Raymond Doherty 2 Jul 2019 10:58am

PM candidates back loan charge inquiry

Both remaining Conservative party leadership hopefuls Boris Johnson and Jeremy Hunt have promised a review of the controversial HMRC policy

At a hustings event yesterday, Johnson said of those affected by the loan charge, “It seems superficially unjust that they should be retrospectively pursued. They need an independent review.”

Hunt said he would look at the loan charge, adding, “if an independent inquiry is what’s needed, I’ll do that”, according to a report from the Yorkshire Post.

The controversial loan charge came into effect on 6 April and applies to anyone who used so-called disguised remuneration schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, some of them dating back to 20 years ago, unless the individual had agreed with HMRC to settle their tax affairs by midnight on 5 April.

However, many of the 50,000 people caught up in the issue are low paid people, such as nurses and social workers, who were persuaded by their employers to join the schemes. Many of them are facing bankruptcy and one person has committed suicide as a direct result. Yet, at the time the schemes were set up, HMRC did not question their legitimacy.

A number of MPs took up their cause but pleas to defer the loan charge introduction until an independent review had been held fell on deaf ears. A Treasury review of the campaign confirmed that the government would be sticking to its guns and implementing the charge on schedule.

Last week a group of MPs – David Davis, Dame Caroline Spelman, Ross Thomson, Bob Neill, Philip Davies, Chris Green, Adam Holloway, Andrew Selous, Richard Benyon, all members and supporters of the All-Party Parliamentary Loan Charge Group – wrote to both of the candidates asking them to agree to suspend the charge, to commission an independent review and to remove the retrospective element.