A cross-party group of MPs has forced the government to agree to a review of the Loan Charge. Conservative Whips attempted to coerce MPs into line, but despite their efforts many backbenchers made it clear that they intended to support a call for a review of the Loan Charge. The DUP also supported the call for a review, leaving the government with few supporters.
A cross-party amendment to the Finance Bill had been tabled by Sir Edward Davey MP. The amendment called for a review of the controversial Loan Charge. The amendment was signed by 38 MPs from all parties and more MPs later came forward to support the amendment. Only the Treasury Minister Mel Stride was left defending the Loan Charge.
If the Loan Charge went ahead as planned, it would have affected many tax payers who have submitted their tax returns every year, with no challenges from HMRC at the time of submission. Despite this, they could still be faced with massive tax bills which they would be unable to pay and would not be able to appeal at a court or tribunal.
The success of the amendment now means that the government will have to review the charge before the end of March. The MPs supporting the amendment want to remove the retrospective element of the Loan Charge.
Sir Edward Dewey said: “This review is about an important tax principle. The Government are in effect in breach of the rule of law with the retrospective nature of their loan charge. And the unfairness of that has brought misery to thousands of people.”