Thousands hit with tax avoidance bills

The Guardian reports that thousands of employees including IT and NHS workers across the UK are receiving “staggering bills” from the HMRC relating to its Loan Charge. The Loan Charge, first announced in 2016, is set to target those who used so-called disguised remuneration schemes to avoid tax as far back as 1999. It is slated to come into force in April 2019 and will aim to recover losses from the arrangements as contractors have to either settle their tax affairs or face penalties.

However, a leading tax barrister Keith Gordon, of Temple Tax Chambers, has written to the Financial Secretary to the Treasury Mel Stride, warning of the legislation’s inconsistency with legal principles, and of HMRC’s failures which have led to its creation. In his letter to Stride Gordon comments: ‘Contrary to the present wishes of over 100 non-Government MPs, the Loan Charge legislation was enacted so as to drive a coach and horses through any concept of fairness and balance.’ Elsewhere he adds: ‘It is my view that no-one can safely rely on the veracity or accuracy of any statement uttered by HMRC on the mere basis that the statement is being made by a public servant.’ Gordon concludes by urging Government, in its review of the Loan Charge, to engage with independent sources of policy advice beyond HMRC, many of whom have called for the legislation’s retrospective aspect to be withdrawn.

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