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Jim Harra, HMRC chief executive and permanent secretary, has rejected claims made by the all-party parliamentary group (APPG) on the loan charge that HMRC misled people with a recent press release on loan charge fraud arrests.
The release highlighted that four men and one woman had been arrested on suspicion of fraud in connection with promoting arrangements designed to circumvent paying the charge. In a letter to Mr Harra, Sir Edward Davey MP, chair of the group, said the APPG was ‘concerned and disappointed that the HMRC press release … suggests it is about so-called “disguised remuneration” and gives the misleading impression that it is of promoters of schemes subject to the loan charge, for promoting/selling such schemes, when this is not the basis for the arrests’.
He said the press release gave the ‘false impression that HMRC are acting against promoters of the loan schemes that have left thousands of people facing huge bills. Such promoters have still faced no action and there have been no arrests, no prosecutions and no convictions for promoting the loan schemes now subject to the loan charge.
‘The language in the press release also talks about people being caught up in tax fraud, which is criminal, and at the same time repeats HMRC’s usual line about loan schemes being “too good to be true”. So while these arrests are not for the selling of loan schemes, the press release gives the general impression that they are. The conflation of these things may assist HMRC covering up their complete lack of action against promoters of loan schemes, but is unhelpful and also dangerous.’
On the criticism about the warning in the release for people to ‘think extremely carefully before they enter into any scheme that claims to significantly lower your tax bill. If something looks too good to be true, then it almost certainly is’, HMRC said it wanted to protect the public from schemes that, at worst, could result in them ‘being involved in fraud’.
In his letter, Sir Ed said the use of this kind of language created the impression that loan fraud victims were criminals.
Refuting the allegations, Mr Harra wrote: ‘In view of the seriousness of the latest unfounded allegations that the APPG has made against HMRC, I assume you will want to bring this response to the attention of APPG members and will arrange for it to be published on the APPG’s website.’
The APPG letter urged HMRC ‘to take any action it can against schemes that claim to get around the loan charge and also on the recall of loans, which is something now facing many people’.
