Loan Charge In Limbo With Major New Review
Prime Minister Boris Johnson has announced a review of the “controversial” loan charge. This review was in part based on campaigning by MPs and other organisations who are against the Loan Charge.
The announcement is welcomed by thousands of campaigners who have been targeted by HMRC thanks to the re-assessment of loan-based avoidance schemes. The latest review does highlight the almost scandalous approach taken by Government in rolling out such a problematic scheme – one tax expert went further: “A salutatory lesson in how not to enact new tax legislation.”
The Prime Minister announced the changes in Parliament. He acknowledged that the despised loan charge had been raised by his own constituents and that the scheme required a “thoroughgoing review of the matter.” However, there are no real details in terms of what the review will focus upon.
According to AccountingWEB: “As the PM has announced, the government will undertake a thorough review of the loan charge and will set out further details in due course.”
MPs have felt the heat from their constituents over the loan charge – with HMRC even being blamed for an increase in suicides. A major protest was arranged outside Parliament to highlight the plight of people who had committed suicide after using loan-based avoidance schemes.
Who Is Against The Scheme?
The news of the review was also welcomed by the Parliamentary All-Party Loan Charge Group who has been investigating MP’s constituents’ concerns regarding the charge and the human impact of the policy. But the group did state that key issues surrounding the charge still needed to be addressed.
Another issue highlighted by the Parliamentary group was the type of review the Government was planning on undertaking. The lack of details worried the group as they want the review to be independent of Ministers – which was a key campaign promise of Boris Johnson’s Tory leadership campaign.
The Group’s leader, Ed Davey MP, has also called for an immediate suspension on all settlement cases until the review has been concluded. This isn’t the first time they have wanted the charge removed. The group managed to secure an amendment to the Finance Bill 2019 in order to force the Treasury to review the loan charge and its impact on individuals. The Group and the Treasury have been at war for some time and the review does come at a good time to end this conflict between Parliamentarians.
Why Boris Must Revisit This Legislative Nightmare
The review needs to be in-depth but with the August 31st deadline passed with two further deadlines imminently edging closer, the Government must look again at this legislation.
The loan charge disclosure deadline is January 31st, 2020. This needs to be submitted with the individual tax return without delay.
Therefore, for any legislative change to occur, this review and the Government needs to act fast!
If you are unsure about how the Loan Charge will impact your self-assessment tax returns, why not get in contact with Prestige Business Management today? Call us on 0203 773 2927 to find out more?