Today in the House of Commons, Ed Davey, as one of the proposers of a motion on backbench business day, will call on the Government to suspend enforcement of the 2019 Loan Charge.
HMRC is currently pursuing people who, as contractors years ago, took part in perfectly legal schemes whereby they took their salary as loans from a company and therefore paid a lower rate of tax. They now face bills for arrears of tax out of the blue. In some cases, it could be hundreds of thousands of pounds. These aren’t super rich people and what they were doing was absolutely transparent and above board at the time. They are now being pursued for tax in a way that they never expected.
Closing a loophole is one thing. Making it retrospective is another.
The motion for debate today says:
That this House expresses its serious concern at the 2019 Loan Charge which applies from 5 April 2019; expresses deep concern and regret about the effect of the mental and emotional impact on people facing the Loan Charge; is further concerned about suicides of people facing the Loan Charge and the identified suicide risk, which was reported to HMRC; believes that the Loan Charge is fundamentally unfair and undermines the principle of the rule of law by overriding statutory taxpayer protections; expresses disappointment at the lack of notice served by HMRC and the delays in communication with those now facing the Loan Charge, which has further increased anxiety of individuals and families; is concerned about the nature and accuracy of the information circulated by HMRC with regard to the Loan Charge; further regrets the inadequate impact assessment originally conducted; understands that many individuals have received miscalculated settlement information; calls for an immediate suspension of the Loan Charge for a period of six months and for all related settlements to be put on hold; and further calls for an independent inquiry into the Loan Charge to be conducted by a party that is not connected with either the Government or HMRC.
Ed has been at the forefront of trying to get the Government to think again and is chair of an All Party Parliamentary Group on the issue.
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