Taxpayers have themselves to blame for incurring the loan charge, says minister

 In Loan Charge

HMRC is taking ‘a measured, proportionate and sympathetic approach’ to the collection of the loan charge, said Mel Stride, financial secretary to the Treasury in response to questions in the House of Commons about the new tax.

On whether it was right that HMRC could go back 20 years to reopen accounts that had been accepted, Laurence Robertson (Conservative) asked why, if this tax was due then, HMRC had not obtained that tax 20 years ago?

The taxpayers were to blame, said Mr Stride. ‘As to why tax may not have been paid at the time that it was due, there are a multitude of reasons for that not least of which is the fact that many taxpayers simply do not volunteer the correct information or they claim that their scheme works when clearly it does not. HMRC has, over many, many years, pursued these various schemes through the courts, including the Supreme Court, and on each occasion, these schemes have been found not to work.’

He refuted a claim by Paul Williams (Labour) that some taxpayers had no choice in how they were contracted to work by some businesses. Mr Stride said no one was ‘forced into making a tax-avoidance arrangement. If something looks too good to be true, it generally means that it is just that.’ Further, of the settlements to date, more than £1bn, he said ‘some 85% have been from employers, not employees’.

Dismissing accusations that the loan charge was retrospective, Mr Stride said ‘it was not in the least retrospective’. He advised taxpayers affected by the loan charge to contact HMRC: ‘There has never been a time in the history of our country when the[se] arrangements … were ever compliant with our tax code. Of course, the loans, which there is no intention of ever repaying – they are simply there to avoid National Insurance and income tax – persist into the present. Generous “time to pay” arrangements are available with HMRC; I urge anybody who is involved in avoidance of this kind to talk to HMRC and come to sensible arrangements.’

House of Commons Hansard:
From Taxation Magazine.
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