over twenty years, well, I can’t see how a Conservative minister can defend that.

“Campaigners say there are people on the verge of taking their own lives as a result of this because there is no way they will be able to find the money. There are people who might lose their houses.

“This is a political crisis in the making. If I were Philip Hammond or Mel Stride I’d make sure my case was absolutely watertight, because if they have got this wrong, the consequences could be appalling”.

Richard Horsley, Spokesperson for LCAG said:

“Having spent the last year ducking proper scrutiny over the ill-considered and disastrous Loan Charge, it is wonderful that a journalist has finally put Mel Stride on the spot and made clear the draconian reality of the Loan Charge and the devastating impact it will have on hardworking people and their families. Iain Dale is absolutely right that whatever Mel Stride tries to claim, the Loan Charge is very clearly a retrospective tax grab and it’s time Mr Stride listened to the many MPs who have called for this to be dropped.

“It is shameful that yet again Mr Stride ignored a plea to set up a helpline for desperate people facing life-changing losses and serious anxiety as a result of his policy and instead disgracefully just called on these people to settle with HMRC, when pursuit by HMRC has led them to the desperate position they are in.

“Loan Charge victims are very grateful to Iain Dale for finally putting Mel Stride and the Loan Charge under the spotlight. We have had enough of the misleading spin that has up to now allowed the actions of the Treasury and HMRC to go unchallenged. Now more and more people are waking up to the truth, that HMRC are out of control and the Treasury are hellbent on unfairly destroying the lives of thousands of hardworking people through a retrospective law. It’s time that Conservative MPs and party members told Mr Stride to stop his assault on hardworking people or, as Iain Dale says, ‘the consequences could be appalling’”.

Notes to Editors

Media Contact: Mark Sebright – marks@imagenuk.com / 07988 680746

  1. About the Loan Charge Action Group: The Loan Charge Action Group seeks to raise awareness and reform of the retrospective IR35 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. Visit www.hmrcloancharge.info

 

  1. 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 a loan scheme structure will be hit with a retrospective charge in the 2018-19 tax year.

 

  1. LCAG surveyed >500 of its members about the impact of the Loan Charge and the following were the responses as to how if was affecting people:

 

Bankruptcy:                                                                            71%

Depression / Anxiety / Mental health impact:                      68%

Loss of residence/ home:                                                      49%

Divorce/ Relationship breakdown:                                        31%

Loss of career:                                                                       30%

Suicidal thoughts/ self-harm:                                               39%

 

  1. The House of Commons Early Day Motion states: “This House recognises that the (Loan) 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”.