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11 September 2019

Loan Charge review leaves sole traders shrouded in uncertainty

Responding to the announcement that the Treasury has appointed Sir Amyas Morse to lead independent an review of the Loan Charge, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:

“While it’s encouraging to see the Government doubling down on its commitment to a review of the loan charge – telling sole traders that they’ll have an update on where they stand as late as November, with then potentially only two months to settle-up, is unreasonable. And especially so in such an uncertain and unpredictable climate.     

“The loan charge is causing misery for thousands of sole traders – many of whom were acting on the advice of employers or financial professionals when they agreed to schemes which were, at the time of participation, perfectly legal.   

“A lot of these people are not financial experts or high earners. There are individuals being targeted here who could lose everything. The priority must be intervening to protect those who were following professional advice or guidance from employers or third parties.

 “Interventions like the loan charge make it impossible to plan for the future. Many who are playing fair when planning their tax affairs today will be wondering where else the Government might suddenly change the rules, start applying new laws to years past and demand big pay-outs.

“In future, HRMC should establish a tax efficiency white list, guaranteeing that – if the scheme is listed – you have cast iron protection form a retrospective grab if you use it.”