Campaigors described the government’s loan fee review as ‘pretense’

The government promised independent review of the loan fee, but faced criticism from the campaigners, who dismissed it as “showing”.

The loan fee was implemented for removing tax flaws and recovery of taxes with previous date, but many freelance workers are facing large bills.

In a statement on Thursday, Treasury Minister James Murray said that the review would look into the obstacles that will “prevent the money from reaching the solution with HMRC and recommend methods that can be encouraged to do so”.

However, it will not reconsider the government’s status that the loan fee is appropriate.

This has inspired the Loan Charge Action Group to dismiss the review as “pretense” and “complete betrayal”.

The group’s founder Steve Packham said, “The announcement that the government has made today is not at all reviewed, as it does not include surprisingly credit fee review.”

He said that the review failed to see how HMRC set a loan fee and who operated and promoted tax rescue plans.

In 1999, the then labor government introduced IR 35, a tax law that demanded several self-employment freelance workers to be classified as employers, meaning that they would have to pay national insurance.

Later thousands of people signed schemes promoted by lawyers and accountants, allowing them to avoid paying national insurance legally.

It usually consists of freelancers who give money to offshore companies, who give them back loans without expecting loans.

After the government discontinued this flaw, the Treasury used a loan fee to ask freelancers to pay backdated tax.

HMRC estimates that around 50,000 people are affected by the loan fee.

Announcing a review of the loan fee, Treasury Minister James Murray said: “The government believes that people who have not paid the correct amount of income tax and national insurance, along with HMRC It is necessary to solve your affairs.

“Otherwise acceptance would be contrary to court decisions and most of the taxpayers who have never used these schemes.”

However, he said that there was concern about the fee, especially the size of some payments and whether people were able to pay “in the appropriate time frame”.

He said that the purpose of the review was “to close the case or spread it to the affected people; ensure fairness for all taxpayers; and must ensure that proper support for people under loan fee exists”.

It will be operated by Ray McCan, former chairman of the Chartered Institute of Taxation, who is expected to report until summer.

Conservative MP Greg Smith and Loan Charged All Party Parliamentary Group (APPG) co-chairman said the review was announced “a pretense”.

He said, “This is not a review that was promised nor a review which is in dire need and the APPG will continue to emphasize the actual investigation of the scam.”