Tommy Sheppard
Main Page: Tommy Sheppard (Scottish National Party - Edinburgh East)Department Debates - View all Tommy Sheppard's debates with the HM Treasury
(6 years, 1 month ago)
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Sir Edward Davey
I could not agree more. I have never seen people so distressed and distraught by one particular measure, which appears to target pain on just a few people. Those people work hard in our NHS, our industry, our schools and our civil service. Why do the Government want to target so much pain on so relatively few people? The charges involved are massive: hundreds of thousands of pounds. It is completely iniquitous. I believe the Minister knows that and I hope he will therefore put it right. Everyone in this House is clearly against tax scams; we want to close them down, but as other hon. and right hon. Gentlemen have said, people were advised by professional accountants and HMRC appeared to be happy. It was notified of the tax schemes and did nothing. Yes, let us crack down on tax avoidance, but let us not go after victims, the people simply trying to earn a living for themselves and their families.
Sir Edward Davey
I will in a second.
I might be the only veteran of the 1999 Finance Bill Standing Committee. I am happy for colleagues to correct me, but in those early days of my parliamentary career, I had the pleasure of sitting on nine consecutive Finance Bills that dealt with the early history of IR35. We had huge arguments then that that was wrong. There is an inherent issue that needs to be tackled, but what is proposed is absolutely not the way. HMRC has got to learn from history. It appears to me to be acting vindictively because it did not get its way a few years ago on IR35. Because people found legitimate ways around it, it is coming back and acting in an outrageously draconian way, and this House has to say no.
Tommy Sheppard
I am grateful, because I concur entirely with the point that the real villains are the companies that mis-sold the schemes in the first place—at times, for fees that can only be considered usurious. My constituent paid £138,000 in fees over three years to a company called AM Limited, which has changed its name but is still trading and registered in Panama. If HMRC were to assist my constituent in trying to recover that money, he would be much better able to pay his retrospective tax liability.
Mr Hayes
I have answered many debates in this Chamber as a Minister of various Departments, and I tell the Minister, who is a good and honourable man, that when this many hon. Members from both sides of the House come together in a single cause, he had better take action. The writing is on the wall and he has to respond. I know he will take that piece of sound advice in the spirit that it is offered to him.
I will briefly make three recommendations and then draw my remarks to a rapid conclusion. First, I would like the Minister to tell us what further impact assessment has been made by scale and detail on the families affected by the measures. Secondly, I would like him to give us an estimate of how many people who cannot or will not pay will be driven to bankruptcy, and what effect that will have on the Treasury’s revenue calculations on the matter. Thirdly, as I have already said twice—I make no apology for amplifying it—I would like him to tell us what steps he is taking in respect of the architects and advocates of the schemes, who have done so much damage.
I have no doubt that being a Treasury Minister is about churning figures, but it is also about changing lives. This matter affects the wellbeing of large numbers of our constituents. Families will be blighted and faith in fairness will be ruined. The Minister—an honourable gentleman, a good Treasury Minister, a valued colleague and friend—needs to see the writing on the wall and take action. Woe betide those who do not. They will rue the day that they failed to listen to the voices that have been aired today.
Tommy Sheppard
Will the Minister confirm, either now or in any such letter, the Treasury’s objectives in pursuing those companies? Is it to take retrospective action against them to try to recover the great volume of money they received from selling those schemes?
John Glen
HMRC’s objective will be to secure the money owed, as per the rules of the tax system. HMRC has enormous power to levy charges of up to £1 million on those individuals who are not complying.
The schemes may have involved provision of a loan with no intention to repay it. The recipients of such payments enjoyed them no differently from the way any of us use our normal income. As such, in the eyes of HMRC, the payments have always been taxable.
I have acknowledged the comments of colleagues who said that the charge on disguised remuneration loans will apply to loans that were made as far back as 1999. It is fair to say that the schemes were never permitted. They were defective, going back to then.