Thompson disappointed at budget failure to review “unfair” loan charges

Thursday July 2nd 2020

Owen-Thompson-Midlothian-MP-House-of-Commons-Speaking


Written by Midlothian View Reporter, Luke Jackson

Owen Thompson MP expressed disappointment that the chance to halt and fix the “unfair” loan charge was not taken during the budget vote last night.

Mr Thompson supported a number of cross party amendments which sought to review the scheme and to remove people who did not deliberately avoid tax from the retrospective charge. Many people caught up in the loan schemes were low or average waged contractors and freelancers following professional advice, often directed to use the schemes by their employers, and assured the arrangements were legitimate.

An SNP amendment which called for an independent review of the scheme received cross party support from all opposition parties and all MPs in Scotland except Conservatives. The review would have included whether HMRC has provided reasonable flexibility around repayment plans with the aim of avoiding business failures and individual bankruptcies.

Mr Thompson has also called for more robust action to penalise the promoters and operators of tax avoidance schemes. A previous parliamentary question from the Midlothian MP revealed that no penalties had been issued under the legislative powers to tackle Promoters of Tax Avoidance Schemes (POTAS) and fewer than five under the Disclosure of Tax Avoidance Schemes (DOTAS) since 2013.

Mr Thompson said

“Tax evasion is always wrong and it needs tackled, but the implementation of the Loan Charge Scheme has been a disgrace. It has caused financial devastation for thousands of ordinary workers in the public and private sector. The refusal of the Tories to admit their policy is flawed and take action to fix it is shameful.

“HMRC must be fair in their dealings if we are to have faith in the system. It’s wrong that so little is being done about those who promote and operate the schemes while ordinary people who were unwittingly swept up are being ruthlessly pursued. Yet again it seems like one rule for the elite and another for the rest of us.

“Many small Midlothian contractors and freelancers report being professionally advised to use loan charge arrangements, and in some cases were even required to do so. They now face financial ruin, many losing their homes and left in despair.

“The Tories should show some compassion for the individuals affected by this ill-thought out policy and review how it is working in practice. I’d like to see them put far more energy into tackling tax avoidance from big multi-nationals and pursuing all those who promote, enable and profit from disguised renumeration schemes, instead of driving ordinary people to the brink.

“The Tories clearly don’t want to admit the damage they have done with their botched implementation of the loan charge. I am disappointed they did not take the chance to right this wrong.”

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