There are concerns that a recently announced review of the controversial loan charge may not be truly independent. Details of the review were announced on September 11th after Boris Jonson committed to a review on Prime Minister’s Question Time.
In announcing the review's key terms online, the government insisted that it will be an independent review, emphasising the “independence of mind” of its head, Sir Amyas Morse. Although the former Chief Executive of the National Audit Office’s abilities aren’t in doubt, concern has been expressed that the review also looks set to be staffed by HMRC and HM Treasury civil servants.
After the review in March was seen as a whitewash rather than a genuine investigation into the loan charge, industry bodies stressed that any review must be independent in order to hold any validity. The concerns over the loan charge review echo those concerning the off-payroll reforms scheduled for next April, with many fearing that the tax legislation is founded on biased ‘facts’.
In a letter to Chancellor Sajid Javid, The Loan Charge APPG stated, “The Loan Charge Review secretariat cannot be provided by HMRC or HMT staff as there’s a clear conflict of interest, utterly incompatible with an independent review.” The Chancellor was also told by the MPs that the review should take evidence from parties outside of Whitehall, including those facing the charge.
Some industry representatives have questioned the short turnaround time for the review, which is due to be concluded by mid-November. Although this gives taxpayers certainty ahead of the January Self-Assessment deadline, there are concerns that it might not be enough time to give proper consideration to the issues.
While the review is under way the loan charge will remain in force and HMRC will provide more detail about how the review will affect individuals involved. Tax experts have advised sticking to an existing settlement or APN payment plan, while those that haven’t already done so will still need to submit information to HMRC by the September 30th deadline.
The results of the review may give some indication of how the government will handle the off-payroll reforms ahead of next year’s April 20th deadline. With both taxes hitting the contracting sector hard, it remains to be seen if HMRC take heed of the mounting criticism and agree to compromise.
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