Eighty MPs write to Rishi Sunak over September 30th Loan Charge deadline

The coronavirus pandemic has led to HMRC not being properly able to conclude settlements of Loan Charge contractors by September 30, despite officials still sticking to the deadline.

Breaking this news to the chancellor, almost 80 MPs said that the government’s rationale for refusing to delay the declaration deadline was outlined “before the covid-19 crisis” hit.

Since the pandemic, not only has HMRC’s resourcing, staffing and responsiveness reduced, but the “financial circumstances” of affected customers have also worsened, the MPs say.  

'Unreasonable'

Rishi Sunak is further told: “It is clear from the evidence that HMRC simply cannot conclude settlements by 30th September, with them admitting there are 6,000 cases in this position.”

Signed by all three Loan Charge APPG chairs, the letter adds: “Pre-Loan Charge settlements are not possible in the current timeframe and people are being asked to sign a contract with unreasonable terms and interest charges, as well as penalties which vary from case to case.”

On top of other offer inconsistencies (expenses deducted in some not all, fees taxed in some not all), some taxpayers cannot obtain data from HMRC to even gauge the cost of settlement.

'HMRC are just not responding'

Steve Packham, founder of the Loan Charge Action Group, which supports HMRC customers affected by the Loan Charge, told ContractorUK that all the MPs’ concerns were valid.

“We would say that the biggest problem at the moment is the fact that HMRC are failing to properly conduct settlements  -- or they’re just not responding at all to offers to do so.

“People are therefore being denied the right to settle, when all along HMRC and the government have claimed that this [-- settling with HMRC] -- is what they wanted,” he said.

'You can't use the service'

An email chain obtained by ContractorUK shows the difficulty one taxpayer had – and is still having – in trying to fully declare his loans to HMRC in the white space of his tax return.

An HMRC software issue is among the many obstacles he faces, notably when the Revenue instructed him to amend his tax return, he could only respond to officials with a screenshot.

In the graphic, an HMRC website error-message states: “As the HMRC service was not used to file a tax return this year, you can’t use the service to amend that return.”

'This will only be made even worse'

“Although HMRC’s website says I have until 31/1/2021 to amend my 2018/19 SATR, they are demanding it by 30th September this year,” the contractor added yesterday.

“But when I asked my case worker in Counter Avoidance for help, she told me to contact Self-Assessment -- who then told me to contact her.”

The LCAG spokesman said: “Now HMRC staff are again being told to work from home [due to the government’s new covid-19 restrictions], this will only be made even worse, hence the need for a delay to the September 30th deadline.”

'Further suicides'

In their letter to Mr Sunak, 76 MPs warn: “There [also] remains a risk of further suicides due to people being put under unreasonable pressure to settle. People are being asked to conclude settlements in a matter of a few days, which is wholly unreasonable.

“A delay is therefore clearly sensible  and needed, not only to allow HMRC the time to conduct settlements, but to allow them to do so properly.”