Loan Charge Nightmare.
Nothing can be said of the Loan Charge that hasn’t already been said but I will say one thing.
HMRC has admitted that although it was charged by the government to clamp down on the providers of tax avoidance schemes, the department could not ‘break through’ the corporate structure of the loan scheme providers or the trust and other structures being used by them.
So instead HMRC opted for disrupting the market by transferring debts to the users of the schemes, and this tack has worked in much the same way as the Managed Service Company legislation, which got rid of the providers of composite company schemes around ten years ago.
Never again will taxpayers be able to rely on assurances by tax professionals on tax saving schemes, even those backed by QC opinion, because every one could be flawed and so represents a risk.
Annoyingly, the introduction of the legislation that has brought misery to thousands could have been predicted long ago, so why didn’t HMRC do more to warn taxpayers before they fell into the trap – and their own personal nightmare?