Andrew Gwynne, MP for Denton and Reddish, has expressed disappointment that amendments to the Finance Bill aimed at addressing injustices relating to the Loan Charge and IR35 have been voted down by the Government and is urging the Government to rethink.
The Loan Charge was introduced in the 2016 Finance Act and came int effect in 2019. It aims to tackle a type of employment tax avoidance the authorities call “disguised remuneration”, where workers were paid through a loan.
Any loans taken out in such circumstances since 1999 and still outstanding on 5 April 2019 became taxable as income in one go on that date, meaning some people were left with 20 years of tax bill due at once. Some caught up in the Loan Charge scandal were misled or coerced into being paid in this way and now face hefty repayments.
The IR35 reforms to off-payroll working rules, that will see many contractors, freelancers and locum workers classed as “deemed employees” and forced to pay extra taxes as an employee, but without receiving any of the benefits and rights of employment.
Gwynne cosigned a number of cross-party amendments to the Government’s Finance Bill to address injustices relating to the Loan Charge and IR35, but these were either not selected or voted down by the Government.
Andrew Gwynne said:
“I was really disappointed that the Government voted down our cross-party amendment to delay IR35 and the SNP amendment to review the Loan Charge.
“I would also have liked the more robust cross-party Loan Charge amendment which I cosigned to have been voted on and was disappointed that it wasn’t selected.
“These injustices are affecting thousands of people and the Loan Charge has already forced many into real hardship through no fault of their own.
“It’s vital that we address tax avoidance, but both of these schemes have been very poorly designed and implemented, and the Government need to urgently pause and review both.”