Parliamentarians sign letter calling for delay to loan charge deadline

At least 50 Parliamentarians have signed an open letter to the Chancellor Rishi Sunak calling for an immediate delay to the loan charge settlement deadline due to the impact of the pandemic.
Rishi SunakRishi Sunak
Rishi Sunak

The letter, which has been signed by a number of Yorkshire MPs, also raises concerns about the potential suicide risk posed by the policy.

The letter from the Loan Charge All Party Parliamentary Group to Mr Sunak, states: “We are writing to implore you to delay the date for reporting the loan charge and concluding settlement agreements from 30th September 2020 to 31st January 2021.

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“This is essential, to allow all those who wish to do so adequate time to settle and also due to the unforeseen impacts of the Covid-19 crisis.

" The delay is vital due to effect of the Covid-19 pandemic on business and the economy. As HMRC knows, if the loan charge is imposed, as well as forcing individuals into bankruptcy, it will also close businesses (where company directors are facing the loan charge).

The letter continues: “This in turn will cause job losses. A sensible delay gives the opportunity to avoid much of this damage.

“Above all, there remains a risk of further suicides due to people being put under unreasonable pressure to settle.

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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.

“We urge you to announce a delay as soon as possible and to make whatever arrangements are needed to implement it."

Last a year, a review concluded that there was a clear public interest in preventing the use of loan schemes. However, it concluded that the loan charge went too far.

It found that it overrode taxpayers’ statutory protections by applying an unprecedented 20 year look back period and failing to adequately consider the serious distress it would cause some of those affected.

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The Government said it recognised the concerns raised in the review. To address them, all but one of the review's recommendations were accepted.

A Government spokesperson said: “HMRC extended the 2018/19 deadline for Loan Charge customers to 30 September 2020.

“HMRC expect the majority of individuals liable to the loan charge to be able to file a complete and accurate return by this date. The Government has no plans to extend the deadline beyond 30 September 2020.

“HMRC will take a proportionate and reasonable approach to anyone who is unable to file their tax returns and pay the tax due or agree a time to pay arrangement by the 30 September 2020 deadline as a direct result of COVID-19.”

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