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Sat, 15 August 2020

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MPs accuse Treasury and HMRC of 'inappropriate interference' with Loan Charge probe after promise to ‘line up the beers’ revealed

MPs accuse Treasury and HMRC of 'inappropriate interference' with Loan Charge probe after promise to ‘line up the beers’ revealed

MPs have hit out at the Government over 'interference' into the review

3 min read

MPs have accused the Treasury and HMRC of "clear and inappropriate interference" with an independent review into controviersial Loan Charge scheme.

It comes after the Loan Charge all-party parliamentary group claimed that new documents show an "inappropriately close relationship" between Government officials and staff working on the independent Morse Review into the controversial tax scheme.

The charge, which sought to restrospectively recover funds from contractors and freelancers who used so-called disguised renumeration schemes, has been linked with seven suicides and left as many as 50,000 people facing significant tax bills.

The review - led by former public spending watchdog chief Sir Amyas Morse - attacked ministers ministers for failing to get the right balance between "tackling tax avoidance and protecting the rights of taxpayers".

But it concluded the law was "clear" on the use of the renumeration schemes from 2010.

MPs from the all party group claim that new documents obtained under Freedom of Information undermine the findings of the review, saying the disclosure proves its conclusions were "unsound".

In a new report, the group published exchanges between a member of the Review Team staff and the Chancellor's press secretary in which they discussed handling press enquiries about the probe.

Accepting the offer to help the Review team, the senior Treasury official added: "Cool. Yes we can help. You owe us beers."

The Review staff responded: "Great, really appreciate it. And happy to line up the beers."

And the group alleged the Treasury and HMRC had been given "privileged early access" to the report's conclusions while other interested parties were not given the same opportunity.

MPs said the conversations proved the review had failed the "basic tests" of independence.

Lib Dem MP Ed Davey, the co-chair of the group, said: "There was a clear attempt by HMRC and the Treasury to interfere and to direct it from start to finish.

"We make clear we make no criticism of Sir Amyas Morse, but his review was set up in such a way so as to make an independent review impossible."

He added: "There was clear and inappropriate interference from the two Governmental bodies which were being reviewed.

"The flawed conclusion of the review must be rejected and Parliament must seek to resolve the Loan Charge Scandal properly."

Meanwhile, Labour co-chair Ruth Cadbury said: "We now know that the Chancellor's own press secretary was involved in dealing with press enquiries to the review and that there was an inappropriately close relationship between the review Secretariat team, made up of Treasury and HMRC staff, and the Treasury and HMRC, whose policy the review was scrutinising.

"This shatters any illusion of genuine independence and the fact is that this review fails even basic tests of how an independent review should operate."

Responding to the comments, Sir Amyas Morse, said: “My independent review of the Loan Charge represented my own judgement following the evidence that I heard – including over 700 individual impact statements.

"My 20 recommendations included the need for both significant changes to the Loan Charge, and to HMRC’s future approach for combatting tax avoidance.

"My conclusions speak for themselves, and show that I was independent of government."

He added: "Any suggestion that I was (or could have been) unduly influenced by the civil servants who supported me ignores that the report is my own, and my ten years of experience at the National Audit Office in holding government to account."

A government spokesperson said: “As these documents show, the Independent Loan Charge Review was fully independent of government. Its recommendations led to significant legislative changes.

“Sir Amyas had complete independence and full discretion over how the review was run, which stakeholders and individuals it engaged with and the content of the final report.”

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