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Edm 1239 - the 2019 loan charge

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    Edm 1239 - the 2019 loan charge

    Hi

    Does EDM 1239 carry any weight when comes to changing the retrospective loan charge law , as on https://www.parliament.uk/edm , I can see lots of EDM's with much higher signatures numbers then EDM 1239.

    Thanks..
    Dharmin

    #2
    EDM 1239 - Weight of Signatures

    Hi Dharmin,

    I was looking at this too. The MP signatures have recently been updated to 72. There are 650 MPs in all, but I think not all of them are free to sign EDMs. There have been a lot of EDMs. Most of them only generate a few signatures, and those which do generate more, often get briefly discussed and dismissed in parliament. I don't say this out of defeatism, but that is simply how it works. EDMs don't provide much in the way of political leverage, but they are useful for more widely publicising an issue with MPs. If that gets around the Treasury's boilerplate response to queries and complaints about the draconian nature of the 2019 Loan Charge and its impact on families, then it is doing its job.

    There is some kind of early momentum building up around the EDM (MPs are now looking into it individually, or they wouldn't be signing up), and also around the public petition to remove the 20 year retrospection aspect of the Loan Charge. At just under 2500 public signatures, this one is kind of smouldering rather than fully lit as yet. Which suggests to me that public attention is still in the domain of this being primarily an IT contractors' problem, and even then affecting a smaller sub-section of the contractor community that used Loan Scheme arrangements.

    Those who stayed with limited company set-up might be in for a shock later, however. Already, HMRC have hinted at applying IR35 retrospectively to historical contracts in the Public Sector (No wonder they don't want to add MOO criteria specifically into the CEST tool). So anyone and their family who is remotely concerned about that, should be signing the 2019 Loan Charge public petition and also lobbying their local MP to sign up to EDM 1239. Same for Private Sector contractors and their families, which is where the HMRC tentacles would stretch next.

    The only possible leverage we have with HMRC is through changing public perception of this issue, and bringing pressure to bear on MPs, sufficient that the government knows the political (votes) fallout is too dangerous for them to continue allowing HMRC to swing their wrecking ball. I think that kind of focused will only comes when all those affected and their families and friends (maybe even end-clients who benefit from not paying employers' overheads) also get behind the public petition and EDM.

    The LCAG Loan Charge Action Group is doing some good work, with regard to stoking this kind of pressure. But HMRC seems so well-insulated from effective criticism. I can't help wishing that they could be seen to land a few more, good solid haymakers on HMRC. Something like a Question Time debate or even a John Pilger documentary on the state of freelancing in the UK economy that looks at the wider history leading to recent legislation.

    Make no mistake that government really wants this money that has been promised them by HMRC in return for all these new powers - especially retrospection. That will take some concerted pressure to head off. Not impossible if we have their measure and can exceed the political intention to carry this through the protests.

    What do you think?


    GHD

    Comment


      #3
      Originally posted by Groundhogdays View Post
      Make no mistake that government really wants this money that has been promised them by HMRC in return for all these new powers - especially retrospection. That will take some concerted pressure to head off. Not impossible if we have their measure and can exceed the political intention to carry this through the protests.
      I think you will find the retrospective debate was lost in 2008. The last challenge to that failed in 2015.

      The retrospective element of the LC is less clear as it deals with outstanding loans. Nevertheless HMRC waited 15+ years to do anything about loans which is totally wrong. And all the burden falls on the end user. When will HMRC tackle promoters/advisers?

      However those who think they are unaffected by LC should be very careful. What cojak terms "the future of contracting" is just getting going.

      Please don't be like the LC people in 2008. "It doesn't affect me so not our problem". HMRC think contractors are glorified typists and are coming for all of us.

      Comment


        #4
        EDM 1239 - Signatures

        Originally posted by Groundhogdays View Post
        Hi Dharmin,

        I was looking at this too. The MP signatures have recently been updated to 72. There are 650 MPs in all, but I think not all of them are free to sign EDMs. There have been a lot of EDMs. Most of them only generate a few signatures, and those which do generate more, often get briefly discussed and dismissed in parliament. I don't say this out of defeatism, but that is simply how it works. EDMs don't provide much in the way of political leverage, but they are useful for more widely publicising an issue with MPs. If that gets around the Treasury's boilerplate response to queries and complaints about the draconian nature of the 2019 Loan Charge and its impact on families, then it is doing its job.

        There is some kind of early momentum building up around the EDM (MPs are now looking into it individually, or they wouldn't be signing up), and also around the public petition to remove the 20 year retrospection aspect of the Loan Charge. At just under 2500 public signatures, this one is kind of smouldering rather than fully lit as yet. Which suggests to me that public attention is still in the domain of this being primarily an IT contractors' problem, and even then affecting a smaller sub-section of the contractor community that used Loan Scheme arrangements.

        Those who stayed with limited company set-up might be in for a shock later, however. Already, HMRC have hinted at applying IR35 retrospectively to historical contracts in the Public Sector (No wonder they don't want to add MOO criteria specifically into the CEST tool). So anyone and their family who is remotely concerned about that, should be signing the 2019 Loan Charge public petition and also lobbying their local MP to sign up to EDM 1239. Same for Private Sector contractors and their families, which is where the HMRC tentacles would stretch next.

        The only possible leverage we have with HMRC is through changing public perception of this issue, and bringing pressure to bear on MPs, sufficient that the government knows the political (votes) fallout is too dangerous for them to continue allowing HMRC to swing their wrecking ball. I think that kind of focused will only comes when all those affected and their families and friends (maybe even end-clients who benefit from not paying employers' overheads) also get behind the public petition and EDM.

        The LCAG Loan Charge Action Group is doing some good work, with regard to stoking this kind of pressure. But HMRC seems so well-insulated from effective criticism. I can't help wishing that they could be seen to land a few more, good solid haymakers on HMRC. Something like a Question Time debate or even a John Pilger documentary on the state of freelancing in the UK economy that looks at the wider history leading to recent legislation.

        Make no mistake that government really wants this money that has been promised them by HMRC in return for all these new powers - especially retrospection. That will take some concerted pressure to head off. Not impossible if we have their measure and can exceed the political intention to carry this through the protests.

        What do you think?


        GHD

        Till now we have 11% of MP signatures on EDM 1239 , is that enough to trigger discussion in Parliament ?

        I know LCAG Loan Charge Action Group are doing great work but is that making any affect on HMRC , as have not seen any postings/replies from HMRC related to LCAG actions on either Twitter or this forum , unless I have missed.

        Comment


          #5
          Some good points GHD
          HMRC is off the leash and no course of action is off the table. I'm not sure what the purpose of having any statutory or tax common law is if it can be retrospectively updated.
          Time will tell re these efforts but they are certainly not doing any harm and any contact with your MP is helpful.
          The pattern is simple - anyone rational who is walked through the issue, its history its causes etc can see the inequity and your MP is no different.
          Last edited by QCApproved; 11 July 2018, 16:05.

          Comment


            #6
            Originally posted by GreenMirror View Post
            The retrospective element of the LC is less clear as it deals with outstanding loans.
            Only if you follow HMRC's warped (and incorrect) definition of 'outstanding'.

            Comment


              #7
              2019 Loan Charge and Realistic Strategy

              Originally posted by GreenMirror View Post
              I think you will find the retrospective debate was lost in 2008. The last challenge to that failed in 2015.

              The retrospective element of the LC is less clear as it deals with outstanding loans. Nevertheless HMRC waited 15+ years to do anything about loans which is totally wrong. And all the burden falls on the end user. When will HMRC tackle promoters/advisers?

              However those who think they are unaffected by LC should be very careful. What cojak terms "the future of contracting" is just getting going.

              Please don't be like the LC people in 2008. "It doesn't affect me so not our problem". HMRC think contractors are glorified typists and are coming for all of us.


              Green Mirror,

              I understand where you're coming from and don't disagree.

              Sometimes you can't stop something outright, but you can somewhat divert or deflect its trajectory if you can find a point of leverage. How might that play out with the 2019 Loan Charge? Maybe better time to pay terms can be negotiated for those in the most need. Or for the most desperate, the charge could be deferred and taken out of a person's estate at death, as IHT (instead of hammering them in one consolidated tax year). Part of paying off the loan for some contractors might even involve a form of community service, whereby they could work on public sector projects (NHS, etc.) where there is now a dearth of contractors thanks to IR35. Say, if this was one or two days per week, then that would still allow most of their free time for the day job. No doubt that sounds excreable at first, but is better than the current prospect of total financial wipeout.

              My point is to try and suggest alternatives to a risky war of political attrition for which we are not well matched and do not hold the high ground. There might not be enough time to see through the current course of action before April 2019, unless there are one or two juicy tribunal cases waiting which can throw a spanner in the works. But even then, it is hard fighting an opponent who has the power to both time travel and move the goalposts, as we have seen (I know I should keep away from football clichés after England's defeat).

              Does anyone have more ideas which would realistically have a chance of being taken up by government and/or HMRC? Something they wouldn't necessarily reject out of hand, but might value as useful for political capital, nearly as much as the money they are hoping to grab?

              I must say that incoherent rants at HMRC do concern me (much as I can empathise), as it shows them how helpless the contractor community is feeling in the face of their 'winning strategy' and that all they have to do is to keep their nerve and stick to the Behavioural Insights script. That is not a position of strength from which to negotiate.

              Would love to hear others' thoughts on this.

              Comment


                #8
                Effectiveness of 2019 Loan Charge Pushback

                Originally posted by QCApproved View Post
                Some good points GHD
                HMRC is off the leash and no course of action is off the table. I'm not sure what the purpose of having any statutory or tax common law is if it can be retrospectively updated.
                Time will tell re these efforts but they are certainly not doing any harm and any contact with your MP is helpful.
                The pattern is simple - anyone rational who is walked through the issue, its history its causes etc can see the inequity and your MP is no different.


                My MP is has a woeful record on responding to EDM requests. This one is no exception and I have emailed three times to no avail. The next thing is to arrange a surgery meeting and see what gives. You may be right, and she may yet engage with this upon understanding the background.

                Comment


                  #9
                  best to get inf front o her if you can give
                  We may have a resurgent UKIP next year so we'll see how keen some of these conservatives who are backing a counter conservative policy to drop votes

                  Comment


                    #10
                    MPs' Response to EDM 1239 - Labour as Biggest Supporter for Scrapping Retrospection

                    Originally posted by QCApproved View Post
                    best to get inf front o her if you can give
                    We may have a resurgent UKIP next year so we'll see how keen some of these conservatives who are backing a counter conservative policy to drop votes
                    Out of curiosity, I was looking at the breakdown of cross-party support for EDM 1239. Lib Dems who kicked it off are on 10, Tories and DUP (whose government introduced the 2019 Loan Charge legislation) are at 13 and 6 respectively, Plaid Cymru have 3 and Greens a lone MP. That leaves Labour far and away the biggest supporter of the EDM, with 40 signatures to date. It seems that of all the political tribes, they have realised how employers, intermediaries and scheme providers are being given a free ride at the expense of the scapegoated ordinary freelance workers. Perhaps they also get the whole IR35 debacle and what this is going to mean for the flexible economy as a whole. One can hope that some significant opposition will come out of all this. The question is whether it will come in time, before April 2019 when the damage is done?

                    Comment

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