Loan charge MPs secure ‘unanimous’ support for motion to curb policy’s retrospective powers

Arbitrary start date

However, as previously detailed by Computer Weekly, the revised start date for the loan charge policy has been described as “arbitrary”, on the grounds that the Finance Bill 2011 did not come into force until several months after.

This point was recently raised during a debate in the House of Commons, put forward by the Loan Charge All Party Parliamentary Group (APPG) of cross-party MPs, that made the case of having all retrospective elements of the policy removed.

This would mean the policy would only apply from the year it was brought into law, which is 2017, and would result in tens of thousands of individuals falling out of its scope.

Mike Penning, Conservative MP and co-chair of the loan charge APPG, set out the rationale for tweaking the policy in a statement.

“Colleagues from across the House of Commons have consistently expressed their opposition against retrospective legislation, but the now discredited Morse Review recommends that retrospection back to 2010 should remain, which is not acceptable,” he said.

“The only fair thing to do is to make the loan charge apply from when it was introduced, not retrospectively. So we hope that Ministers will now look at our report and will agree finally that having any retrospection of the loan charge is wrong and amend the Finance Bill to this effect.”

Support from MPs

More than 20 MPs spoke in support of this idea during the debate, and more than 40 MPs from across all parties added their support for it ahead of time by signing a motion ahead of the debate along these lines

In the wake of the debate, the motion to remove all retrospective elements of the policy passed unanimously, and stated: “This House believes the loan charge is an unjust and retrospective tax; notes that the law on the loan charge was not settled until 2017; and calls on HMRC to cease action on loans paid before 2017.”

While the motion expresses the will of the House of Commons on this matter, it cannot force the government to act, the loan charge APPG acknowledge in a statement.

However, given the level of opposition amongst MPs to retaining the 9 December 2010 start-date for the policy, it would be in the government’s best interests to consider making further adjustments before the Finance Bill 2020 reaches royal assent.

“With such strong cross-party opposition to the retrospective nature of the loan charge, the pressure increases on the government to go further than they currently plan to when amending the Loan Charge in the forthcoming Finance Bill,” said the APPG statement.

Ruth Cadbury, Labour MP and fellow Loan Charge APPG co-chair, said amending the policy now would help relieved pressure on those within its scope, who are now finding their ability to work under pressure because of the covid-19 coronavirus pandemic.

“This is a time of incredible worry for most people in this country for their loved ones, their neighbours and themselves, and many of our constituents—perhaps most of them—are facing catastrophic and even absolute loss of income,” she said.

“While this debate is wholly unrelated to the Covid-19 virus, for the victims of the loan charge scandal, who are already worried about their financial futures, the coronavirus outbreak only heaps more agony on top. The new suggested cut-off date of 9 December 2010 is based on the law being clear, yet we know now that this was not the case. If the law was clear then why did we need the loan charge and another change in legislation in 2016.

“I urge the government to listen to the strong opposition to this retrospective, unjust and unfair tax and, quite simply, to do the right thing,” said Cadbury.