Jeremy Hunt and Boris Johnson have offered respite to contractors who were affected by DR (disguised remuneration) schemes as they pledged to proceed with the Loan Charge 2019’s independent review.
Mr. Hunt appeared in the recent hustings of the Tory leadership—LBC’s Ian Dale chaired them—and opined that “if an independent inquiry” into the charge “is what’s needed, I’ll do that.”
Mr. Dale referred to the retrospective nature of the charge as “incredibly unfair”, a view on which the Foreign Secretary agreed, although, after that, he sounded tentative. He refused to take a decision on the matter on the spot. He added that it was necessary to go into the details but they also needed to assess the matter with sympathy for the loan charge contractors.
The question regarding the April tax was then forwarded to Mr. Johnson—his brother Jo Johnson MP is against the charge—who had a similar stance although it was not as much as conditional as Mr. Hunt’s.
Mr. Johnson was initially critical as he criticised the behaviour of these individuals who were exploiting the system as they treated income as a loan to minimise their taxes.
However, then he shifted his tone and said that it should be taken into account that these individuals were not only encouraged to do these things but they were also taught that they were legally on the right side. Thus, Mr. Johnson finds it ‘superficially unjust’ that these individuals are retrospectively pursued when they were led into believing that it was a valid legal option.
He went on to emphasise that it is necessary that the Loan Charge goes through an independent review. It is important to note that unlike Mr. Hunt, Mr. Johnson did not use the caveat ‘if needed’.
According to London’s former Mayor “I think the real culprits in this matter, if I may say so, are perhaps not so much the individuals themselves who have decided to…use the loan charge as a way of minimising their tax exposure, it’s the people who advised them that that was the sensible thing to do. In my view, we should find a way to go after them”.
Meanwhile, the LCAG, a group that backs the affected contractors is repeatedly calling to suspend the charge so an independent review takes place, wrote on the social media:
“Great to hear both [the] Tory leadership candidates Jeremy Hunt and Boris Johnson support an independent review into the grossly retrospective loan charge. The loan charge must now be paused while a full, transparent, and independent review is carried out.”