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In the Budget, the Treasury confirmed that the new review would ‘help bring the matter to a close for those affected whilst ensuring fairness for all taxpayers’.
Further details about the review will be set out ‘in due course’ by the Exchequer secretary at the Treasury, James Murray, who is responsible for tax compliance and HMRC.
In the announcement, the government stated: ‘HMRC will consider what updates need to be made to relevant guidance once the government announces further details about the review and once the review has concluded.
‘The loan charge legislation remains in force. If you have agreed a payment plan with HMRC you should continue to pay the amounts you have agreed to pay while the review is ongoing.’
A second review will be welcome news for the estimated 40,000 contractors affected by the loan charge, which has resulted in tax bills for historic disguised remuneration contracts, where HMRC claimed that the self employed individuals had not paid the correct tax and national insurance on disguised remuneration contracts.
The Loan Charge & Taxpayer Fairness APPG, representing MPs, said: ‘This is very positive news and something the APPG has been consistently calling for. The review must be genuinely independent and must look at the whole loan charge scandal.’
This has been a very tortured, long running issue with combative parliamentary committee hearings between MPs and HMRC officials over the legitimacy of the loan charge. At a feisty hearing at the Treasury Committee in March, HMRC boss Jim Harra rejected MPs’ assertions that HMRC’s approach was ‘heavy-handed’ and that it ‘operated without scrutiny’, all accusations absolutely denied by the tax authority.
In August the High Court ruled that the loan charge did not break EU law and the Labeikis claim against validity of loan charge was dismissed.
A search of Business & Accountancy Daily archives shows the ‘broken record’ nature of the issue with reports on endless calls for reviews, investigations and long delays to the findings of reports, including the initial Morse report itself which was interminably delayed.
Tragically, there have also been a number of suicides by individuals affected by the loan charge which has added to the pressure on MPs to take action against the perceived unfairness of the rules.
Now all eyes will be on the Treasury for details on the second independent review, the timescale and the choice for the appointment of a chair.
Here are some memorable articles on the loan charge giving a timeline over recent years:
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