ICAEW, the UK’s leading accountancy membership bodies, was one of the first organisations to provide evidence against the 2019 Loan Charge Review. Now, it has penned a letter to Sir Amyas Moore and shared some of its views.
The body said that its case hinged on three aspects: impact on the tax systems, fairness and proportionality, and other changes.
The emphasis on proportionality agrees with the expected outcomes, like relief in the rule for taxpayers, so they can pay in one tax year, and the loan charge can have a lower tax rate.
Frank Haskew from the body wrote in the letter that the new changes should not put Loan Charge taxpayers at a disadvantage. He wrote:
“In the event that new terms are offered following this review, such terms should also be offered to those who came forward and settled. It would also not be unreasonable for those who did so to seek redress for the time and cost they have incurred in seeking to comply with the law.”
Mr. Haskew implored Sir Amyas to make a “decision” regarding the changes. The body said that they warned MPs about what they felt were the fundamental issues with the DR legislation. They also raised concerns on the role of the HMRC; if the taxman was swift enough to resolve the issues, none of this could have happened. Still the legislation went ahead while their concerns were ignored.
Furthermore, the lawmakers could not review several legislative clauses. Parliamentary debates that followed failed to show the impact of the legislation on the taxpayers. Mr. Haskew revealed that such state of affairs was extremely disappointing. He explained that going forward, they are stuck in a new predicament; individuals have to reorganise their tax affairs in accordance with the loan charge. They are particularly uncertain whether new changes are going to be introduced, making them reorganise their tax affairs again.
If the clauses were assessed fairly, and attention was paid to the concerns from the body, this controversy could have averted.
Mr. Haskew believes that the ball is now in the court of parliament; they can still resolve it. Still, the Loan Charge proceedings have inflicted a great deal of damage to the credibility of the UK tax system. From now on, relevant authorities have to learn their lessons, so such controversies are not ignited in the future.