Jesse Norman handed 820 ‘devastating’ Loan Charge contractor case files

A Treasury minister’s self-described willingness to ‘take on board’ evidence about Loan Charge 2019 has been put to the test, by 820 submissions of evidence from affected individuals.

Jesse Norman, the financial secretary to the Treasury, received the submissions on Friday, following his appearance to the Lords Economic Affairs Committee, where he suggested that he favoured an evidence-based approach to policy-making.

“I very much took the report on board,” Mr Norman said of the committee’s December 2018 enquiry The Powers of HMRC: Treating Taxpayers Fairly.

“And of course,” the Treasury minister followed up to committee chair Lord Forsyth, “I’ve read all the testimony that you’ve received.”

'Welcome to be corrected'

Later in the session, in relation to his claim that there is no public employer who has paid contractors via a Disguised Remuneration scheme, Mr Norman said he “welcome[d] to be corrected.”

The minister also said he was “very much open” to seeing details of public bodies using DR schemes, urging “please send me the [related] information; I’d be very interested to see it.”

Outside HM Treasury on Friday, MPs on the Loan Charge APPG reflected: “We delivered 820 submissions from individuals to Jesse Norman about the devastation their loan charge is having.

'Lives at risk'

“Please look at the reality of this policy Jesse and the way it is running lives. We need a suspension and review lives are at risk.”

At the outset of his appearance to the committee, Mr Norman said he had met with the Loan Charge APPG, as part of a process to get his head round the loan charge.

But a comment which the minister made potentially at the APPG, or at LCAG (a group which has denied being able to meet Mr Norman contrary to what he told peers), suggests he might be less receptive than he elsewhere implied.

'Lobbies trying to erode'

“It is part of the function of HMRC to preserve general taxpayers’ interest against specific lobbies trying to erode it, and that is part of what may be happening here,” the minister said.

But Keith Gordon QC has taken to Twitter to signal that it is taxpayers’ rights which HMRC is trying to erode, even if he does welcome HMT’s new commitment to ‘not apply the loan charge to a tax year where an enquiry was closed on the basis of the fully disclosed information.’

“If an enquiry was closed, then, quite right – there should be no second bite of the cherry [for the Revenue]. Let’s hope that ‘full disclosure’ will be defined sensibly,” began Mr Gordon.

“Let’s look at every other case. Those for whom HMRC failed to open an enquiry and have taken no other steps (discovery assessments) to challenge the arrangements. In those cases, those years are (in tax terms) just as closed. Therefore, the loan charge should be disapplied in those cases as well.”

'Pointless'

The QC added: “For the rest (and there are many thousands), HMRC have already taken steps to challenge the arrangements – either with an enquiry or with a timely discovery assessment.

“So, in those cases, the taxpayers already risk paying the tax due, but of course have the right to go to court to argue their case. The loan charge in practice makes such court proceedings pointless as it gives HMRC a second line of attack. Denying a citizen his/her access to the court is not what one would expect from a civilised democracy.”

The Loan Charge APPG has indicated the tax authority should be asking itself whether it fits into such a democracy.

'Knowingly misleading'

“The way HMRC are engaged in propaganda over the loan charge needs an investigation in itself. It is deeply questionable for senior officials to write (knowingly misleading) letters to [news]papers," the MPs said.

“Yet they’ve ignored this letter for three-and-a-half months now,” the MPs tweeted, referring to their April letter to HMRC’s CEO John Thompson.

In his evidence to the committee, Mr Norman acknowledged that he is “reliant on officials at HMT and HMRC” – a point he made to outline how he got up to speed on the loan charge in his new ministerial post.

'Malpractice or abuse'

“HMRC badgering…[over the phone to loan charge contractors] may be evidence for something but I don’t think it’s anything more than one data point,” the minister said.

“[HMRC badgering] may be deeply meaningful to the person concerned and if it is true, of course it should be referred to the appropriate authority and if there is malpractice or abuse, and there may be abusive behaviour by some public official, then they should be pursued for that.”

But Mr Norman claimed that far from being abusive, HMRC is “bending over backwards to try to get better at improving the way its deals with taxpayers,” partly because it can feel “the hot breath of parliament” behind it.

The minister also acknowledged however: “[The Revenue’s] officials are very public-spirited individuals and they are concerned that they may have overbalanced a little.”