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Keith Gordon, a prominent tax barrister, wrote to Mel Stride—the Financial Secretary—and expressed reservations regarding the Loan Charge, particularly irregularities pertaining to its legal principles, while being critical of HMRC’s incompetence.

Gordon explained that regardless of the current stance of 100 MPs on the matter, he believes that the legislation was conceptualized to dismantle balance and fairness. Moreover, he expressed a complete lack of trust in the HMRC and casted doubts on the reliability of their statements despite their stature as a public entity.

According to him, the Loan Charge does not actually address illegal arrangements contrary to the Treasury and HMRC’s claims. He pointed out how the HMRC failed to be compliant with legal aspects during the Loan Charge’s formation.

Gordon remarked that the HMRC failed in the past, and it has now constructed a system which allows it to have another go as taxpayers were not communicated properly. Despite the fact that the taxpayers are not to be blamed, the HMCR intends to reprimand them for retrospective cases.

Considering the legislation’s actual damage, it was not out of the blue that HMRC attempted to re-shape the reality according to their preference and justified their operations. Gordon remarked that the Government and Treasury continue to ignore the misrepresentations by HMRC. He pointed out that Philip Hammond, the Chancellor of the Exchequer, and Mel Stride misstated the schemes with words like “evasion” and “unlawful.”

Consequently, contractors witnessed the Chancellor on TV read from his briefing notes and call these schemes as “illegal tax avoidance”, though he was quick to take back his statement afterwards. If the HMRC supplied those briefing notes, then Gordon maintains that it is just one of the examples of their misrepresentation antics through which they did not convey the truth to the Treasury. Some of these antics are the following.

  • Going by the barrister’s detailed analysis, the HMRC’s explanations to justify the legislation do not carry much weight.
  • According to the evidences, officials from the HMRC tried to divert the questions during the session with Parliamentary Committees.
  • The sudden shift in strategy by the HMRC to aggressively defend the legislation as the Finance Bill’s Report Stage is only a few days away.

To sum it all up, Gordon ended his review by requesting the Government to contact independent parties for consultation on policies, especially when a lot of them have already opposed the retrospective part of the Loan Charge.

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