Restrictions to the charge are welcome, but the question still arises why there should be any retrospection at all.
There were some good tidings of comfort and joy on this subject just before Christmas which were extremely welcome.
A good deal has been written about the loan charge (and in particular the excellent article by David Pett which explains in detail the main features of the proposals). The draft legislation has now been published which makes the proposals a little clearer – but only a little. I do not want to add unnecessarily to the commentary on this matter but merely to highlight one particular issue.
Briefly stated, Sir Amyas Morse was appointed by the Treasury in September to conduct an independent review into the highly controversial loan charge. This came into force on 6 April 2019 and imposed a new charge on that date, on loans to employees which had been made during the previous 20 years. It cannot seriously be argued that this is not retrospective taxation; if the loans were taxable when they were made then they would (or should) have been taxed at the time.
If such retrospection were suggested in any other branch of the law, it would be met with howling outrage and condemned by everybody; but if you say the magic word ‘tax’, it somehow becomes acceptable
Sir Amyas’s report was published on 20 December and confirmed that HMRC had gone overboard overriding taxpayers’ statutory protections, and gave a list of recommendations.
HMRC accepted many of the recommendations and immediately announced a number of measures, principally that the loan charge will not apply to loans taken out before 9th December 2010. Nor will it apply to loans between 9 December 2010 and 5 April 2016 which had been fully disclosed and which HMRC had failed to challenge.
This is obviously welcome, but the question still arises why there should be any retrospection at all. If a retrospective charge back to 1999 was unacceptable as it overrode taxpayers’ statutory protections, why is a retrospective charge back to 2010, or even back to 2016, not equally unacceptable.
If such retrospection were to be suggested in any other branch of the law, it would be met with howling outrage and condemned by everybody; but if you say the magic word ‘tax’, it somehow becomes acceptable – particularly to everybody who does not have to pay it. A tax imposed on somebody else will always be universally popular.
It is a pity that the next World Cup is not going to be in the UK. After every game, the government could retrospectively change the rules to disallow all our opponents’ goals and a glorious victory would be ours.
Restrictions to the charge are welcome, but the question still arises why there should be any retrospection at all.
There were some good tidings of comfort and joy on this subject just before Christmas which were extremely welcome.
A good deal has been written about the loan charge (and in particular the excellent article by David Pett which explains in detail the main features of the proposals). The draft legislation has now been published which makes the proposals a little clearer – but only a little. I do not want to add unnecessarily to the commentary on this matter but merely to highlight one particular issue.
Briefly stated, Sir Amyas Morse was appointed by the Treasury in September to conduct an independent review into the highly controversial loan charge. This came into force on 6 April 2019 and imposed a new charge on that date, on loans to employees which had been made during the previous 20 years. It cannot seriously be argued that this is not retrospective taxation; if the loans were taxable when they were made then they would (or should) have been taxed at the time.
If such retrospection were suggested in any other branch of the law, it would be met with howling outrage and condemned by everybody; but if you say the magic word ‘tax’, it somehow becomes acceptable
Sir Amyas’s report was published on 20 December and confirmed that HMRC had gone overboard overriding taxpayers’ statutory protections, and gave a list of recommendations.
HMRC accepted many of the recommendations and immediately announced a number of measures, principally that the loan charge will not apply to loans taken out before 9th December 2010. Nor will it apply to loans between 9 December 2010 and 5 April 2016 which had been fully disclosed and which HMRC had failed to challenge.
This is obviously welcome, but the question still arises why there should be any retrospection at all. If a retrospective charge back to 1999 was unacceptable as it overrode taxpayers’ statutory protections, why is a retrospective charge back to 2010, or even back to 2016, not equally unacceptable.
If such retrospection were to be suggested in any other branch of the law, it would be met with howling outrage and condemned by everybody; but if you say the magic word ‘tax’, it somehow becomes acceptable – particularly to everybody who does not have to pay it. A tax imposed on somebody else will always be universally popular.
It is a pity that the next World Cup is not going to be in the UK. After every game, the government could retrospectively change the rules to disallow all our opponents’ goals and a glorious victory would be ours.
