MPs to quiz Sir Amyas Morse over ‘halfway house’ Loan Charge Review

Sir Amyas Morse will be called before a group of MPs probing Loan Charge 2019 amid growing disquiet that his recommendations do nothing for up to 40,000 contractors.

The former head of the National Audit Office , who tabled three concessions for Loan Charge contractors in December, will be summoned by the Loan Charge APPG as part of their enquiry into his review.

At the APPG’s first meeting yesterday since it was reformed, talk also emerged of them sending for the very Treasury minister with responsibility for the legislation, Jesse Norman.

But the minister’s advisers probably wouldn’t even dare let him into the same room as the combative-MP group, mused the Tories’ Mike Penning, the new Loan Charge APPG co-chair who led the meeting.

'Appropriate response'

So while the appearance of Mr Norman to the MPs looks optimistic -- at best, Sir Amyas’ appearance was disclosed to ContractorUK, during a break at yesterday’s meeting, as already scheduled.

Sources also revealed that the Morse Review’s terms were always seen as problematic by the MPs, because they restricted Sir Amyas from admonishing HMRC (he was only asked to assess whether the Loan Charge was an “appropriate response” to tax avoidance).

As a result, his review proposed and the government has adopted “a sort of halfway house”, said the source, with little reprimand from HMRC, concessions for some of its customers but no resolution for tens of thousands of others.

'I'd like to no longer feel like a criminal'

In fact, the APPG calculates that even with Sir Amyas’ concessions, some 40,000 taxpayers and their families still face “huge, retrospective” bills from HMRC, despite the tax demands “never being legally proven,” the MPs say.

Perhaps IT contractor and taxpayer ‘Gus’ summed up it best when, asked at the Q&A session of the meeting, what resolution he would like -- ‘if he had a magic wand,’ he said:

“I’d like to no longer feel like a criminal, when I haven’t broken the law.”

Another affected taxpayer caught by the charge during his IT contracting career, Gareth Parris, said:

“I’d be comfortable taking some of the blame [HMRC is putting on me]. But I’d like a loan charge set at a low tax rate percentage – such as 10% of loan values.”

'Retrospectivity for some, not for others'

But whenever he is questioned by the MPs, Sir Amyas might face an insurmountable task as taxpayer ‘Katherine,’ who sold her home just to settle HMRC’s £400,000 demand, admitted:

“I can’t think of anything that would change my situation.”

Later, she added: “[Yet I’m concerned for others] because the [Morse] Review recommends retaining retrospectivity for some but not for others, and the December 9th 2010 date is entirely arbitrary and without foundation.”

'Morse Review not helped'

Even more ominously for Sir Amyas ahead of his face-to-face with the MPs, all five of the HMRC customers nodded in agreement to Mr Penning’s assertion that, based on their evidence, the Morse Review ‘has not helped a single one of the taxpayers.’

The closest exception, it seems, was taxpayer ‘John’ as the Morse Review and the government’s response to it has removed his exposure to the Loan Charge itself.

But even he said that he believes HMRC’s position regarding the pre-2010 years is unclear, and he fears HMRC may seek to pursue additional or novel routes to get him to pay more tax, even though the charge itself has gone away.

'You never know'

He reflected: “I like to look at the HMRC like the ‘Hokey Cokey.’ You never know if you’re in or out. [The Morse Review is similar]; it’s effectively saying, ‘let’s just make it somewhat retrospective.’”

Addressing the five taxpayers, Labour’s Ruth Cadbury, vice-chair of the Loan Charge APPG said: “What [all your brave] testimonies tell me is that ordinary, hard-working people who set out to do the right thing are [still] being made [by HMRC] to feel like they are in the wrong. We’re dealing [here] with something that feels very different to anything else. This isn’t the end of the story.”