Our friends at the Low Incomes Tax Reform Group (LITRG) is calling on HMRC to pause any further action against taxpayers yet to meet their loan charge obligations. LITRG said this will take account of people on low incomes who remain unaware that they were placed in loan arrangements. Such a pause will enable HMRC to consider alternatives to sending formal enquiry letters and to address outstanding issues with the charge.
In December 2020, the Lords Economic Affairs Finance Bill Sub-Committee launched a short inquiry on the loan charge. The Committee has written recently to the Financial Secretary to the Treasury to highlight its key findings on HMRC’s progress on tackling issues with the loan charge, particularly since the publication of the review by Sir Amyas Morse in December 2019.
The Committee’s findings included: HMRC has made progress in improving the way it manages the loan charge, but there are far too many shortcomings in the way its response to the Morse Review is being implemented; in its actions, HMRC should follow the spirit, as well as the letter, of its Charter and the recommendations of the Morse Review; and HMRC appears finally to recognise that lower-income taxpayers got caught up in disguised remuneration schemes without being aware of the risks, but HMRC must do more to take account of their specific circumstances.