The Loan Charge Action Group has been behind many of the contractor triumphs over HMRC in the past year.
Through their lobbying efforts, they’ve raised awareness of the Loan Charge itself, secured an official review of its retrospective legislation and now they’ve established an All-Party Parliamentary Group (APPG) to fight the loan charge from the inside.
LCAG’s press release states that it ‘aims to address how the Loan Charge will affect thousands of freelance, contract and locum workers in the UK, as well as the wider context of fairness of tax legislation and the conduct of Her Majesty’s Revenue and Customs.’
Who are the Loan Charge Action Group?
The LCAG is a not-for-profit organisation founded by Richard Horsley, Andrew Earnshaw, and Steve Packham with the sole aim of raising awareness of, and fighting against, HMRC’s diabolical loan charge.
The group has been campaigning for reform to the Loan Charge 2019 legislation since March last year and has gained considerable momentum in a short space of time.
While contesting the revenue-grabbing scheme in its entirety, they’re specifically working towards repeal of its retrospective aspect. It’s this part of the Loan Charge in particular that has the potential to bankrupt tens of thousands of contract workers who have done nothing illegal.
What is the significance of the Loan Charge APPG for contractors?
Having dedicated MPs explicitly supporting the LCAG in parliament is pivotal to derailing HMRC’s uncompromising operation.
Following on from a devastating House of Lords report back in December that described the Loan Charge as ‘undermining the basic principles of tax fairness’, Mel Stride MP has since been forced to commit to a review of the legislation – a huge win for thousands of self-employed people across the country.
While the Loan Charge APPG operates as an advisory force only (meaning that it can’t actually change the law), it’s clear from the progress already made that there’s certainly power in the LCAG that will only grow with parliamentary support. The more the loan charge is openly questioned, the more awareness - and thus, inevitably, opposition - will spread.
The Loan Charge APPG will be chaired by Sir Edward Davey and spans political parties in Co-Vice Chair and Officer appointments.
LCAG spokesperson Steve Packham welcomes the Loan Charge APPG, saying:
‘It is particularly heartening that LCAG has been appointed as Secretariat to the group, recognising not only the work we have done in building the case for reform of the retrospective aspect of the Loan Charge but also the plight of our many members caught up in this ill-considered and unfair tax legislation.’
What can we expect from the Loan Charge APPG?
Already, it's having an impact in parliament by drawing attention to the Loan Charge.
Just yesterday, three MPs raised the Government’s controversial 2019 Loan Charge policy in the House of Commons, criticising its retrospective nature and calling for a delay in its introduction.
In Treasury questions, Alistair Carmichael MP challenged the Government over the ‘clearly retrospective nature’ of the loan charge which is set to ruin thousands of contractors nation-wide.
Mr. Carmichael shared the story of an oil and gas worker in his constituency, stating that he ‘now finds himself facing bankruptcy before his twenty-ninth birthday’ as a direct result of the retrospective policy.
Andrea Jenkyns MP also spoke out against the draconian policy, imploring HMRC for a delay to allow more time for legitimate, fair reviews before many contractors are severely impacted financially – some to devastating lengths.
In the weeks since an amendment to the Finance Bill to tackle the loan charge was promised, it’s been a concern of the LCAG's that the review won’t be taken seriously. This review was set to be completed before the end of March but the group fears that will not be the case, writing: ‘it is already clear that the Government is refusing to conduct a genuine review and is set to proceed with the Loan Charge and accept the inevitable bankruptcies it will cause.’
We hope to see the Loan Charge APPG become a driving force that ensures the promise of a review is honoured.
If you’d like to find out more about the Loan Charge Action Group, please see here.