Future Relationship with the EU

Stephen Metcalfe Excerpts

Tuesday 9th June 2020 Commons Chamber

[Penny Mordaunt]

We are very aware of the backdrop against which these negotiations are taking place. Hon. Members will not have long to wait before they learn more about border operations, but in many of the areas that the hon. Gentleman mentions, we have made progress, and that progress is in the public domain. In other areas, we are simply asking for a reciprocal relationship for things that we currently do for other nations.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

As we begin to recover from the coronavirus, while a deal would be very welcome, does my right hon. Friend agree that the UK needs as much flexibility as possible to help rebuild our economy and communities, and that remaining bound by EU law during this time would not allow us to do that?

[Penny Mordaunt]

My hon. Friend is absolutely right; we have left the EU. At the end of this year, we will be a fully independent and sovereign nation. Our interests are best served by having that flexibility with rest-of-the-world trade and with the choices we make about our trading arrangements with others, as well as the EU. That is the basis of our negotiating position and it is one that we will hold to.

The Economy

Stephen Metcalfe Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

At this point, it is very difficult to make changes to the operation of these schemes; that would just delay further payment. For those workers who have fluctuating wages—for example, those on zero-hours contracts—we have provided employers and employees with the ability to take either the most recent time period and look at that over a year before, if they were seasonal, or to take an average of their earnings over a period, to ensure that they are not inadvertently penalised by a shorter period of lower earnings. I think that that does provide flexibility and generosity to those who do not have fixed amounts of work.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

I thank the Chancellor for all he is doing to protect jobs and income at this really difficult time, and especially the introduction of the job retention scheme. However, he will be aware that many companies do not initiate a payroll run until the end of the month. This means that new starters in early March were paid for work they did in March but were then laid off because they are unable to access the furlough scheme. Will he review that and consider other evidence of employment?

[Rishi Sunak]

When we announced the job retention scheme, I said that it would apply to those who were known to HMRC on 28 February. That was how the scheme was designed and set up. Over the last few weeks, we have moved that date to 19 March, which brings an extra few hundred thousand people into it and means that overall, just shy of 30 million people in employment are able to benefit from the furlough scheme. It is an extraordinary achievement for the team in HMRC to have conceived that in this short space of time.

Loan Charge 2019: Sir Amyas Morse Review

Stephen Metcalfe Excerpts

Thursday 19th March 2020 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I, too, congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and others on securing this important debate, and thank the Backbench Business Committee for allocating the time. It may not be the most pressing issue that we are facing at the moment, but it does address the deeply held concerns of constituents caught up in this injustice; and I say “injustice” because I truly believe that that is what it is.

This debate is to look at the Morse review, which did have some welcome outcomes, but I do not believe for one minute that it went far enough. I believe that everyone has a duty and an obligation to pay their fair share of tax, and that anyone who evades tax should rightly be sought out and made to pay. But that is not what we are dealing with here. In many of these cases, we are dealing with ordinary people who were either forced or persuaded into schemes that they were advised were perfectly legitimate and approved by HMRC. And there lies the problem. By way of example, I will share with the House an account of one of my constituents who is caught up in this situation and is facing a bill for tens of thousands of pounds, and potential financial ruin. I know that the Government and HMRC have said that that will not be the outcome, but after looking at the details of his case, I assure the House that it would be.

My constituent is an intelligent individual, but by no means a tax expert. When he gave up his job in 2011, deciding to work freelance so that he could get a better work-life balance, he was advised to join a freelancer scheme—a scheme that was established and promoted by an ICAEW-regulated chartered accountant. The promotional literature unambiguously stated that the accountant’s scheme was

“anodyne, with no tax avoidance motive (HMRC words) involved”,

“legal and compliant” and

“supported by tax counsel’s opinion ”.

At no point did the chartered accountant mention any known or future possible risks, either verbally or in writing.

The chartered accountant simply positioned my constituent’s use of the scheme—through which he would receive a combination of salary and loans—as perfectly legal and an “effective tax planning tool”. That said, in mid-2012, having noted some adverse media coverage of the subject of tax avoidance, my constituent sought confirmation from the promoter that the scheme remained truly “anodyne”, as had been stated when he joined it. The promoter’s response was unequivocal—that nothing had changed.

Later in 2012, a copy of an HMRC letter addressed to the promoter and dated 20 June 2012 was forwarded to my constituent in validation of the chartered accountant’s previous assurances that the scheme was legitimate. The letter confirmed that for the purposes of mandatory disclosure under disclosure of tax avoidance schemes legislation, HMRC’s anti-avoidance group had formally reviewed the scheme and determined that it could apply no “hallmarks” of tax avoidance. Therefore, and of critical significance, HMRC stated that the scheme was “not disclosable”.

The unambiguous contents of HMRC’s letter gave my constituent absolutely no reason other than to conclude that its anti-avoidance group had undertaken a full, diligent review of the scheme and that, in the absence of any adverse findings, he could continue to use the scheme safely. But even then, as a cautious person, my constituent sought further confirmation from the promoter and was again reassured. Why would he not carry on using a scheme when he has sought so many reassurances? I restate: if HMRC had even the slightest concerns about the scheme’ legitimacy and/or my constituent’s use of it, its failure to openly communicate such concerns denied my constituent the clear and obvious opportunity to immediately depart the scheme in mid-2012.

As it is, HMRC notified my constituent in late 2013 that it had opened a formal section 9A inquiry into his use of the scheme, at which point he immediately ceased to use it. Regardless of that, to this day, more than six years after that section 9A inquiry into my constituent’s use of the scheme was launched, it remains open, and he has yet to receive any technical argument from HMRC as to why it considers the scheme unlawful.

It is very clear to me that HMRC sees the loan charge as a panacea for its historical and obvious failures. It is attempting to bypass my constituent’s basic right as a taxpayer to have a court rule on any alleged additional liability. We have heard from countless hon. and right hon. Members, and from esteemed independent tax practitioners, that HMRC must at the very least be forced to desist from using the loan charge to drive through these retrospective, unproven and ordinarily out-of-time claims, which predate the enactment of the Finance Act 2017.

I strongly agree with that viewpoint and feel that it would be undeniably unfair and entirely unreasonable to pursue people from before that date. Therefore, in the light of the uncertainties caused by the current situation with coronavirus and its effect on freelancer’s ability to work and earn at this time, may I please ask that the existing legislation be amended so that the loan charge is made prospective from 2017 onwards, which would remove at least one level of uncertainty for this important group of people at this very difficult time?

[Several hon. Members rose—]

Oral Answers to Questions

Stephen Metcalfe Excerpts

Tuesday 11th February 2020 Commons Chamber

[Sajid Javid]

I can tell the right hon. Gentleman that the announcement today was of £5 billion of fresh funding for local transport—buses and cycling. When it comes to cycling—something we all want made easier to access for all our constituents—there will be 250 miles of new dedicated cycle track.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T7. I know that the Government are committed to renewing and improving our national infrastructure. However, those improvements have to represent value for money. I therefore urge the Chancellor to question both the cost and effectiveness of the current proposals for a new lower Thames crossing and suggest that he re-examines both the business case and the alternative options.

[Sajid Javid]

I understand my hon. Friend’s concerns and he is right to raise this. He will be pleased that Highways England is conducting a supplementary consultation on the lower Thames crossing to make sure that any benefits are maximised. The consultation will close on 25 March, and I will then look at it carefully. I would encourage him to have his say.