Treasury to review 2019 loan charge
10 January 2019
The Treasury is to review its 2019 loan charge proposals, which are designed to tackle disguised remuneration, by the end of March after a cross-party group of MPs were successful in pushing through an amendment to the Finance Bill.
Accountancy Daily has reported that the amendment, new clause 26, was tabled by Ed Davey, the LibDem MP for Kingston and Surbiton and was signed by 38 MPs with more giving their support during the parliamentary debate.
The loan charge, due to come into effect in April, has attracted considerable controversy as the regulations give HMRC powers to impose a second taxing point for historical schemes. This means the charge will affect anyone who used a loan scheme, typically via an umbrella company, and who has not paid the intended amount of tax over the last 20 years. HMRC has indicated it expects to protect around £3.2bn in tax by tackling such avoidance schemes.
A House of Lords report from the economic affairs committee published in December was heavily critical of the plans, saying: ‘HMRC appears to be prioritising recovery of tax revenue over justice by targeting individuals, rather than promoters (who could be considered more culpable), so it can more easily recover liabilities.’
Read the full report from Accountancy Daily.
Tax avoidance loan schemes and the loan charge (8 November 2018)
Tax avoidance: if it looks too good to be true, it probably is (6 December 2018)