We have been contacted a lot about the very contentious loan charge. Many people affected state that the whole process is corrupt, although we have not been supplied with any specific details of corruption. However, we do not dismiss these claims out of hand so, as a compromise, have agree to publish the summary below received by email. At present the author of the email wishes to remain anonymous. It has served as a good introduction to us, and no doubt will to others not familiar with the matter.
As the comments are open on this post, no doubt many more submissions will be made, hopefully with some detailed and cogent evidence of corruption if that is indeed, what took place.
“I have not found compiling this message an easy task – nor should it be one. When faced with events which are likely to alter the course of one’s life, inevitably for the worse, there is an immediate and oppressive weight which hangs heavy and ominously overhead. It is evident from all I have read on your site that your own personal battle with corruption has been long, hard and painfully slow. The intimate detail and knowledge which is accrued by an individual over such lengthy periods is virtually impossible to articulate and convey in a manner which is able to sufficiently outline the complex legalities or endless nuances of that particular fight in one neatly-worded set of paragraphs. To truly understand another’s situation and the plight they have faced along the way takes time none of us tend to have or sometimes even wish to give – it thus becomes more about the arousal of attention and the piquing of curiosity and interest of those whom remain unaffected by the subject. Hence, this hopeful attempt – it will undoubtedly not be as alluring as reading an opening line like ‘It was a bright cold day in April, and the clocks were striking thirteen’, but it is borne of the same impotent rage as you yourself have voiced, against something that has been continuously covered up to save careers, deflect blame and conceal corruption. I take a respectful comfort from the last line of your panel profile entry – ‘he is not easily intimidated’. I assure you I share that stance.
This submission is about the retrospective tax known as the Loan Charge. I can see that you have already been made aware of the subject via Twitter and have added a related entry on the site home page. That same page describes corruption as (amongst others) ‘dishonest or fraudulent conduct by those in power’. We have a wealth of evidence at our disposal which proves beyond any doubt that those responsible for this pernicious policy have used a constant, state-sponsored stream of lies and misinformation (and to quote a respected tax barrister from Temple Tax Chambers in London) ‘to drive a coach and horses through taxpayer protections and remove the balance of fairness in the tax system’.
Briefly, and in summary, the retrospective Loan Charge was contrived by senior HMRC and HMT officials to cover up decades of inaction and inertia by the former. After the introduction of IR35 (the Off-Payroll Rules) and the chaos and uncertainty this created in the contract and freelancing sectors, the accountancy industry looked at (perfectly legal, as they remain to this day) methods of payment which were fully compliant with tax law and made them widely available as an alternative to mitigate any unnecessary exposure to the flawed IR35 legislation. This resulted in hundreds of thousands of individuals, most on advice from CIOT (Chartered Institute of Taxation) and ICAEW (Institute of Chartered Accountants in England & Wales) members, and even on some occasions as a compulsory requirement of engagement, using those frameworks and arrangements as a legal, compliant method of receiving payment for their work.
In November 2017, the Loan Charge (via the Finance (No.2) Act 2017) received Royal Assent. It had been sneaked through Parliament by the responsible minister at the time (Mel Stride, who was then FST) by deliberately ignoring the 90% of respondents who had been formally consulted on the policy and had vehemently disagreed with both approach and objective. He refused to allow oral testimony and evidence from professional bodies and tax advisors, and denied those on the relevant committee any time to digest, debate or challenge the contents of the Bill. All of this can be appropriately evidenced.
As the impact of this legislation began to be further understood by those targeted and the wider tax profession, MPs were contacted en masse to provide representation to affected constituents and to initiate challenge in Parliament. The Loan Charge was raised in both the House of Commons and the House of Lords on numerous occasions, and senior HMRC officials were called to answer questions at Treasury Select Committee and Economic Affairs Committee hearings – and these attendees provided misleading, inaccurate statements, details and statistics to members of those committees, which clearly break those codes of conduct within the Civil Service. All of this can be appropriately evidenced.
Both the previous FST (Mel Stride) and the current (Jesse Norman) have consistently made erroneous and misleading statements to Parliament in an attempt to dupe MPs intent on resisting this ill-conceived policy. This has been exacerbated by a litany of entirely false statements from HMT in support of those ministers, determined to drive the policy forward despite increasing opposition from MPs. An All-Party Parliamentary Group (APPG) was formed to co-ordinate action and information by those MPs – and which is still extant within Parliament, with a current tally of 234 members (the second largest APPG in history at the time – an average number of members for an APPG is 10-12). In response to the invidious nature of the policy and its impact on their constituents, the APPG compiled and published a 91-page report in April 2019. This comprehensive challenge to the Loan Charge covered every aspect of the policy, including the misrepresentation of legal cases and tax law by HMRC, the unacceptable and dishonest conduct of senior officials, and the constant misinformation and obfuscation by HMRC and HMT, concluding that the primary reason for the introduction of the Loan Charge was to remove long-established taxpayer rights and protections for those affected, denying them any access to tribunal, court or appeal and effectively condemning them as ‘guilty’ – without any judge in any court ever decreeing it so. All of this can be appropriately evidenced.
As support from MPs increased, the current Prime Minister (during the leadership hustings and prior to taking office) bowed to pressure and committed to an ‘independent’ review should he win the contest. This was published in late December 2019, after the Government a) appointed the ‘independent’ reviewer themselves, despite demands for it to be chaired by a truly independent and knowledgeable tax judge ; b) set a deliberately limited and narrow Terms of Reference and Scope, to thwart the potential for any more extensive recommendations which might possibly emerge ; c) ensured that the review team was exclusively staffed by senior HMRC and HMT employees, which enabled both to lead an uninformed and non-expert appointee reviewer to predetermined conclusions which obviously suited both organisations and the relevant ministers and d) denied any accusation that there was any collusion or collaboration between the parties responsible for the review, despite a subsequent Freedom of Information request which (despite extensively redacted documents being produced by HMRC and HMT) provided stark and immutable proof that this was exactly what had happened, exactly as we said it would. The APPG compiled and published another report at the end of June 2020 providing clear, irrefutable evidence of the collusion and collaboration which the Government immediately denied and ignored. All of this can be appropriately evidenced.
The 234 APPG members and other supportive MPs continued to call for this policy to be reconsidered and their deep concerns to be addressed. The Government, HMT and HMRC, adamant that it would continue to be forced through, pressed on regardless. The minor changes (which HMRC and HMT had conceded post-review to effect a meaningless political ‘compromise’ for PR purposes) were incorporated into the Finance Bill 2019-21, which recently passed through the various stages in Parliament. Supportive MPs had managed, after a supreme effort in meeting the complicated legal requirements of the Clerks responsible for overseeing any further changes to legislation, to table two amendments designed to restore taxpayer rights and return access to the courts (via the Rule of Law) to those affected individuals. To counter this, HMT issued a wholly misleading briefing note designed to give those MPs eligible to vote (a number strategically and conveniently reduced as a result of the Covid-19 restrictions in Parliament) a manifestly false and inaccurate response to those tabled amendments, with the singular intention of dissuading any MP from voting with the proposal, irrespective of merit or virtue. This note was roundly condemned and rebutted by the aforementioned tax barrister from Temple Tax Chambers and his expert response was distributed to APPG MPs prior the debate, but was not seen by all members in time. All of this can be appropriately evidenced.
During the debate in the House of Commons, it became clear to those in attendance that these amendments would not even be granted the chance or opportunity for a vote. The SNP Spokesperson for the Treasury, realising the machinations taking place in the chamber stated “It is disappointing to hear that there may be no vote on New Clause 31, given how many signatories there are to it and the lobbying we have all had. People watching this debate at home will not understand why. Since we are trading FDR quotes, we should note that he said: In politics, nothing happens by accident. If it happens, you can bet it was planned that way”. This followed the revelation, during the debate, that (suddenly, and without forewarning) the Labour Party Front Bench had indicated they would not support this amendment, despite having expressed considerable support previously. We have written scores, if not hundreds of emails to the Labour Party leadership team requesting an explanation – all have been ignored, or received a bland and uninformative template response from a collection of different Parliamentary aides. The APPG officers themselves issued a statement the following day, communicating their immense disappointment at the outcome of the debate, the manner in which the debate was stage-managed and reaffirming their continued opposition and resistance to this retrospective legislation which was (and is) ruining the lives of their constituents. All of this can be appropriately evidenced.
As one lone individual amongst hundreds of thousands facing the Loan Charge, I refer back to the mountainous weight of responsibility I outlined in my opening paragraph and which I so keenly feel in this all-too-brief treatise. Attempting to clearly and accurately summarise and impart what has happened, and continues to happen, to all of us facing this life-changing event is an all-consuming task, prompting a sense of duty and determination not to be cowed by an increasingly powerful executive and its associate bodies. We witness the daily reports and broadcasts that roundly condemn the unacceptable behaviour and actions of this Government and its ministers, yet with such a huge majority they appear ever-more untouchable and unaccountable. The dishonest manner in which this policy has been introduced, the lies and deceit which have accompanied its path through the legislative process and the lack of any appropriate Parliamentary scrutiny could so easily be described as a stain on our democracy, a cliché which seems to resound far too often under this particular administration. We firmly believe that, based on all the available evidence which can be produced, this constitutes clear Governmental corruption against thousands of innocent, law-abiding citizens and needs to be addressed by any means possible – I sincerely hope, and trust, that you might see fit to agree.
More information on the scandal on BBC radio 4 File on 4 40 minute programme.
https://www.bbc.co.uk/programmes/m000nl8h
Shocking how some make millions whilst others lose everything. Government leave their Tory donor friends alone regardless of claims that the promoters are being pursued.
The loan charge is taking away my rights as a tax payer. HMRC are forcing me with a virtual gun to my head to sign away my rights by ‘settling’ an unproven ‘debt’. If I don’t ‘settle’ I will forced to pay an even greater amount. This ‘settlement’ is under contract law so should it ever be overturned as I hope it will be one day, they will still be able to keep/steal my money. This is corruption.
Hi there, I briefly contacted you before and I understand you are not campaigners, you deal in evidence of corruption.
I am involved in the loan charge scandal and when I first learned of the issue in jan 19 a peculiar event occurred which looking back, is extraordinary.
The biggest promoter (and benefactor) of loan schemes was AML in the Isle of Mann, these were my accountants from 09-15. I first learned of my exposure to this issue from them, they emailed me and told me to contact PTS tax who would help me sort it out. I paid PTS 2k for essentially nothing. When I found out PTS tax were nothing more than an arm of AML profiting now from stupid people like me I simply sacked them, got a proper accountant in England and wrote off the matter. However, something came up in that time that I believe warrants investigation.
In an email exchange which I still have, PTS told me they were allegedly holding ‘settlement meetings’ with HMRC. I was astounded, HMRC meeting with an isle of Mann accountant, with an address that appears to be in the same building as AML (a massive loan scheme promoter) when they wont speak to, or advance settlement with anyone else that I know of? So I pay PTS 2k and I get a settlement meeting???? Does anyone else get meetings or proper communication from them?? Of course this may be untrue but PTS told me these meetings were taking place which I find absolutely mind blowing considering AML have simply washed their hands of this matter entirely. I still have these emails.
PTS also had prior knowledge of some kind of loan charge delay which I couldn’t find anywhere in any media. This should be looked into immediately
PTS informed me that there was a director level resource that had been going through Smartpay. When I contacted them about settlement, I was pushed to Vanquish option and informed that the loans were now written off. I eventually went back PTS for help and they tried to state they had nothing to do with the AML structure and were a separate company.
All of this is good reading and helps to cement the wrong doing of the system regarding the Lian charge scandal.
But what can be done? With Maps fighting a loosing course, where they gave been ignored by HMRC, what chance has anyone else to fight this awful miscarriage of justice.
I would like to know, why the law, lawyers have not taken this to the courts. This is where it should be aired and the only avenue that can fight this unlawful situation.
Is this another cover up!
Let’s not forget that these people were using highly efficient tax loans (with no intention of paying the money back) so they didn’t pay as much tax. Spades a spade
to address your comment – firstly if they are not genuine loans as you state, why is HMRC looking to levy IHT to unwind the loans as part of the settlement? and secondly, if they are not genuine loans, how are the trustees now recalling the loans in large numbers?
There is a ‘family’ of companies affiliated to the ‘Knox’ group who have been responsible for the introduction and promotion of those arrangements and payment mechanisms over many years which are now being (retrospectively) categorised as ‘not working’ by the aforementioned governmental bodies. These include (but are not limited to) Knox House Trust, Knox Private Office, Knox House Trustees Ltd, Carnegie Knox Ltd, Carnegie Knox Ltd (Scotland), Lancaster Knox LLP, Lancaster Knox Consulting Ltd, Knox Capital Solutions UK Ltd, AML Tax (UK) Ltd, AML Financial Executive Ltd, SmartPay Accounting Services Ltd – and so on. All these are listed on Companies House with the relevant entries, dates and associated people.
There is (as one might expect) another consistent pattern to the people acting as directors, chairmen and senior officials in these companies. Notable names include Douglas Alan Barrowman, Arthur John Lancaster and Timothy Clive Eve, although there are many others who appear in different capacities across other affiliate companies – for the moment, we’ll focus on these. All of these individuals have held multiple positions at various dates within the ‘Knox’ group of companies – this group is well known for being one of the largest providers of the financial services which have been used by many thousands of contractors and freelancers across the course of the previous decade.
The Loan Charge legislation includes a clause which states that, in the first instance, this charge falls solely on the EMPLOYER. This is also affirmed by a decision in the Supreme Court in 2017 (commonly known as the ‘Rangers’ case) where the judges found in favour of HMRC (after they had changed their argument on advice from counsel, having previously lost in the lower courts) and where any liability to tax fell exclusively on the EMPLOYER. The Government, HMT and HMRC have reiterated agreement with this judgment by clearly stating that, with regards to pursuit and collection, the EMPLOYER, where available, will be targeted.
The ‘Knox’ group of companies is still very active and functioning as normal – a brief check on https://www.knoxprivateoffice.com/people/ will confirm. HMRC, on direction from the Government and HMT, have a duty to follow the law and pursue these promoters for any perceived liability. The Government introduced the POTAS (Promoters of Tax Avoidance Schemes) legislation in 2014 in a supposed attempt to ‘clamp down’ on these companies – a previous parliamentary question from the Midlothian MP Owen Thompson revealed that NO penalties have ever been issued under these legislative powers since 2013. The following might explain exactly why…
Between May 2017 and June 2019, Lancaster Knox LLP, with Arthur John Lancaster and Timothy Clive Eve two of the three Designated Members, donated £221,480 (all in cash apart from ‘auction prizes’ to the value of £17,200) directly to the Conservative and Unionist Party. Douglas Alan Barrowman is listed as an ‘impermissible donor’ having attempted to donate £2,400 to the same party in January 2019. The latter is also the head of the Barrowman Foundation, a charity organisation in which he is a trustee, alongside his fiancée Michelle Mone (who also happens to be a Baroness, courtesy of promotion to the peerage by Conservative Prime Minister David Cameron in August 2015) and the ubiquitous Arthur John Lancaster, director of Knox Private Office and many other associate entities of the ‘Knox’ group.
There is an entry in Hansard during Treasury Questions from 1st October 2019, where Carol Monaghan (SNP member for Glasgow North West) asked this in relation to the Loan Charge: “Seven needless deaths; seven families tragically left to deal with the consequences, and yet companies such as AML (an integral part of the ‘Knox’ group) that have promoted the schemes are getting away scot-free. AML and its director, Doug Barrowman, appear to have moved away with no consequences whatever. In fact, they are boasting that HMRC is not pursuing them for any assets or unpaid taxes. Will the Minister detail the efforts that are being taken against such companies, which have caused so much pain and tragedy?”.
The response from the FST Jesse Norman came thus: “The hon. Lady is absolutely right to focus on the activity of the promoters. They are extremely ingenious in operating within the framework of law, but doing some very nasty and duplicitous things. They often operate offshore and it is extremely difficult to close them down when they are constantly mutating from one company to another. I assure hon. Members that we are looking at the problem extremely closely, and I hope to return to the House at some point fairly soon with some thoughts”.
Almost a year later and unsurprisingly, everyone appears to be still waiting.
This is just one small example of what we have been attempting to battle. The thousands of us affected firmly believe that we are caught in the cross hairs of both Governmental and institutional corruption, with individual corruption thrown in for good measure. There are many permutations on the above – the same set of individuals associated with the ‘Knox’ group have also created new companies in an attempt to circumvent the Loan Charge legislation and offer ‘exemption’ to users of their arrangements for a sizeable fee, none of which have been proven to be effective. They have set up alternative companies to help ‘negotiate’ a form of settlement with HMRC for others, and we have evidence of this company being given advance information by HMRC of changes to the legislation deadline well before anything was made public following a ‘private’ meeting. Coincidence? We think not.
Mel Stride, the former FST, was accused of a conflict of interest over links to corporate tax avoider Amazon. He has a controlling stake in Venture Marketing Group, which provides ‘exhibition, publication and online services’, according to the register of MPs’ interests. Current or previous clients include Amazon, which has been repeatedly accused of corporate tax avoidance, HSBC, Lloyds and City fat-cats JP Morgan. All have an interest in tax policy which was Stride’s responsibility as Financial Secretary to the Treasury. Parliamentary rules state ministers should avoid conflicts or perceived conflicts of interest – not in his case, apparently. To extend the case against Stride, at the time he was spearheading the Loan Charge legislation, it was revealed by the Daily Telegraph that his father owns a company (https://www.stride.co.uk) which sells insurance to those being targeted for investigation by HMRC. And still does. Mel Stride was recently appointed (by his Conservative colleagues) to the position of Chair of the Treasury Select Committee – where he will now sit in judgment on the Loan Charge legislation that he himself, with the able assistance of HMT and HMRC, forced through against such overwhelming opposition.
None of the above facts have been even loosely acknowledged by Government, or acted upon.
Thanks anon, I borrowed much of this in a letter to the PM
Ali
They are extorting settlement by deliberately ignoring anyone who tries to advance settlement whilst demanding settlement is reached before sept 30th. This mental torture is surely illegal as one cannot settle without HMRC engaging and one cannot sign a document that self incriminates when nothing wrong has been done. This is a terrifying affront to the law and a perversion of justice. Don’t sit on the fence and watch this happen this is a first step!
When reading this I am extremely angry. As part of Montpelier tax consultants in the Isle of mMan this saved me a little in tax which I spent supporting local good causes. This was done at the time, mainly to avoid the complex IR35 legislation and for convenience. Now almost 20 YEARS later I am being made insolvent (probably bankrupt), for managing my tax affairs legally AT THE TIME. This is due to HMRC RETROSPECTIVELY changing the law for alleged tax due on account based of the retrospectively changed tax laws. I am 59, no pension and own a small flat. A lot can change in a persons life in 20 years, why should I be paying such a high price, along with 50,000 others, for HMRCs ineptitude and lack of action at the time, when I have paid the tax that was legally due? I hope, and will, fight for the rest of my life, for JUSTICE. This is #LoanChargeScandal I hope I live to see it and the culprits exposed.