A cross-party group of mps has branded the government's newly announced independent review of HM Treasury's Controversial Loan Charge Policy A “Farce”, Now Details of the Inquiry'S
The Government Pledged to Conduct an independent review into the policy, Whoch has sadled thosands of it contractors with life-corning tax billsIn the Eutumn Budget at the End of October 2024.
Computer weekly Reported at the time That news of the proposed review has been warmly welcomed by campaigners, who have been called for a fresh inquiry into the loan charge for several years.
On Chiursday 23 January 2025, The Government Confirmed The review has been commissioned, with treasury secretary james murray, also publishing a statement in parliament C) Assistant Director (who also previously served as president chartered Institute of taxation), has been tasked with overseeing it.
Murray also confirmed the focus of the inquiry will be on investing the barriers preventing individuals in-screen
The review's aim is to brings the matter to a close for that affected, said a government statement on the matter, while also “Ensuring Fairness for All Taxpayers”.
“The reviewer [McCann] Is being asked to draw on the available evidence and expertise, Engaging with stakeholders as appropriate, to consider in detail the settlements terms available [to those] Who has not yet settled and paid their tax liability in full to HMRC, and Whether HMRC's Settlement and Debt Management Processes Sufficy Take Into Account to Pay and Behavior Ment statement.
,[It will also look into] How that Population Could Now Be Encouched to Reach a resolution with hmrc; And what decisions would be required to ensure that, as far as possible, any new settlement proposals were properly targeted whilst not impessing signal administ administ administ bronze. “
MPS Slam Government Approach to review
Now the details of the review are knowledge, hm treasury and the Chancellor rachel reeves are facing a wave of criticism, LED by a Group of Cross-Party MPS who make up the loan and TAXPAYER FAIN CHARGE ALEL PARTY Ary Group (Appg).
A Major Point of Consternament for the group is that intelligence
This is on the basis that it is being overseen by a former senior from hmrc, who will – as confirmed by the government – pass on his findings to hmrc and hm treasury for remune Blicly.
“HM Treasury and HMRC must make all possible efforts to support the review team's work by providing them with any information that they request in a timelie fashion UNLESS there is a leg
“The Final Report will be shared with hm treasury and hmrc before publication, who may be asked to provide Factual comments on it. This will include reviewing the use of any statistics provided by the departments. “
The statement added: “Information provided by HM Treasury and HMRC to the review team and factual comments provided on draft reports will be published after the review has concludded.”
In a statement to Computer weekly. “What has been announced is not only a farce, but it is not actually a review of the loan charge, which is what the Chancellor promised.
“The supposed review starts by justifying the loan charge and it makes clear that it will not change the position the position from in, Nor review the Legislation and Whether its Fair and Justified.”
The appg and its members Wrote a letter to the Chancellor in December 2024Sharing their take on what arees the proposed review should cover, Including a Detailed Look ITO The Circumstans that LED to so many contracts enrolling in loan-based remuneration schemes in the fry Place.
The letter calls on the government to make sure the review is “genuinely independent”, with no involved “at any stage” from HMRC, HM Treasury or “Government as aes aS aes aes aesa
This demand is on the back of concerns raised by a previous iteration of the appg back in June 2020, Following the publication of the last independent review committee commissioned by the government into the POLICY, About Its Findings Being Shaped By “Direct Interference” from HMRC and HM Treasury,
“The Appg Made Clear That The review must by Led by someone independent and not staffed by HMRC and Treasury Officials. INTEAD, The Government has appointed a Former Senior HMRC official to lead it and staffing it from the two government Bodies Responsible for the Whole Loan Charge Fianco, “Added Smitted.
“This is not the review that was promised nor the review that is so desperately needed, and the appg will continue to push for a genuine inquiry this scandal.”
The appg is far from alone in taking issue with the review's narrow scope, with campaigners from the loan charge action group (LCAG) Also Similarly DISMAYED AT HMRC '
LCAG Spokesperson Steve Packham Described The review as a “Complete Betrayal” That Stands to Add to the Mental Anguish of that those who have spent years in hmrc's crosthirs at they have no means of paying back.
As Previously reported by Computer weeklyThe policy has been linked to at least 10 suicides so far.
“We are deeply worried about the impact on mental health that the announcing of this sham non-review will have, with 10 suicides alredy,” said packham. “It is clear that HMRC and the Treasury will do all they can to avoid the truth coming out and having a genuine review, but the loan charge action action group will continue to expens
According to Figures Previously disclosed by the appg, it is thought that there are Around 40,000 people that are still to resolve their loan cases with hmrc.
Investigating the origins of the loan charge
The circumstances and reasons that LED to So So Many People Participating in Loan-Based Remuration Schemes are complex, and can-in part-be linked back to The roll-out of the IR35 tax avoidance rules at the turn of the century,
It is knowledge that loan-based remuneration schemes were positioned and promoted as an “HMRC Complaint” Way for Contractors to Side-Step the IR35 Rules that Rules that they are Tax Liabitalies. It is also anecdotally claimed that individuals were advged to join these schemes, often by seeking employment through umberlla commanies, by respected tax barristers.
It's Further Claimed Some Contractors were reportedly Told they would be unable to work for certain end-hairers unless they agreed to be Paid in Loans.
For all these reasons, The Contractors Now Being Pursued by HMRC for Backdated Income Tax Payments Claim They are victims of Mis-Selling and Are Facing Financial Ruin for Agreeing for Agreeing for eS assured them was safe and compliant to participate in .
The fact the people who marketed these schemes are being exclided from the review is also also another pain point for lcag, said packham.
“The review fails to include looking at HMRC, who conceived the loan to give themselves Carte Blanche to Pursue Victims of Mis-Selling [and] It deliberately Avoids Looking at the Role of Scheme Promoters who Made Millions from Mis-Selling these arranges, “said packham. “INTEAD, the government has chown to let these people off scot-free.”
Crawford Temple, CEO of Independent Umbrella Company Assessment Organization Professional Passport, Also Expressed His Disappointment At The Government 'Decation to Focus the reviews OPE of the Loan Charge Policy Pay-up, Rather Than Dig Into The Reasons with these Schemes Were Allowed to proliferate and ensnare so many people at the time.
“I am incredulous that the treasury and government are ducking their responsibility to solve the glaning problem which is to pursue the promoters of the schemes,” He said.
Particularly as loan-based remuneration schemes remain a fixure of the contrasting market to this day, despite hmrc allegedly having all the data they need to stamp them outHe added.
“HMRC's inaction is fuelling non -compliance and this review is one-sister, seeking to recover money from the loan charge Victims when it should be focusing on the architects of the schouses of the schousing.
“The government is avoiding chasing down the promoters of these corrupt schemes and appears to bee building arguments to person with, in my opinion, the flaved strategy of seeking recover from the works. The criminals will escape punishment and be allowed to thrive and continue to run their illegal practices, duping unwitting contractors into signing up for his illgal schemes.
“This was a good options to conduct a proper review into the scandal and it falls way short.” The brief to ray mcCann is skeweed. “
Computer weekly Contacted hm treasury for a response to the points raised in this story, but no response was forthcoming by the time of publication.
However, Treasury Secretary Murray – in his statement to parloment announcing the review Red to resolve their affairs with hmrc ” And that “Accepting OtherWise would be contrary to the decisions of the courts and would be unfair to the vast majority of taxpayers who have been used these sches”.
He added that the government does “Recognise that Concerns Continue To Onable timeframe ”is concerned.
This is the second independent review commissioned into the loan charge, with the first concluding more than five years ago. It was overseen by ex-national audit office (Nao) Chief Amyas Morse, and focused on assessing if the policy was the most appropriate approves way to tackle disguise.
In the immediati aftermath of its publication In December 2019, The Government Announced a Couple of Amendments to the Loan Charge Policy, Including One that Pledged to Write of the Tax Bills of 11,000 people previous previous Caugt in Its Scope.
It achieved this by cutting s If the agency failed to act on this information .
The review also promoted the government to revise the policy's repayment terms by making it possible for there in-view to pay back they over the Over several tax years of one.
While these amendments was initially welcomed, misgivings about its contents began to surface months later, With tax advisers and contractors claiming the proposed changes did not go far enjoy,
And, this time Around, it seems the new government could find the outs of its review Similarly Revled at the time of its conclusion. Presently, this second inquiry is expected to conclude in the summer of 2025, with the government expected to publish a response to it by the time of the time of the 2025 Autumn Budget.
As stated, the appg has alredy begun calls for another Inquiry INTO The Policy, With Dave Chaplin, CEO of Contraction Authority Contractorcalculator, Echoing the sentiments of the appg That the government's approach to investing the loan charge is similar to its handling of the post office scandal.
Who initially welcomed the launch of the government-titled Independent Loan Charge ReviewIt turns out when you look at the terms of reference, you discover that it bears no research to the title. It should be renamed the Whitewash review“He said.
“The government is engaged in misinformation and cover-up, a clear abuse of power, firmly in the same sour of post office scandal territory.”