Is It Time For Re-Morse To Avoid More Loan Fee Victims?



When questioned for changing his position, legendary economist John Maynard Keynes said: “When my information changes, I change my mind. What are you doing, sir? “And that is precisely what the Lending Charges Action Group (LCAG) is asking Sir Amyas Morse, who conducted an investigation into the loan charges which came to conclusions which are now being invalidated by new evidence.

The LCAG issued a 12-page open letter to Sir Morse, containing a plethora of findings following the extensive research conducted via Access to Information (FOI) requests to HMRC.

According to LCAG, the newly emerged evidence, which was not allegedly made available to Sir Morse at the time of his report, “demonstrates that the conclusion of his examination of loan charges was fundamentally flawed and now needs to be reconsidered”.

What are the loan fees?

In the 2017 Finance Law (No. 2), the government introduced aggressive measures to combat the use of disguised remuneration loan schemes, known as “Loan Charge 2019”. Some rules had already been introduced in the 2011 finance law to ensure that loans based on the Employee Benefit Trust (EBT) are taxed as employment income. However, the systems then evolved into systems based on self-employed people, which were not covered by the 2011 finance law.

When the loan charge was introduced in 2017, it gave HMRC the power to look back nearly 20 years on the tax affairs of those involved. This is far more than the four-year window of investigation that is given to HMRC to elevate a standard discovery assessment, and has had a devastating impact, predictably, resulting in the deaths of seven people.

An independent review of loan charges, led by Sir Amyas Morse, resulted in the publication of a report in December 2019 with a number of recommendations, including one that loan charges should only apply to loans granted after 2010 because “the law was clear”. LCAG claims that “the law only became clear following the 2017 Supreme Court ruling in the Rangers case, where it was found that employers, not employees, were liable for all taxes. deemed due ”.

This is the heart of the matter, supported by LCAG – that the law makes employers accountable, not individuals, and as their document argues, recruiting agencies should have been sued with the money under section 44. of the law on income tax (earnings and pensions). 2003 (ITEPA 2003), not the entrepreneurs.

What is the newly highlighted evidence?

New evidence that has emerged has revealed the following:

The CEO of HMRC admitted to his colleagues that he had “repeatedly tried to get a legal analysis to understand the strength of our claim with very little success”Regarding the HMRC suing employees, as opposed to employers.

HMRC refuses to share details of legal matters which they claim publicly justify the loan charges, thereby facilitating their “right” to sue individuals.

The idea of ​​the loan charge was initiated by HMRC, which admitted internally / privately that it takes away the fundamental right of citizens to challenge HMRC’s “point of view” in court.

HMRC admitted it knew agencies would be responsible in many cases, not individual contractors. HMRC has exercised its discretion to retrospectively remove the PAYE obligation on agencies, but a recent court case has confirmed that this is illegal.

HMRC itself has engaged contractors using loan agreements through July 2020 without raising any concerns.

This evidence has emerged since Morse Journal and LCAG said that if it had been known at the time, it could and should have changed the findings and recommendations.

The letter also raises concerns about how HMRC interfered in the appointment of experts for the review and provides details of how they believe the recommendations made were not implemented as planned.

Calls for a fair resolution of loan fees

The All-Party Parliamentary Loan Charge and Taxpayer Fairness Group (formerly the Loan Charge APPG), which has 246 members from both Houses, also issued an open letter to the Prime Minister and Chancellor calling for a fair resolution of the Loan Charge. It was recently signed by 142parliamentary sd.

Loan Charge Action Group spokesperson Steve Packham said: “In the past two years since Lord Morse conducted his review, important new evidence has emerged which makes his conclusion – ‘that the law was clear from December 2010 ”- weak and unsustainable.

The law was not clear until the outcome of the Supreme Ranger Court case in 2017, which determined that employers had to pay any tax deemed due, which we now know HMRC did failed to do so and instead attacked individuals.

The truth about the loan fees and HMRC’s extraordinary attempts to distort and distort its reality is revealed week after week, as more emails and internal documents are leaked and more factual evidence is revealed. revealed through access to information requests.

The LCAG also draws attention to the fact that there are approximately 161,000 open cases (at the end of March 2021) pending, and states that the loan fees “have done nothing to” draw a line under the use of these schemes, ”which as you did the stated goal of borrowing costs when they were introduced was clear in your own report. ”

Packham urges Lord Morse to have the courage to admit that his review failed to address the fundamental unfairness of the loan charge and to support calls for a fair resolution.

Tax lawyer Keith Gordon, who has long-standing concerns about loan fees and who met Sir Amyas Morse as part of the review, said on Twitter today: “When I met Sir Amyas , as he was then, I thought he was a man of integrity. So when his report came out, I believed he had been misguided about the December 2010 point. these two points, I am sure he will take the letter from LCAG seriously and reconsider his position.

When John Maynard Keynes received new information, he changed his mind. The question now is whether Sir Amyas Morse will do the same.


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