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The UK government has launched a review into “loan charges” in a bid to “end” the row over a tax avoidance crackdown that has been linked to several suicides.
Treasury Secretary James Murray told the Financial Times that the motivation behind the review was: Announce The outstanding tax debts related to the evasion schemes were scheduled to be settled on Thursday.
But he added that the review, which will be led by former HM Revenue and Customs Inspector Ray McCann, would also uphold fairness for the public purse and other taxpayers who were not involved in tax evasion.
“Some people affected by loan charges are finding it difficult to imagine a way out of this situation they are in… For me, trying to resolve the matter and get it over with is the driving force of this review,” Murray said in an interview before the announcement.
In 2019, at that time governor The government introduced “loan charges” in an attempt to clamp down on “disguised bonus” schemes, which involved workers across a range of sectors taking out loans via offshore trusts, which had proliferated in the past two decades.
At HMRC He said previously It is estimated that around 50,000 people will be affected by the loan fees and that users' income is “on average twice that of the UK taxpayer”.
The loan charge originally required affected people to pay tax on up to 20 years of income in a single financial year, sparking public outrage and accusations that the government was making unreasonable demands.
The previous Conservative administration later relaxed this policy, cutting the 20-year time frame in half and making the distribution of premiums easier.
But six years after the policy was launched, tens of thousands of people have still yet to settle their affairs with HMRC. The IRS reported that the policy was linked to at least 10 suicides and 13 suicide attempts.
Labor committed to a new independent review of loan fees before last year's general election. A previous report by Lord Amyas Morse in 2019 was criticized by MPs and campaigners for involving Treasury and HMRC officials.
Murray said the government had “made some efforts” to ensure public confidence in the review, which will continue until the summer and will be staffed by civil servants with no connection or experience working on loan charge policy. They will work in a building separate from the treasury.
McCann, a former head of the Chartered Institute of Taxation, said he was “delighted to be asked to help find ways” to resolve the dispute.
McCann has previously criticized how HMRC sought to deal with loan charge activists, noting that “all the people (within the agency) who work on loan schemes could be working in customer service”.
The review will look into “barriers preventing people subject to loan charges from reaching a resolution with HMRC and recommend ways in which they can be encouraged to do so,” the government said in a statement.
Campaigners who have called for a wide-ranging inquiry – looking into the role of scheme developers, umbrella companies, recruitment agencies, accountants and tax consultants who recommended the schemes, as well as HMRC – have criticized the announcement.
Steve Packham, of the Loan Charges Action Group, said the proposed review was a “betrayal” and would not solve the problem.
He added: “We are very concerned about the mental health impact of the false non-review announcement.”
Murray said his meetings with loan charge campaigners last year alerted him to the impact of the policy and that the government wanted the McCann review, which it will respond to by the autumn budget, “to provide a way for affected taxpayers to reach a settlement”. .
Despite some calling for a “different scale review”, Murray added that his priority was “to help those people who feel stuck”.
