Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 29th January 2019 Commons Chamber

[John Glen]

I very much recognise the risks associated with no deal. That is why the Government are very clear, as the Prime Minister will set out shortly, about the imperative for the House to come behind the deal and vote for it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

13. If he will take steps to prevent the 2019 loan charge from being applied retrospectively.

[The Financial Secretary to the Treasury (Mel Stride)]

The loan charge is not retrospective. The schemes that were entered into and to which the loan charge relates have always been defective—they never worked, including at the time when they were entered into. That has been evidenced by a number of court cases, including one put before the highest court in the land, the Supreme Court.

[Mr Carmichael]

Her Majesty’s Revenue and Customs is allowed to go back to 1999 to look at tax records. Records that it can look at include those in otherwise closed years. If that is not retrospective, I do not know what it is. What word would the Minister use to describe the loan charge to my constituent, who tells me that he started a business working in the oil and gas industry, living in Orkney but working across the globe, doing everything the Government would want him do? How does he now find himself facing bankruptcy, before his 29th birthday?

[Mel Stride]

An important principle lies at the heart of the whole debate around the loan charge, which is that individuals should pay the tax that is due. If they enter into arrangements that basically mean they disguise income as a loan that they have no intention of ultimately repaying—money that is, more often than not, routed via low or no-tax jurisdictions overseas, via a trust, then brought back into the United Kingdom by way of payment—the Government believe that that is wrong, and the tax should be paid.