Sir Amyas Morse, the former Chief Executive of the National Audit Office (NAO), will head up an independent review into the controversial loan charge, which will be published by the middle of November.
The review, which was commissioned on 11 September by Chancellor Sajid Javid, will consider whether the policy is an ‘appropriate way of dealing with disguised remuneration loan schemes’.
The loan charge, which came into effect on 6 April this year, added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs by 5 April. The charge mainly affects freelancers and agency workers. However, many of the 50,000 people caught up in the issue are low paid, and were persuaded by their employers to join the schemes. The typical sum owing, according to the Loan Charge Action Group (LCAG), is almost £120,000.
Commenting on the issue, Jesse Norman, Financial Secretary to the Treasury, said: ‘Everyone should pay their fair share of tax. These disguised remuneration schemes are highly contrived attempts to avoid tax, but it is right to consider if the loan charge is the appropriate way of tackling them. The government fully appreciates the concerns expressed by individuals, campaigners and MPs who have raised concerns about the loan charge, and the Chancellor has . . . appointed Sir Amyas Morse to lead an independent review of the policy.’
While the review is under way, the loan charge remains in force and HMRC is due to set out in more detail how the review will affect the individuals involved.