Calls for suspension of loan charge deadline following review delay
The loan charge APPG has called for the suspension of the loan charge for at least six months, after it was announced that taxpayers will have to wait until a new government is formed before they hear from the Morse review into the controversial rules.
Jesse Norman, the Financial Secretary to the Treasury, has written to Sir Aymas Morse, the chair of the independent review into loan charge rules, advising him that he will not be able to deliver his conclusion until after the election.
“In light of this, and the clear Cabinet Office guidance about what decisions can be made in a pre-election period, ministers have agreed that it would be most appropriate for your report to be submitted to the new government on its formation,” Mr Norman said in his letter to Sir Aymas.
The All-Party Parliamentary Loan Charge Group responded to the news with an urgent letter to Sir Aymas, calling for a delay of the 31 January 2020 deadline for paying the loan charge.
“There is simply not enough time for proper consideration of your report and recommendations by the incoming Parliament and the new government before the loan charge payment deadline is reached,” the APPG said.
The group warned that the new government will not be able to properly consider this matter until the second half of January, hence delaying the implementation of any of Sir Aymas’ recommendations until the end of January.
“It is deeply worrying, considering the mental state that many thousands of people are in, and with the impact on their families, that we now have a wholly unreasonable situation where people now cannot know whether or not they will face life-changing bills in January 2020,” the APPG said.
“It is not imperative that there is an immediate announcement that the loan charge will not fall due for payment by 31 January 2020 and that the loan charge will be suspended for at least six months.”
The APPG asked Sir Aymas to press the Treasury to do this, and as quickly as possible, explaining that this needs to happen so as not to prejudice “your review by making any recommendations redundant.”
The independent loan charge review into repayments related to disputed tax avoidance schemes was launched in September. Under the current rules, at least 50,000 people who used loan-based avoidance schemes are required to pay tax on up to 20 years of income in one financial year, by the end of January 2020.
In its letter to Sir Aymas, the APPG has warned that this latest delay in the review will exacerbate the mental health concerns and the suicide risk.
“With the 31 January date so close and with people otherwise forced to make life-changing decision because of it, it would be grossly irresponsible and palpably unjust not to announce a suspension of the loan charge reporting and payment date,” the group has said.