Budget Representation 2021: Loan charge

Published on 6 October 2021

The Low Incomes Tax Reform Group (LITRG) is pleased to have the opportunity to make a Budget Representation 2021 in relation to the loan charge.

Illustration of a man standing and a person sitting on a cog next to a pile of money

Our understanding is that a significant number of people have still not met their obligations (either at all, or fully) with the loan charge. Some of these people may have made a choice (either alone or following advice) not to do so, but that will not be the case for everyone.

While there are several inter-related problems leading to people inadvertently failing to meet their obligations, these are caused by two main factors:

  • HMRC are unable to segment loan charge cases into different groups based on underlying motivations, and tailor their approach accordingly.
     
  • There are a number of individuals who have been unable to take advantage of the Morse recommendations which were intended to ease the impact of the loan charge on individuals. This is compounded by HMRC’s actions at 1 above.

In our Budget Representation, we ask the Chancellor to consider pausing activity around the loan charge and to review the current loan charge situation. This should include an opportunity for external bodies/individuals to contribute evidence to the review. The review should critically assess the implementation and effectiveness of the Morse review recommendations as well as exploring options on how best to move forward with resolving outstanding cases.

The full text of the representation can be found here.

Contact: Meredith McCammond (click here to Contact Us)
(06/10/21)

 

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