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Frances Ball 12 Sep 2019 02:39pm

Scope of loan charge review too narrow, says APPG

An all-party parliamentary group (APPG) has welcomed the Treasury’s announcement that it will review the loan charge, but has expressed concerns over its proposed terms

The officers of the loan charge APPG, or the five MPs tasked with scrutinising the Treasury’s review, have pointed out the limitations of the review as it stands.

“Unlike the whitewash Treasury report,” the APPG has said in a statement, the review “could recommend changes (legislative changes) to the loan charge.” The government must also now agree to implement those recommendations, the group says.

One of the APPG’s major concerns is that while the proposed review focuses on the charge itself, it does not cover the wider issue of whether it “undermines the rule of law by imposing HMRC’s opinions of the operation of various tax legislation,” as the group explains.

Instead, the review must look at HMRC’s conduct around the charge as well as the charge itself, the APPG says.

At present, settlements are on hold until the review concludes. However, taxpayers face deciding now whether or not they will settle: if they do, they won’t have to complete an additional disclosure by the September deadline, but if they don’t, they will have to complete one.

The APPG has accused the Treasury of putting taxpayers who are unsure of whether or not they will settle in “limbo”, in a “contradictory and unfair” move.

The group’s concern is that the charge is not being suspended “as clearly as it should be” – arguing that the charge itself should be postponed.

It must also be “genuinely independent” of the Treasury and of HMRC, the group had already advised the chancellor in a letter written when the review was announced. The review must also take evidence from those who face the loan charge, they said.

Now, the group is concerned that “these three simple, fundamental points” have not been fulfilled.

The review will be chaired by Sir Amyas Morse, who the APPG welcomed as genuinely independent. Their concern is with the staffing of the review, which is made up of staff from the Treasury and HMRC and is in their view “wholly inappropriate.”

Instead, they recommend, Sir Amyas should choose the review staff, but none should be from the Treasury. While HMRC should supply its view, it should have no other role in the proceedings, the APPG says.

The group has written to the chancellor, the prime minister, and to Sir Amyas outlining all of their concerns – it will “continue to press for them”, it says.

Sir Ed Davey MP, who chairs the loan charge APPG, said, “Finally the government has done the right thing and announced a review, to be led by Sir Amyas Morse, which must now be a properly independent, genuine review to examine all aspects of the Loan Charge Scandal.

“We welcome Sir Amyas’ appointment and believe he will seek to carry out a proper and independent review. The Loan Charge APPG are concerned, however, as to how independent it will actually be, so we are writing to Sir Amyas and the Prime Minister demanding that there is no Treasury or HMRC involvement beyond them supplying evidence, otherwise it will neither command confidence nor resolve the serious issues around this deeply controversial policy.

“The review also must be evidence based with those facing the Loan Charge and sector professionals asked to give evidence and we will be sending Sir Amyas the hundreds of case studies that we have, to ensure this happens”.

Ruth Cadbury MP, the APPG vice-chair, also commented that, “Sir Amyas Morse must be permitted to appoint his own staff or people will not believe this isn’t another tightly controlled stitch-up.”

The APPG is joined by the Loan Charge Action Group (LCAG), a group of campaigners against the charge, in their calls for the review to change.

Steve Packham, the LCAG’s spokesman, said, “Many vulnerable people are placing their hopes on some long overdue genuine scrutiny of the whole Loan Charge scandal, so this must be done properly, independently and thoroughly and Sir Amyas Morse must be allowed to do such a review independent of the Treasury and HMRC, both of whom are up to their necks in the Loan Charge Scandal.”

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