Untenable to claim the law was clear according to Lord Morse, a 2010 loan fee reviewer, said

Five revelations overturning Morse’s “the law was clear since 2010” principle – which led to new rules for loan entrepreneurs, have been submitted to its author for his own review. .

Sir Amyas Morse, now Lord Morse, learns that in addition to the five signals that the law was unclear, two other “issues” related to his review require him to “search again” for a “resolution. “.

“Not implemented”

First, the HMRC intervened in the assignment of “independent” advisers to its December 2019 review, coloring the advice given, according to the Loan Charge Action Group.

Second, and effectively pushing the former head of the National Audit Office to resume his role as an inquisitor, his recommendations for HMRC “are not implemented”.

All three relate to developments since the journal’s publication in 2019, but clarity of the law (as Sir Amyas insisted then) occupies most of the 12 pages of LCAG.

“Five revelations”

He is informed by the five “revelations”.

First, in January 2019, HMRC CEO Jim Harra admitted he had “very little success” in obtaining legal analysis to understand the strength of HMRC’s ability to prosecute individuals. (Perhaps even more damning, Mr Harra, under pressure, admitted to the House of Lords Committee on Economic Affairs this year: “I’m not claiming the law has always been clear.”)

Second, that details of the legal cases allegedly publicly justifying the charge and the legal right to prosecute individuals were withheld by HMRC and redacted when released.

Third, the HMRC brought the charge because it had failed to win a case that allowed it to prosecute people on the grounds that the loans were income, and wanted to “prevent people from having the right to defend themselves in front of them. the courts, ”LCAG said.

‘Must be revisited’

Fourth, HMRC knows that agencies were liable for the tax in many cases, and it was left to a 2021 (Hoey) court case to decide that HMRC could not instead sue contractors in retrospect.

For the fifth ground undermining its conclusion that “the law was always clear,” LCAG told Lord Morse that HMRC itself hired contractors using schemes – and signed their tax returns.

“With these five key revelations – none of which were publicly known at the time you conducted your review – it is evident that the main conclusion of your report needs to be reviewed,” write LCAG founders Andrew Earnshaw and Steve Packham.

“The law was clear for some agreements, but was clearly neither clear nor set for these self-employment agreements. This is precisely why some advisers (including accountants) continued to recommend that people use (and in some cases switch to) devices that were not covered by the 2011 legislation.

“Parliament changed the law to catch the self-employed”

In their letter, the founders of LCAG continue: “This is also why the government and the HMRC sought to legislate and announced that they would do so in 2016, because they knew full well that the law was still NOT clear. for those types of arrangements that were not covered by the 2011 legislation.

“In fact, it was not until 2017 that Parliament amended the law to ensure that the self-employed would be affected by the use of loan programs. Thus, the law was clearly (and more importantly, legally) unclear – and only finally became clear and established by the Supreme Court in 2017. [at Rangers]. “

Keith Gordon QC, who is quoted in the LCAG letter to support his five-point argument to Lord Morse, has said on Twitter that he expects the former official to respond proportionately.

“Lord Morse will take the LCAG letter seriously”

“When I met Sir Amyas, as he was then, I thought he was a man of integrity,” the lawyer began in a tweet.

“So when his report was released I thought he had been misguided on the December 2010 point. If I am right on those two points I am sure he will take the letter from LCAG to serious and will reconsider its position.

In the letter, Lord Morse is asked to clarify any criteria he gave for appointing officials to his review, in light of an email showing a government source expressing reservations about the use of previous witnesses of the select committee.

“The spirit and no more suicides”

Lord Morse further learns that the “spirit” of his recommendations has not been taken into account; notably by the HMRC on “reasonable disclosure”, “voluntary restitution”, the three-year election, and by a trap which prohibits the request for reimbursement from any party not party to the original settlement.

In a section of the letter calling for a “fair resolution,” LCAG reflects: “All of the evidence presented in this letter and taken together means that, unfortunately, your review did not deliver what you wanted and certainly did not. solved the loan fees. question and the scandal associated with it.

“Based on the disclosure of all of this evidence, some of which was clearly accepted at the time of review, your key conclusion – that ‘the law was clear since December 9, 2010’ can no longer be reasonably justified or defended. “

Mr. Earnshaw and Mr. Packham of the group conclude by telling Lord Morse: it is likely that there will be more suicides if HMRC applies the loan fees as is.

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