Ross Thomson Loan Charge Petition. MP Says Suspend it for Contractors

Ross Thomson Loan Charge Petition
Ross Thomson Loan Charge Petition

Ross Thomson Loan Charge Petition

Many contractors are signing the Ross Thomson Loan Charge Petition which he has opposed in Parliament. It has caused many contractors to become bankrupt and some have even committed suicide. Yet what the contractors did was legal at the time they did it. It may have been tax avoidance but it wasn’t tax evasion. Ross Thomson says it is a retrospective charge.

Contractor Loan Charge Questions

  • Who is Ross Thomson?
  • What is the Loan Charge?
  • How does the loan charge affect contractors?
  • Why does Ross Thomson Oppose the Loan Charge?
  • Why does Conservative MP, Bob Neill, oppose the loan charge?
  • How can contractors sign the Ross Thomson Loan Charge Petition?

Who is Ross Thomson

Ross Thomson is a Scottish Conservative MP. He won the Aberdeen South seat for the Conservatives. It was the first time they had won the seat since the 1992 general election. Prior to that he had been a Conservative MSP in the Scottish parliament. Before that he had been a trainer in Debenham’s department store.

What is the Loan Charge

Loan schemes were used by contractors to avoid paying income tax and national insurance.

Contractors who use these schemes would have their salary paid in loans, instead of being paid in the usual way. These loans are paid to people in such a way that means it’s unlikely that they’ll ever have to be repaid. In other words, the person receiving money from a loan scheme gets to keep it all. They would not pay any tax on this money,

The loan charge works by adding up all outstanding loans and taxing them as income from just one year. That means that you would be taxed at a much higher rate than you would have been previously.

How Does the Loan Charge Affect Contractors

Around 50,000 freelancers will be hit by it. Those are mainly IT contractors, management consultants and financial advisors. Freelancers who used loan schemes were given three options

  • Repay the original loan
  • Agree a settlement with HMRC
  • Pay the loan charge when it comes into effect

The loan charge now has come into effect. It came into effect in April 2019.

Why Does Ross Thomson Oppose the Loan Charge

He said in Parliament ” what is unacceptable is introducing a new charge & making it retrospective on something that was legal. It’s forcing people into bankruptcy. My constituents have been impacted by this unfair measure, it’s causing unmeasurable distress & I’ll oppose it.

Indeed some freelancers have committed suicide after getting tax bills way beyond what they could hope to pay.

Why Does Conservative MP Bob Neill Oppose the Loan Charge

Another Conservative MP, Bob Neill, is opposing it too. He says it should be suspended and an investigation started. He opposes it for three reasons:-

  1. Firstly, it is clear that HMRC knew about these schemes for years and did nothing about them at the time.
  2. Secondly, it is also clear that very many of these people had acted in good faith, based on advice from respectable professional advisers. They were sometimes supported by legal advice from QCs.
  3. Thirdly, despite protestations to the contrary, the evidence shows that whilst HMRC have been draconian in jumping on individual taxpayers, they have done little to pursue the promoters of these schemes.

How Can Contractors Sign the Ross Thomson Loan Charge Petition

You can sign the Ross Thomson Loan Charge petition here at Loan Charge Petition

There is a Loan Charge Action Group

If you know anyone else who would find this article useful, please share it with them using the social media buttons at the top and bottom of the page.

Ad – Contractor Services

When the IR35 changes were implemented in the public sector, rather than just pay the IR35 tax, most contractors inside IR35 decided to take the umbrella company route. If you are inside IR35, or caught by a blanket ban on Limited Company contractors, it would be worthwhile checking to see how much income you would keep using an umbrella company. Just fill out the form below and someone will be in touch to let you know.

If you think you can benefit from using an umbrella company, try the following:-

Simply Umbrella

Umbrella Companies for Locum Doctors, Agency Nurses, Vets, Dentists and GPs

Umbrella Companies for Project Managers, Programme Managers, Interim

Do you need some professional advice on which umbrella company is right for you? Do you want to get better returns from your Umbrella Company? Fill out the form below to receive expert advice.

For all necessary business insurance, including IR35, try Business Insurance for Contractors

    Your Name (required)

    Your Email (required)

    Your Telephone (required)

    Your Daily Rate (required)

    Please Fill in Answer to Simple Quiz Question




    Please enter your comment!
    Please enter your name here

    This site uses Akismet to reduce spam. Learn how your comment data is processed.