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.