The Loan Charge APPG publishes its damning report into HMRC

WTT congratulates LCAG and its supporters in having a major part to play in the APPG report that came out today. A copy of which can be found here.

The report from the cross party MP group led by Sir Ed Davey is a stinging indictment of HMRC policy in relation to contractors in general and says that the loan charge is a damaging and retrospective raid on that expert group of taxpayers that should be delayed and reviewed, independently.

It goes on to claim that HMRC has breached the Civil Service Code and is guilty of running a cynical campaign of misinformation in which they have been supported and encouraged by HM Treasury.

It is impossible to find a tax issues in the last two generations which has caused such a fierce and relentlessly negative report from the law making body of the UK. 

WTT firmly welcomes the report on several levels.

Firstly, it puts into very clear words the dogma from HMRC and HM Treasury that we have encountered over the last 4 years and identifies the root causes of that policy, i.e. a desire to hide the fact that despite having ample information, time and resource, HMRC failed to do its job.

Secondly, the consequence of deciding on that policy is a need to produce a “cynical campaign of misinformation” to support it. The truth of the matter is that many contractors were fooled into thinking that their arrangements were honest and above board. That is inconvenient for HMRC who want to punish them as so has been buried in a manipulation of statistics and information.

Thirdly, the report goes beyond pointing out the many failures that have led us to this place and identifies a number or practical, sensible and fair ways to end this sorry episode. These are ways in which all parties can walk away wiser and wealthier in knowledge or hard cash. A simple 10% tax on loans saves litigation costs and heartache and ends years of stress and starts the recovery process for thousands of contractors. This is a plan first proposed by WTT to the House of Lords last year and we remain strong supporters.

Fourthly, it points the way to a comprehensive review of HMRC actions and motives for the campaign that must be the starting point for all future policy matters. We see IR35 reforms arriving in less than a year and the sort of independent review proposed by the report would be of immense practical use in considering how that reform should be dealt with.

WTT is sure that over the coming weeks, the report will be picked up and be subjected to commentary, most of which will be negative towards HMRC and its overseers. That is to be expected given the present febrile political climate but we urge all parties to see this publication as a route map to a better way of doing things and an opportunity, even at this late stage, to alter course and produce a fair settlement.

To all our clients;

We will shortly be in touch, but his report is a seminal moment. It goes beyond the loan charge and discusses not only a fair and simple means to end the present dispute, but also a start on the path to rebuilding trust with HMRC. Whilst it would be sensible and reasonable for the present leadership in HMRC to step aside and allow others to move the agency forward, they can do so only with the good will and tacit approval of taxpayers.

This report MUST be brought to the attention of YOUR MP, now.