Soon, contractors are expected to see the results of their local MP’s voting on the amendment pertaining to the Finance Bill. The amendment demands a review of the Loan Charge 2019.
The consideration for the amendment was proposed by Sir Edward Davey as it is submitted in its final stages, before the royal approval. It is expected that the amendment may pressurise the Treasury to assess the impact of the updates which were added in the bill’s Sections 79/80.
Contractors are being encouraged by the lobbyists from the LCAG (Loan Charge Action Group) to persuade their MPs to support the amendment through their votes. LCAG believes that if a consensus is reached on the amendment, then it can compel the Treasury to evaluate the “unfair” charge. Subsequently, by the 30th of March, 2019, the chancellor would be required to issue a report.
Mel Stride—the financial secretary of the Treasury—divulged to MPs that “arrangements that were entered into around disguised remuneration were always defective”. With that statement, Mr. Stride publicly announced his intention about the amendment NC26. Some analysts believe that his choice of words reflects a softened stance from the Treasury.
The key word here is ‘defective’ which is noticeably different than the Treasury and HMRC’s ‘tax avoidance and evasion’ eloquence. The LCAG stated that earlier, this rhetoric was used to justify their aggressive crackdown for those contract workers who were affected by the loopholes of this tax legislation.
Interestingly, the LCAG noticed that these comments have emerged in the aftermath of two suicides where both the deceased are alleged to have been dealing with loan charge issues. Reportedly, before committing the act, one of them specifically pointed toward the 2019 tax.
The LCAG’s spokesman Richard Horsley said that “Thirty-nine per cent said [to us in a survey we conducted] they had experienced thoughts of suicide or self-harm as a result of the Loan Charge. Yet so far HMRC and the Treasury have refused even to set up a hotline for those in distress, despite the House of Lords Committee report recommending this.”
The Lords—who are expected to review the NC26 when it is added in the bill—stated that the charge must be discussed and amended amid the reports of “disturbing evidence” coming from the approach of the government with NC26 as the attitude towards taxpayers worsens.
Horsley referenced this attitude and explained that in the Christmas period, HMRC begun to initiate bankruptcy proceedings to target loan charge contractors. In one of those instances, a taxpayer had only 18 days to come up with £153,000 to fulfil a tax demand.