A Lib Dem and former business secretary joins the growing list of MPs who look determined to go against the Loan Charge 2019. The highly-motivated movement has so far managed to displace the number one and two from the government.
The ex-shadow chancellor, Sir Vince Cable, wrote to Sajid Javid, the current chancellor, and objected to the Loan Charge. The Tory MPs Andrew Rosindell and Andrea Jenkyns wrote to the prime minister, Boris Johnson.
In his letter, Sir Vince opposed the government’s intent to tax retrospectively individuals who used employee benefit trust loans, before they were illegal.
Meanwhile, Ms. Jenkyns wrote: “The levy is a retrospective back tax for people who used a loan based scheme which, at the time of being taken out, were both legal and recommended by accounting industry professionals. Therefore, to retrospectively charge 45% on those loan payments which were paid in good faith and under legal assurance is deeply perverse.”
Mr. Rosindell called out for the need for highlighting the legal nature of those loans. He recalled that earlier, HMRC was negligible and did not chase these people for such schemes. Therefore, it has to be established that HMRC made a mistake.
Other prominent names who have written to the government for the suspension of the Loan Charge. These include the Conservative MPs David TC Davies and Esther McVey, and the Labour MP Jim Fitzpatrick.
What makes the letters by Rosindell, Jenkyns, and Cable similar is a specific pattern. The pattern identifies that in the beginning, these loans were legal. Afterward, going against the claims of the HM Treasury, the Budget 2016 featured an announcement after which a crackdown began against these people.
Sir Vince argued that if those arrangements were always illegal, then what made the HMRC create new legislation? On a similar note, he asked that if the tax was liable, what made the HMRC unable to prove it in an enquiry?
Other than unjust retrospection, these letters have also stressed on the massive financial effect of this backdating on people.
Mr. Rosindell was disappointed by HMRC’s attitude, mainly how they went ahead with their demands. He explained that they ordered the affected people to pay their entire charge in the 2019/2020 year, making it a lump sum. Since the majority of the affected people are self-employed, therefore they have don’t have a lot of reliable income sources to lean onto for help.