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Section 36 refusal - request to provide qualified person's name, opinion and associated metadata
Source: WhatDoTheyKnow
Authority: HM Treasury
Status: The request was
refused
by
HM Treasury
.
Imported path: /opt/loancharge/imports/wdtk/requests/section_36_refusal_request_to_pr
Open original request on WhatDoTheyKnow
Imported text
SOURCE: WhatDoTheyKnow
SOURCE_URL: https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr
TITLE: Section 36 refusal - request to provide qualified person's name, opinion and associated metadata
AUTHORITY: HM Treasury
AUTHORITY_URL: https://www.whatdotheyknow.com/body/hm_treasury
STATUS: The request was
refused
by
HM Treasury
.
REQUEST_SLUG: section_36_refusal_request_to_pr
CAPTURED_AT: 2026-05-19T07:05:36+00:00
PROVENANCE: {"first_seen_at": "2026-05-18T12:55:03", "first_seen_page": "2", "first_query_term": "\"Loan Charge\"", "first_date_after": "2022/01/01", "first_date_before": "2023/01/01", "matched_query_terms": "\"Amyas Morse\" | \"Loan Charge\" | \"Morse Review\" | \"disguised remuneration\"", "matched_date_ranges": "2001/01/01 to 2027/01/01 | 2022/01/01 to 2023/01/01", "first_search_url_template": "https://www.whatdotheyknow.com/search/%22Loan%20Charge%22/requests?commit=Filter&query=%22Loan+Charge%22&request_date_after=2022%2F01%2F01&request_date_before=2023%2F01%2F01&request_variety%5B%5D=sent&request_variety%5B%5D=response&request_variety%5B%5D=comment&sortby=&utf8=%E2%9C%93&page="}
ATTACHMENTS:
- FOI2021_25911_FOI_Response_Issued_2021_12_02.pdf | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/1928151/attach/3/FOI2021%2025911%20FOI%20Response%20Issued%202021%2012%2002.pdf?cookie_passthrough=1 | application/pdf | 77611 bytes
- [not downloaded] | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/1928151/attach/html/3/FOI2021%2025911%20FOI%20Response%20Issued%202021%2012%2002.pdf.html | | 0 bytes
- FOI2022_01891_FOI_Response_Issued_2022_02_28.pdf | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/1984340/attach/3/FOI2022%2001891%20FOI%20Response%20Issued%202022%2002%2028.pdf?cookie_passthrough=1 | application/pdf | 118200 bytes
- [not downloaded] | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/1984340/attach/html/3/FOI2022%2001891%20FOI%20Response%20Issued%202022%2002%2028.pdf.html | | 0 bytes
- 2020-06-29-Loan-Charge-APPG-report-on-the-FOI-exposing-that-the-Morse-Review-wasnt-independent.pdf | http://www.loanchargeappg.co.uk/wp-content/uploads/2020/06/2020-06-29-Loan-Charge-APPG-report-on-the-FOI-exposing-that-the-Morse-Review-wasnt-independent.pdf | application/pdf | 1404110 bytes
- LCAG-letter-to-Lord-Morse-21st-October-2021-1.pdf | http://www.hmrcloancharge.info/wp-content/uploads/2021/10/LCAG-letter-to-Lord-Morse-21st-October-2021-1.pdf | application/pdf | 941255 bytes
- 2022-02-04-LCAG-further-letter-to-Lord-Morse-February-2022-final.pdf | http://www.hmrcloancharge.info/wp-content/uploads/2022/02/2022-02-04-LCAG-further-letter-to-Lord-Morse-February-2022-final.pdf | application/pdf | 275411 bytes
- FOI2021_27262.pdf | https://www.whatdotheyknow.com/request/802279/response/1982977/attach/3/FOI2021%2027262.pdf?cookie_passthrough=1 | application/pdf | 3927690 bytes
- IR2022_07690_IR_Response_Issued_2022_05_05.pdf | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/2034073/attach/3/IR2022%2007690%20IR%20Response%20Issued%202022%2005%2005.pdf?cookie_passthrough=1 | application/pdf | 334750 bytes
- [not downloaded] | https://www.whatdotheyknow.com/request/section_36_refusal_request_to_pr/response/2034073/attach/html/3/IR2022%2007690%20IR%20Response%20Issued%202022%2005%2005.pdf.html | | 0 bytes
================================================================================
MESSAGE 1 [outgoing]
HEADER: F Thompson
4 November 2021
Delivered
--------------------------------------------------------------------------------
Dear Her Majesty's Treasury,
You responded to my recent FOI request (reference FOI2021/15854) on 01 September 2021, refusing to disclose the information requested and claiming exemption under sections 36(2)(b)(i), 36(2)(b)(ii) and 36(2)(c) of the FOIA.
As a consequence, please now disclose:
1) the name of the qualified person who provided that opinion, where qualified person, in relation to information held by a government department in the charge of a Minister of the Crown, means any Minister of the Crown; or, in relation to information held by any other government department, means the commissioners or other person in charge of that department.
2) the full and unabridged text of that qualified person’s opinion, and all recorded information, of any type or in any format, which contains submissions (or exchanges of opinion) provided to the qualified person for considering that request.
3) all metadata held in any recorded form by the department which relates to my original request (reference FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and the recently allocated internal review (reference IR2021/25860).
Yours faithfully,
F Thompson
================================================================================
MESSAGE 2 [incoming]
HEADER: FOI Requests,
HM Treasury
4 November 2021
--------------------------------------------------------------------------------
Our ref: FOI2021/25911
Dear F Thompson,
Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.
This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.
Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [
email address
]
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury
Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ [2]www.gov.uk/hm-treasury
References
Visible links
1.
http://www.gov.uk/hm-treasury
2.
http://www.gov.uk/hm-treasury
================================================================================
MESSAGE 3 [incoming]
HEADER: FOI Requests,
HM Treasury
2 December 2021
--------------------------------------------------------------------------------
1 Attachment
FOI2021 25911 FOI Response Issued 2021 12 02.pdf
75K
View
Download
Dear F Thompson
Please find attached a response to your recent FOI request.
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury
References
Visible links
1.
http://www.gov.uk/hm-treasury
================================================================================
MESSAGE 4 [outgoing]
HEADER: F Thompson
31 January 2022
Delivered
--------------------------------------------------------------------------------
Dear FOI Requests,
Thank you for your reply of 2nd December 2021.
My original request, submitted on 4th November 2021, asked HM Treasury to disclose information on three closely connected points. These were all directly linked to your previous refusal to provide evidence of the decision-making process which led to the selection and appointment of Sir (now Lord) Amyas Morse, and which you withheld based on your claim that disclosure of this information is apparently not in the public interest.
The first of these points was clear in requesting the name of the qualified person who provided the opinion which HM Treasury claim justifies the use of section 36 of the Freedom of Information Act in this instance. Instead of supplying the name of that person, you just include a statement that the Exchequer Secretary to the Treasury is the 'qualified person' in relation to HM Treasury, but which does not answer the question as posed.
Helen Whately was appointed Exchequer Secretary to the Treasury on 16 September 2021 and is (currently) still in that role. Her predecessor was Kemi Badenoch, who held the post from 13th February 2020 to 15th September 2021. Can you please therefore confirm - with a straight 'yes' or 'no' response for complete clarity on this matter - that it was Kemi Badenoch herself who provided the opinion that disclosure of the requested information was not in the public interest?
For the purposes of this reply, I will draw the assumption that the answer is 'yes' - otherwise, one might reasonably conclude that your prior statement indicating that the Exchequer Secretary to the Treasury is the 'qualified person' in relation to HM Treasury was an attempt to somehow obfuscate the facts or supply a misleading answer, which I trust will not turn out to be the case.
The second point asked for the full and unabridged text of that qualified person's opinion, and all recorded information, of any type or in any format, which contains submissions (or exchanges of opinion) provided to the qualified person for considering that request. You have confirmed that HM Treasury does hold information within the scope of my request.
The third point asked for all metadata held in any recorded form by the department which relates to my original request (reference FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and the recently allocated internal review (reference IR2021/25860). Again, you have confirmed that HM Treasury does hold information within the scope of my request.
However, you claim that this request is 'very wide in scope' and that your search has identified a large number of documents to consider, declaring that you would need to review each document separately with a view to determining whether any information was exempt from release due to sensitivities or personal data, and to then redact any exempt material. You contend that my request engages section 14(1) of the Freedom of Information Act due to the disproportionate effort that would be required to comply, but state that you may be able to comply with a future request if the focus was narrowed.
This claim - that you have identified a large number of documents in relation to this request - reveals the serious significance and importance of the matter at hand and self-evidently exposes the lengths to which HM Treasury is prepared to go in order to prevent disclosure of this information, lest it demonstrably reveals the internal unease and apprehension about its own culpability being unwillingly divulged, as well as the liberal disregard for public transparency and truth which still seems to ferment within the department. The authority will be fully conversant with the report published by the Loan Charge All-Party Parliamentary Group (now the Loan Charge and Taxpayer Fairness All-Party Parliamentary Group) in June 2020, which laid bare the distinct lack of independence and the unacceptable level of interference with the review by those government departments with a hugely vested interest in the outcome. The contents of this report, supported and endorsed by hundreds of MPs as members of this group, were ignored by government. From the very day on which the appointment of Sir (now Lord) Morse was announced as head of this review, there has been a consistent series of allegations broadcast and published in the media that Morse was not an independent reviewer and that the review itself, and the subsequent report, were both subject to interference by HM Treasury and HMRC.
Any reasonable observer would conclude that the public interest is best served by the full disclosure of the information requested, in order to establish the facts around that controversial appointment. I - and tens of thousands of other UK citizens - can see no basis on which HM Treasury could possibly disagree. It would seem entirely sensible - and indeed reasonable to anyone who fully understands the definition of independence - that HM Treasury should WANT to provide evidence which helps to stem the ever-expanding flow of these allegations and which confirms their position that this was a wholly impartial and independent review - whereas continuing to withhold and refusing to disclose the evidence simply confirms the opposite. It could not be any clearer, unless one remains blind to the truth and committed to a cover-up.
Additionally, there are numerous elements within your response which require challenge, clarity and a more detailed focus, which I will now seek to patiently address.
On the premise that it was indeed Kemi Badenoch who provided the opinion - which by now you will have confirmed either way - then the recorded information you hold will include the full and unabridged text of her singular communication to that effect. You could - had you helpfully chosen to do so - have simply provided that in isolation and informed me that the remainder of this request (the submissions and/or exchanges of opinion provided to the qualified person for consideration of that request, plus the metadata held in any recorded form by the department which relates to the entirety of my original request) was, in your opinion, subject to the engagement of other exemptions as stated. Is there a particular reason for the selective withholding of this eminent 'opinion' other than the fact it might be considered as being of a much more significant benefit to HM Treasury than those tens of thousands of UK citizens diligently attempting to establish the cold, hard truth about the careful and strategic selection of Sir (now Lord) Morse as opposed to an informed, knowledgeable, experienced - and properly independent - tax judge?
The first reference which HM Treasury made to the claimed engagement of section 36 was in the interim reply (to FOI2021/15854) dated 6th July 2021. This response made the claim that section 36(2)(b)(ii) of the FOI Act applied as HM Treasury believe disclosure would, or would be considered as likely, to inhibit the free and frank exchanges of views of the purposes of deliberation. On that basis, you extended the time for consideration of the public interest test using section 10(3). On 1st September 2021, HM Treasury communicated that they considered that the information requested also engaged additional sections 36(2)(b)(i) and 36(2)(c) - having taken 61 full working days to come to that conclusion, well beyond the guidelines laid out by the Information Commissioner's Office. It is notable - and once again self-evident - that the cause of this excessive delay was HM Treasury's own internal discussions and their concerted efforts to ensure that this information was withheld at any cost and with no regard to, or respect for, the statutory timescales laid out under the Freedom of Information Act.
You state that your search has identified a 'large number' of documents to consider, but fail to give any indication, or a sensible and realistic estimate, as to the actual volume concerned. Whilst it is understood that an authority cannot claim section 12 for the cost and effort associated with considering exemptions or redacting exempt information, it may apply section 14(1) where it can make a case that the amount of time required to review and prepare the information for disclosure would impose a grossly oppressive burden on the organisation - which is what you are claiming in this case.
The Information Commissioner's Office consider there to be a high threshold for refusing a request on such grounds, meaning that an authority is most likely to have a viable case where:
a) the requester has asked for a substantial volume of information AND
b) the authority has real concerns about potentially exempt information, which it will be able to substantiate if asked to do so by the ICO AND
c) any potentially exempt information cannot easily be isolated because it is scattered throughout the requested material.
In the event that a refusal should lead the requester to complain to the ICO, they would expect the authority to provide them with clear evidence to substantiate its claim that the request is grossly oppressive, with any requests which are referred to the Commissioner being considered on the individual circumstances of each case. It is reiterated by the ICO that "public authorities must keep in mind that meeting their underlying commitment to transparency and openness may involve absorbing a certain level of disruption and annoyance."
There are many other factors which would need to be duly considered should such a complaint be escalated to the ICO (assessing purpose and value, considering whether the purpose and value justifies the impact on the public authority, taking into account context and history, etc.) but if possible and in the spirit of compromise, I would like to help the authority avoid such an outcome.
Whilst the request for the full and unabridged text of the qualified person's opinion in the second point remains unchanged, I would be willing to narrow the scope (date range) of my original request for the remainder of this second section. Please therefore provide all recorded information, of any type or in any format, which contains submissions (or exchanges of opinion) provided to the qualified person for considering that request between 6th July 2021 and 1st September 2021. On the continued assumption that it was Kemi Badenoch who provided the opinion, then all communications covering this request should be held within a single mailbox - unless you are likely to inform me that there are other forms of recorded information on other types of media which contain this data? Please kindly confirm - thank you.
With regard to the third point, which asked for all metadata held in any recorded form by the department which relates to my original request (reference FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and the internal review (reference IR2021/25860), please restrict your search for metadata to dates between 7th June 2021 and 1st December 2021, which I respectfully calculate will indeed reduce the burden on the authority, and enable you to publicly demonstrate your stated commitment to transparency and openness - thank you.
Yours sincerely,
F Thompson
================================================================================
MESSAGE 5 [incoming]
HEADER: FOI Requests,
HM Treasury
1 February 2022
--------------------------------------------------------------------------------
Our ref: FOI2022/01891
Dear F Thompson,
Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.
This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.
Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [
email address
]
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury
References
Visible links
1.
http://www.gov.uk/hm-treasury
================================================================================
MESSAGE 6 [incoming]
HEADER: FOI Requests,
HM Treasury
28 February 2022
--------------------------------------------------------------------------------
1 Attachment
FOI2022 01891 FOI Response Issued 2022 02 28.pdf
115K
View
Download
Dear F Thompson
Please find attached a response to your recent FOI request.
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury
References
Visible links
1.
http://www.gov.uk/hm-treasury
================================================================================
MESSAGE 7 [outgoing]
HEADER: F Thompson
4 April 2022
Delivered
--------------------------------------------------------------------------------
Dear Her Majesty's Treasury,
Please pass this on to the person who conducts Freedom of Information reviews.
I am writing to request an internal review of Her Majesty's Treasury's handling of my FOI request 'Section 36 refusal - request to provide qualified person's name, opinion and associated metadata'.
Thank you for your reply of 28 February 2022.
You have raised a number of highly contentious points within this response, and made allegations which I believe are wholly unfounded. It is therefore my duty and responsibility to address these for the benefit of any future investigation by the Information Commissioner's Office, in its role as impartial adjudicator for requests made to authorities under the Freedom of Information Act. The length of this response is therefore reflective of the detail required to make that case.
Firstly, you claim that since 2020, I have made 10x FOI requests to HM Treasury in relation to the 2019 Loan Charge. That number is incorrect. For accuracy, I have listed the 6x requests I have actually made to HM Treasury since 2020 below in chronological order, and have included the respective status of each on the
www.whatdotheyknow.com
site as at today's date.
*19 May 2020 (FOI2020/15187)
Revised estimate of revenue to be generated from Loan Charge as a result of Covid-19
Information not held by HM Treasury
*10 March 2021 (FOI2021/09786)
Evidence of the decision-making process which led to the selection and appointment of Sir Amyas Morse
Refused by HM Treasury
*07 June 2021 (FOI2021/15856)
All incoming and outgoing messages from the Treasury smart phone which was supplied to Amyas Morse
Refused by HM Treasury
*04 November 2021 (FOI2021/25946)
Emails / recorded information from/to HM Treasury senior officials containing the search terms 'Morse' and/or 'Amyas' and/or 'LCAG' and/or 'Loan Charge Action Group'
Awaiting internal review response from HM Treasury
*04 November 2021 (FOI2021/25911)
Section 36 refusal - request to provide qualified person's name, opinion and associated metadata
Awaiting internal review response from HM Treasury (THIS FOI REQUEST)
*08 November 2021 (FOI2021/26072)
Information relating to the agreement/contract which covered the appointment/engagement of Sir (now Lord) Morse
Awaiting internal review response from HM Treasury
Your internal decision to issue updated reference numbers during the course of communication exchanges is quite clearly your prerogative; however, it does not detract from the fact that the source request stands unchanged - and, in the vast majority of instances, remains unanswered or simply refused. In effect, this is the crux of my own concern, as it is abundantly and transparently clear to any interested party (and there are many thousands spread across all sectors of society) that HM Treasury are deeply resistant to the disclosure of information on the subject of, or related in any way to, the controversial and retrospective government policy known as the Loan Charge.
Following intensive research, investigation and scrutiny over the last few years by members of parliamentary committees, constituent MPs, professional bodies, independent tax experts and the victims of this policy themselves, there is now a wealth of compelling evidence currently available in the public domain to both challenge and discredit the claims from government that this has supposedly been subject to what is laughably referred to by HM Treasury as an 'independent' review.
To try to add yet further weight and fact to that evidence, I have raised Freedom of Information requests using the constitutional rights available to me under the FOIA in an attempt to seek - in the public interest - the necessary answers to those serious and hugely important questions that the existence of that evidence prompts, and raises. It is noted that whenever this evidence is referenced within any requests which are submitted to HM Treasury using a public platform, there is invariably not a single comment made in return, nor a hint of acknowledgement that it even exists. This telling silence also extends to reports which have been compiled by the associated All-Party Parliamentary Group (comprised of 248 parliamentarians at the last available count) such as that published in June 2020 exposing the lack of independence in the aforementioned review (link below), but which has gone unanswered ever since. None of this is conjecture, or speculation - all this evidence contains plain, simple truths and cold, hard facts, but continues to be ignored and sidestepped by government, and HM Treasury as one of the primary instigators of this policy.
http://www.loanchargeappg.co.uk/wp-conte...
As a complete nobody - a lowly, unimportant, average worker-citizen of this country - I am not afforded the opportunity to sit in the same room as ministers or policymakers, senior officials or advisers, to debate this evidence and to ask for truthful and honest answers to those many questions. My only route, indeed my only option, is to try to utilise the Freedom of Information Act and to exercise the rights which that legislation bestows upon me. Other than the request I raised on 19 May 2020 (FOI2020/15187), every other I have made to HM Treasury has been on the subject of, or related to, the Morse review and the process which allowed him to be placed at the forefront of this exercise by government.
The dearth of information supplied by HM Treasury in response is testament to that entrenched and manifest resistance to disclosure; should any individual feel so inclined to read the content and discern the nature of those responses, they will be left in no doubt as to the profound significance of the information being withheld. By any means necessary, it would appear.
On the premise of your inaccurate calculation as to the number of requests I have made, you have informed me that you intend to apply an exemption under section 14(1) of the FOIA to prevent disclosure of any information under this request, and potentially all others I might submit in future. At this point, I would like to be granted the chance to reply to each element of your argument and to formulate a defence to that charge of "a disproportionate or unjustified level of disruption, irritation or distress."
Your first accusation, that I have made 10x FOI requests to HM Treasury in relation to the 2019 Loan Charge, has already been proven incorrect. What you visibly fail to share is the number of requests from an individual which are considered acceptable or appropriate by HM Treasury given the enormous public interest on the subject of the Loan Charge, as well as the attention and regard which continues to be focused on the flawed and heavily-biased conclusions arising from the Morse review - does such a figure exist?
Secondly, you unambiguously extract selective paragraphs relating to the use of section 14 which support your 'view' that this request (and others) should now be refused. There are, as you will be aware, many other paragraphs and clauses which would negate that prejudiced and partisan 'view'. Should this stance be maintained, it is almost certain that the Commissioner will be forced to adjudicate, despite the expanding workload which they already face as a result of the refusal by public authorities to properly comply with their obligations under the terms of the FOIA. On the face of it and contrary to the essence of the Freedom of Information legislation, it would seem to be a shameful dereliction of public duty and service to demonstrate such an overt unwillingness to be transparent and open to members of the public; yet it sadly appears to be a consistent modus operandi within HM Treasury at the present time on this subject.
To counter this view which you suggest is sufficient on its own to refuse disclosure, I would like to draw your own attention to those many others which would formulate a different, and support an opposite, conclusion. As mentioned in the most recent response I have made to HM Treasury, I have looked closely at the revised and updated guidance recently published by the ICO on section 14 of the FOIA. It bears repeating here that the FOIA gives individuals a greater right of access to official information in order to make bodies more transparent and accountable, and as such it is an important constitutional right. More significantly perhaps, the ICO state that the claimed engagement of section 14(1) is a 'high hurdle' for any public authority and that it is concerned with the nature of the request rather than any damage releasing the requested information may have - an important and notable distinction. If a larger public authority (such as HM Treasury with a confirmed FTE workforce of around 1300 people) is attempting to claim use of section 14, then it is not sufficient to argue that a request is burdensome because you have only allocated a small number of officers to handle requests.
The guidance published by the ICO makes it clear that section 14(1) can only be applied to the request itself and not the individual who submitted it. You cannot, therefore, refuse a request on the grounds that the requester themself is 'vexatious'. Similarly, you cannot refuse a new request solely on the basis that you have classified previous requests from the same individual as vexatious. You state that you have reviewed the impact of my recent FOI requests and consider that dealing with these has resulted in an unjustified level of disruption. No documented evidence or tangible commentary to support that claim is offered, or shared. Were HM Treasury to honestly redraw and impartially re-examine the lines of engagement with members of the public on the subject of the Loan Charge and the Morse review, this perceived level of disruption would immediately disappear. By not doing so, as is the case currently, then those members of the public who hold an interest in these subjects will persist in their attempts to seek information which reveals the truth behind this unjustified and ill-conceived policy.
It is of some topical note that the Post Office Scandal (also known as the Horizon IT Scandal) has been so conspicuous in the broadcast media over recent weeks, with the ongoing public inquiry expected to run for most of this year. The most senior officials at the Post Office, supported by its single shareholder that is the UK government, roundly and falsely condemned victims to financial ruin, or even worse, jail. Years later, it is established by the courts that the evidence used was unsound, the processes around prosecution fundamentally flawed, and that a complete (and avoidable) miscarriage of justice had taken place in plain sight of government and its wholly state-owned company, despite the continued warnings and red flags that had been raised by those representing and defending the SPMs. The parallels here are not lost on victims of the Loan Charge, which number in their tens of thousands and contrast with the 700+ SPMs who were targeted using deceitful, underhand methods and dishonest tactics and strategies by those responsible for those prosecutions and who themselves were shamefully and deliberately intent on evading any culpability, avoiding any comeback or taking any blame. Only now are victims being properly heard, and their lives being returned. History has a habit of often repeating itself - governments never seem to learn from their mistakes, as the Loan Charge controversy continues to prove.
Your original response of 02 December 2021 claimed my request was too wide and refused it under section 14(1). I made it clear in my reply to that refusal, in the spirit of compromise, that I wished to help the authority avoid an escalation to the Information Commissioner's Office, and narrowed the scope accordingly. I commented in that same reply that your search had identified a 'large number' of documents to consider, but you had failed to give any indication, or a sensible and realistic estimate, as to the actual volume concerned. In your most recent response, you once again fail to give any indication, or a sensible and realistic estimate, as to the actual volume concerned, and just repeat the same phrasing used previously. It would appear that you consider this statement quite sufficient when dealing with a nobody like me, but it is my understanding that the Commissioner will require actual evidence. It would also appear that now might be an appropriate point at which to repeat a phrase I have previously referenced myself (and as reiterated by the ICO in their guidance) - that "public authorities must keep in mind that meeting their underlying commitment to transparency and openness may involve absorbing a certain level of disruption and annoyance." Not at HM Treasury, apparently.
It is noted within the same ICO guidance that when section 14(1) is being claimed, context and history can indicate that the requester had a reasonable justification for making their request, and that because of this the public authority should accept more of a burden or detrimental impact than might otherwise be the case - weakening any argument that the request could be cast as vexatious. Even more important and significant (particularly in the context of this request) in that published guidance is the entry that states "where serious failings at the authority have been widely publicised by the media, giving the requester genuine grounds for concern about the organisation’s actions, the authority should be mindful to take into account the extent to which oversights on its own part might have contributed to that request being generated." Those oversights have been consistently shared and well documented by many others, not least the All-Party Parliamentary Group, different parliamentary committees, tax professionals and countless news journalists and media commentators; yet still, HM Treasury remain in denial.
I am encouraged that you made reference to the Dransfield case (the Information Commissioner vs Devon County Council & Dransfield [2012] UKUT440 (ACC), (28 January 2013), where purpose and public interest were both under scrutiny at the Upper Tribunal. You claim that when considering all the factors associated with my requests, you do not find a serious purpose to outweigh this impact.
I wonder where I should start.
On the assessment of value or serious purpose, the Upper Tribunal in Dransfield asked itself, “Does the request have a value or serious purpose in terms of there being an objective public interest in the information sought?” (paragraph 38). The public interest can encompass a wide range of values and principles relating to what is in the best interests of society, including, but not limited to:
holding public authorities to account for their performance; understanding their decisions; transparency; and ensuring justice.
It is clear from the Upper Tribunal’s findings in Dransfield that when considering value and serious purpose, the concern is with assessing whether there is public interest in disclosure. In many cases the value and purpose of the request is apparent from the:
nature of the information requested; context of the request; or history of the requester’s engagement with you.
In other cases it may be less clear what purpose would be served by disclosing the information, but as the Upper Tribunal in Dransfield observed:
“public authorities should be wary of jumping to conclusions about there being a lack of any value or serious purpose behind a request simply because it is not immediately self-evident.”
If the value or purpose of the request is not immediately obvious, an authority may take account of any comments the requester might have made about the purpose behind their request or any evidence they are willing to volunteer. The FOIA does not require a requester to give their reasons for making a request and they cannot insist they do.
I have tried - with very little success to date - to hold HM Treasury to account for the major part they have played in the Loan Charge, and the subsequent failings associated with the Morse review which were unquestionably influenced and engineered by the authority. I have provided evidence and fact along the way to substantiate these findings, all of which has been ignored, with my requests for information being consistently refused and the data withheld. One might consider that to help the public understand their decisions, HM Treasury would be only too willing to share the information being sought for the removal of any doubt in that arena; however, each request for anything which references the Loan Charge or the Morse review meets the same fate, with tenuous exemptions and spurious reasoning applied to ensure non-disclosure. No sane, reasonable or objective person could possibly claim that there is the slightest transparency to this process - it is alarmingly evident that government and HM Treasury wish to close this debate down, to suppress access to the truth and to stifle the possibility of any further change to this policy. The key element here is perhaps 'ensuring justice'. HM Treasury holds information which would expose not only the lack of a proper legal basis for the Loan Charge (as is evident from numerous letters and reports from the All-Party Parliamentary Group to ministers and senior officials, none of which have received a satisfactory or comprehensive answer) but also the complete lack of any independence to the stage-managed review which was assured a pre-determined outcome by the appointment of Lord Morse to lead the team (which itself was comprised entirely of HMT and HMRC senior staff members) by government. I will provide further evidence to support this later within this same submission.
The nature of the information requested, in and of itself, is enough of a clear indication to contradict the claim from HM Treasury that there is no serious purpose. Five of the six requests I have made to HM Treasury are directly linked to the appointment of Lord Morse to head the government's review, the concealed and unverified process which enabled that appointment and his communications, at the time and since, on the subject of that review. The context of these combined requests therefore requires no further explanation and no extended logic or reasoning - my focus with these five requests is precisely what I have summarised in that previous sentence. There is a firm, legitimate and widespread belief, based on information revealed in other FOI disclosures that the Morse review, claimed by government as an independent exercise, was anything but. This information has provided weight and substance to the conclusion which all those seeking justice have long expressed as fact - that there is a pronounced and plausible suspicion of wrongdoing by the authority, and that this evidence, held by HM Treasury, should be disclosed into the public domain to finally confirm what has been consistently alleged since the very date Morse was appointed.
My own approach to these Freedom of Information requests to HM Treasury is mirrored in the case of Marsh vs ICO (EA/2012/0064, 1 October 2012), where the appellant had asked Southwark council for information about the outcome of a review into the methodology for an increase in court costs (which had followed on from previous enquiries on the same subject). The council had refused the request as vexatious on the grounds that it was part of a long series of related, overlapping correspondence which was both obsessive and having the effect of harassing the council. The Tribunal considered the history of Mr Marsh’s contact with the council from his first request about the calculation of court costs in 2006, through to 2008 when the council broke off further discussions and on to 2011 and the refusal of his most recent request. They also took account of an Audit Commission investigation, instigated by Mr Marsh, which had found that there was scope for the council to improve its arrangements for managing court costs and liability orders. No different to the All-Party Parliamentary Group, made up of 248 MPs and peers, publishing a report into the clear lack of independence of the Morse review - to which no government response has ever been received.
In allowing the appeal they commented that: “We think it appropriate, and indeed necessary, for us to take into account this evidence because it reinforces our own view that the Central Enquiry was not vexatious. We have demonstrated how Mr Marsh pursued a legitimate concern on an issue of some significance, at first with a degree of co-operation from the council and, when that was removed, by dogged, forensic investigation of the information the council provided to him or to the public. It was a campaign that led the council’s own Overview and Security Committee to investigate in 2008 and some of its members to express concern about the way in which cost claims appeared to have been assessed. The issue under consideration was also a relatively complex one (exactly as this one happens to be) and provides further justification for different strands of enquiry when seen in context of previous requests having been pursued in parallel and investigated in some depth.” (paragraph 30).
All record of my engagement with HM Treasury is in the public domain and available for anyone to see. I have provided substantiated evidence to back up my requests for information, and have myself doggedly, forensically and repeatedly investigated the information which has been drip-fed by the authority, and which in turn has persuaded me to seek those in-depth answers and disclosures from HM Treasury on the referenced subject. I have been informed that the public interest is not served by these requests - try telling that to the tens of thousands of victims and their families who remain mired in this long-running debacle. I would suggest in the strongest possible terms that these 5x requests - all on or related to the subject of the Morse review - are entirely self-evident in their clear demonstration of value and serious purpose. For the authority to state otherwise is a plain and obvious attempt to shut this line of inquiry down, lest it eventually reveal further information which exposes the lengths and measures taken by senior officials within HM Treasury to silence the sizeable opposition to this policy and to withhold data which justifies and validates those accusations of a non-independent review from MPs, peers and the wider public. There is an obvious question to table in this situation - if the authority truly has nothing to hide, then why are they so intensely resistant to disclosure of any of the information which has been requested?
You conclude your response by stating your belief that "several different requesters are acting in concert as part of a campaign that disrupts the organisation", and that this "has caused a disproportionate and unjustified level of disruption, irritation or distress."
My requests have been made in concert with no-one. If you believe that others might be acting in such a manner, then you are surely obliged to produce evidence to that effect. What actual number or volume of requests constitute a "disproportionate and unjustified" amount of "disruption, irritation or distress"? It would appear more likely that it is the undisguised fear of disclosure which is causing the latter within HM Treasury, for I believe that I have provided both proportionate and justified reasoning behind every request I have made. If you continue to claim otherwise, then is there a published limit or threshold which is officially deemed 'acceptable'?
In their published guidance, the ICO confirm that it is important to recognise that campaigns are not in themselves vexatious. The existence of a campaign may be the result of a legitimate public concern about an issue and so reflect a weighty public interest in the disclosure of the information. The subjects of the Loan Charge and the associated Morse review have prompted unprecedented numbers of MPs, peers, tax and legal experts, journalists and media commentators to speak out in opposition - there could be no higher level of 'legitimate public concern' on display, or 'weighty public interest' in the disclosure of the information sought.
The ICO proceed to explain that it is also important to bear in mind that sometimes a large number of individuals will independently ask for information on the same subject because an issue is of media or local interest, and that an authority should therefore rule this explanation out before arriving at the conclusion that the requesters are acting in concert or as part of a campaign. It is loosely estimated by government that 50,000 people and their extended families are impacted by this legislation and these (unproven in law) demands - it would be reasonable to suggest that the actual figure is therefore closer to 200,000 people. All of those people have access to, and the constitutional right, to submit a Freedom of Information request to HM Treasury or any other public authority. Moreover, at what point, or at what number, is the public interest considered positively 'engaged'? How many more people need to commit suicide as a result of this policy - are eight confirmed cases not quite enough to tip that balance?
In Thackeray vs ICO, (EA/2011/0082 18 May 2012), the Tribunal unanimously upheld the complainant’s appeal and observed that:
“The dogged pursuit of an investigation should not lightly be characterised as an obsessive campaign of harassment. It is inevitable that, in some circumstances, information disclosed in response to one request will generate a further request, designed to pursue a particular aspect of the matter in which the requester in interested. We would not like to see section 14 being used to prevent a requester, who has submitted a general request, then narrowing the focus of a second request in order to pursue a particular line of enquiry suggested by the disclosure made under the first request” (paragraph 26).
No reasonable person could fail to agree.
Earlier in this message, I made reference to further evidence which reveals the careful stage-management within HM Treasury of the scope, terms and conditions, timing and potential candidates for what became the 'Morse' review. In early September 2019, the Prime Minister (maintaining an earlier promise he had made during the leadership contest) announced a review of the Loan Charge, saying, "It is a very, very difficult issue and what I have undertaken to do is have a thorough going review."
At the time of this announcement, loud and vociferous calls were made by MPs and opponents of this policy for this review to be led by an experienced and knowledgeable - and truly independent - tax judge, as that was considered the only feasible solution to the unravelling of complex tax and legal issues which needed to be scrutinised, investigated and properly analysed. The government instead appointed Sir Amyas Morse. On 21 October 2021, the Loan Charge Action Group wrote a 12-page letter to Lord Morse, titled 'Loan Charge Review in light of evidence not known at the time' (
http://www.hmrcloancharge.info/wp-conten...
). This letter summarised the flaws in the review's conclusions and asked Lord Morse to respond to those serious concerns. To date, no reply has been received despite a follow-up on 04 February 2022 (
http://www.hmrcloancharge.info/wp-conten...
) asking once again for a response to that letter. As a recently appointed parliamentary peer, now subject to the House of Lords Code of Conduct and compelled to observe the seven general principles of conduct identified by the Committee on Standards in Public Life, his lack of a response, or even a respectful acknowledgement of receipt, is something which will come to define his role in that review and fittingly exposes the clear and obvious lack of independence which he brought to the position.
A recent Freedom of Information response (to request FOI2021/27262 -
https://www.whatdotheyknow.com/request/8...
) by HM Revenue & Customs included a 6x page memorandum from HM Treasury, dated 27 August 2019 and headed 'Loan Charge Review'. The author starts their introductory comments "The Prime Minister has committed to a ‘proper independent review’ of the disguised remuneration Loan Charge.", but follows this with "This submission sets out a range of options for a review and seeks a steer on the main design choices: the scope, independence, and timing." Note use of the revealing word 'choice' on the subject of 'independence'. An oxymoron to truly savour.
The author continues - "The central choice will be between satisfying campaigners opposed to the Loan Charge, and keeping the policy, including its revenue, intact." Would any reasonable person conclude that an honest, legitimate and properly independent review of a controversial government policy could possibly be 'steered' beforehand to ensure that the choice of 'keeping the policy' remained intact? What truly independent reviewer would ever accept such limit and constraint? Perhaps an experienced tax judge would have insisted upon such autonomy - which is probably why that option was not 'chosen'.
Further entries from the same introduction section of the memorandum include:
"Those pressing for a review will very strongly criticise anything that does not look like it will repeal the Loan Charge", "We would strongly recommend a review which aims to protect the policy as much as possible", "We are never going to satisfy the campaigners without a full reversal, but we might show some MPs we have taken concerns seriously, and give them enough of a reason to change their views", "We will also need to find someone to lead the review within days and any individual will face hostile personal criticism if they do not recommend reversing the charge", "We propose adapting this into a note to send to No 10 reflecting your steers". There's that 'steer' word again, on what is still foolhardily claimed as an 'independent' review.
The section headed 'overall scope' and states:
"You asked for advice on how to mitigate the risks around the review", "The most fundamental question is whether to review the Loan Charge policy itself", "At official level, our view is that we recommend ruling out a repeal from the start for fiscal, practical, and wider reputational reasons", "As covered in detail later, any review that looks at the merits of the entire policy (as opposed to some elements of it) will take longer, potentially require primary legislation as a result, and strengthen the APPG’s case for a pause in settlements and collections", "Reversing or pausing the Charge would create parliamentary difficulties, and definitely require primary legislation", " it will demonstrate that non-compliance and campaigning can be successful, including to campaigners against off-payroll reform". So much for that false, and perverse claim to 'independence'.
Another section, headed 'scope and MP reaction':
"However, we understand that this does not fully honour the spirit of the Prime Minister’s commitment, and a sizeable number of MPs’ expectations, and we have discussed this issue with the FST", "He supports a short, independent review “of the policy”, so that the option of repealing it is implicitly in scope. His view is that anything short of that will lay us open to the charge of not having done the review fairly, and it would not to draw a line under the issue with MPs as a result".
It certainly has not drawn that line and quite justifiably has not done so, given the fact that well over two years after the review's conclusion, the issue remains as contentious and disputed as ever in the public domain.
I could continue ad nauseam, but it is perhaps better to let the author have the last word on this section:
"At official level, we recommend not including the Loan Charge policy itself in the scope of the review, but recognise this may not go far enough for MPs. Do you want the repeal of the Loan Charge to be in scope?" For the benefit of the Information Commissioner - should this be necessary to share at any stage - the Loan Charge was never allowed to be 'independently' reviewed, hence the 5x related requests I have made to reveal that important, additional fact and evidence, and to determine the actual truth in this matter - which is a far cry from what we continue to be told by HM Treasury - "A longer, judicial style review does not meet your aims and we have therefore ruled it out". Those 'aims' would clearly include a notable lack of any independence from the 'selected' reviewer.
To corroborate this evidence, other FOI requests have revealed and echoed similarly worded exchanges at senior levels within HM Treasury and HM Revenue & Customs.
FOI2021/25439
Beth Russell, HMT Director General Tax and Welfare, in an email dated 08 September 2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "A few thoughts below on the handling plan. Also cc’ing HMRC seniors." The email continues -
"I think it is a good idea for FST to write to MPs (or at least those who have been interested). In particular, good in that to head off criticisms that LCAG will make of the review in particular why we have not suspended the charge while the review is being undertaken, why we are focusing it on individuals etc."
"Beyond that, i don’t think FST or other ministers should meet any stakeholders to explain further or during the period of the review (with ref to the last bullet of stakeholder section in the note)."
"Strongly agree we need to ensure No10, whips, CX’s PPS etc all have good briefing, particularly on the issues LCAG are likely to complain about after the announcement."
"On press handling, I’m not the expert but I would have thought we do want to contact those journalists who have been particularly interested in this eg. REDACTED, to explain the review. And again, try and head off the inevitable LCAG criticisms on suspension etc."
"I also paused on FST doing media. Not sure that’s a good idea."
"The biggest risk on Tuesday is LCAG coming out and complaining about the review not being wide enough and the charge not being suspended. Indeed we know they will so key is being on the front foot on rebutting/explaining why."
"We shouldn’t sound too defensive on these points – we’ve got good reasoning why we are doing what we are doing and the review itself is a major concession".
Name redacted, HMT (Strategy, Planning and Budget Projects), in an email dated 23 August 2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "Here is a skeleton of the advice on what a review of the Loan Charge could look like." The email continues -
"Separately, as discussed, the Chancellor has asked us to work up, on a contingency basis, what the minimum form of an independent review would look like, in case the PM wants to proceed with one. Welcome your views on what this should cover, but at the minimum it should set out something that that can reasonably be described as an independent review, but that minimises the spending/legislative/other risks that a review creates."
"You have options for what a review could potentially look like"
"The key question is what you would want to achieve with a review, and what it is practically possible for it to achieve."
"The Prime Minister committed to a “proper, independent review”. He also signed a letter that implicitly said that such a review went beyond what the government did with the previous Section 95 report."
"We recognise that you might want to try to meet the PM’s commitment in some form, as a way of demonstrating that he’s meeting his promises, and dampening criticism of the Loan Charge."
"You will therefore face strong criticism of anything that falls short of a full review of the entire policy, lasting months, led by an independent judge, and including a pause in the Loan Charge created by primary legislation."
"Our conclusion is that our arguments in support of a short review will only get us so far and you will need to accept that the APPG and LCAG will strongly dispute in the press that we have met the PM’s commitment."
"It would explicitly not look at whether there should be a Loan Charge. This will need to be made clear from the start to avoid raising expectations that the Loan Charge will be reversed."
"Anything that falls short of a full review, potentially leading to the repeal of the Loan Charge, will be criticised by MPs and in the press. You would also face renewed criticism in October when the review reports."
"We are not suggesting that you hold a review. A larger one puts £3.4bn at risk... A smaller one would probably still be criticised as falling short of the PM’s commitment."
FOI2019/02052
Name redacted, HMT Senior Policy Advisor - Specialist Personal Tax, Personal Tax Team, PTWP, in emails dated 09 September 2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "You previously cleared a version of the terms of reference which limited the scope to individuals who entered schemes directly, and explicitly ruled out employers from the scope of the review."
" He (Morse) understood the rationale for restricting the review to individuals – and that this is where most of the criticism lies – but on a point of principle didn’t want the scope of the review to explicitly rule out covering employers so he has the discretion to go wider if necessary. Officials agreed a compromise wording with Sir Amyas which makes clear (BR) that the focus of the review is to consider the impact on individuals, but does not explicitly rule employers out of scope." (BR)
"...officials believe he (Morse) wants the discretion to look at things broadly but in practice, will be guided by the focus of the review on individuals." (BR)
"Discussions today with Sir Amyas show he has a 'sensible' approach to the review." (BR)
"Thanks all, happy to go with simply contractors and no further detail in the ToRs as we have a clear definition we could point to if needed in future communications with the reviewer about scope. If concerns are raised about this definition, I would like to flag to seniors that the alternative option is just to say individuals, but as this definition is less clear there is more scope for the reviewer to look at transfer of liability from employers etc."
"In terms of handling the concerns of MPs and campaigners, the updated scope would be less subject to the criticism that we are excluding worthy groups such as individuals who claim they were forced into schemes by their employers."
(BR) - also includes suggested wording by Beth Russell (in her responses to the above on the same date)
Suzy Kantor, HMT Deputy Director Personal Tax, in an email dated 09 September 2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "He (Morse) didn't want to explicitly limit the terms of reference to take employers out of scope but was content with the focus on individuals and the likely impact on the scope of recommendations." The email continues -
"I was relatively reassured - would be interested in Carol's views - that in reality, he'll stay focussed on individuals and not stray further."
There are many more examples from senior officials' comments within both HM Treasury and HM Revenue & Customs which reinforce the exact same message - that despite the Prime Minister's public commitment to a ‘proper independent review’, the engineered reality of that review was altogether different. It was deliberately narrowed in scope to implicitly exclude employers, which was made transparently clear to Morse in those meetings which took place prior to the work commencing. Any potential for a full repeal of the policy by the reviewer was entirely ruled out - again, this was made clear to Morse in those same meetings. He was also made aware that any recommendations he might consider appropriate would be limited in scope due to the artificially confined nature of the terms of reference, all of which had been discussed in minute detail at senior level in HM Treasury and HM Revenue & Customs to ensure, with absolute confidence, that any proposed changes which Morse could potentially make would only have a minimum effect on the policy as it stood. Those same officials were intent on maintaining focus only on those individuals being targeted by government - again, shutting the door on any party being held liable other than the individual and ignoring the Supreme Court ruling from 2017 (in Rangers) which held that the employer was liable for any tax deemed to be due.
Suzy Kantor's communication to senior colleagues that Morse would not 'stray further' was proved 'reassuringly' correct and duly protected the vested interests of those defending the retrospective policy in HM Treasury and HM Revenue & Customs. The wealth, indeed the overload of evidence which is available can lead to only one conclusion - that it was not, in any sense or meaning of the word, an 'independent' review. When the Director General Tax and Welfare at HM Treasury states that "the review itself is a major concession", one can form a clear sense of the indignation and annoyance felt by those senior officials at being forced to face, and submit to, such an unexpected affront to their 'authority', following concerted pressure from Members of Parliament so vehemently opposed to their punishment-driven policy.
It is commonly quoted that the first casualty in any war is the truth. I would not hesitate to state that in the war of words which has ensued over the Loan Charge and the Morse review, truth has been institutionally set aside and covered up by HM Treasury with what would appear to be an alarming and unacceptable regularity. Any reasonable, objective or considered request on these subjects is consistently withheld because the truth would further undermine the (already overstretched) credulity of HM Treasury's claims that this review was afforded any kind of independence. Continuing to maintain the same, tired 'line' now just looks desperate - but it continues nonetheless.
There is still an opportunity for HM Treasury to alter position and change tack by disclosing the information I have requested. Should those responsible for making that decision choose to deny this legitimate request and continue to withhold in order to prevent the truth which this information holds from being exposed, and for the authority to be held accountable, then this will be taken to the Information Commissioner's Office on appeal.
A full history of my FOI request and all correspondence is available on the Internet at this address:
https://www.whatdotheyknow.com/request/s...
Yours faithfully,
F Thompson
================================================================================
MESSAGE 8 [incoming]
HEADER: FOI Requests,
HM Treasury
5 April 2022
--------------------------------------------------------------------------------
Dear F Thompson,
Thank you for your email regarding your request for an internal review.
I can confirm that your review request was received on 4th April and is
receiving attention under our reference IR2022/07690.
There is no statutory deadline for responding to internal review requests.
However, in line with the Information Commissioner's guidelines and the
[1]2018 FOI Code of Practice, we aim to complete internal reviews within
20 working days.
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ
[2]www.gov.uk/hm-treasury
References
Visible links
1.
https://www.gov.uk/government/publicatio...
2.
http://www.gov.uk/hm-treasury
================================================================================
MESSAGE 9 [incoming]
HEADER: FOI Requests,
HM Treasury
5 May 2022
--------------------------------------------------------------------------------
1 Attachment
IR2022 07690 IR Response Issued 2022 05 05.pdf
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Dear F Thompson
Please find attached a response to your recent IR request.
Yours sincerely
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury
References
Visible links
1.
http://www.gov.uk/hm-treasury
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TEXT_FILE: 2020-06-29-Loan-Charge-APPG-report-on-the-FOI-exposing-that-the-Morse-Review-wasnt-independent.pdf.txt
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1
Loan Charge All-Party Parliamentary Group
Exposing HMRC interference in the supposedly ‘independent’
Loan Charge Review:
The Truth as revealed by Freedom of Information
June 2020
This Report was researched and written by the Loan Charge APPG. The Loan Charge APPG Secretariat is staffed and funded by the Loan
Charge Action Group.
This is not an official publication of the House of Commons or the House of Lords. It has not been approved by either House or its
committees. All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues.
The views expressed in this report are those of the group.
appg
--- PDF page 2 ---
2
Contents
1. Introduction ....................................................................................................................................................3
2. Background .....................................................................................................................................................4
2.1 Review Terms of Reference ......................................................................................................................4
2.2 The Morse Review Secretariat Team – HMRC employees .......................................................................4
3. Internal Correspondence Exposed by the FOIs ..............................................................................................5
4. HMRC and Treasury attempts to influence the review prior to Sir Amyas’s appointment............................6
5. First Morse Review meeting – with HMRC and the Treasury .........................................................................6
6. Relationship between the Review secretariat team and HMRC/Treasury .....................................................7
7. Treasury press office handling press matters on behalf of the review ..........................................................7
7.1 Inappropriate Involvement of the Chancellor’s Press Secretary in press contacts with the Review team
and evidence of general collaboration ...........................................................................................................8
7.2 Assistance with ‘lines’ for HMRC to use before Select Committee appearance ......................................9
7.3 Assistance with ‘lines’ for Sir Amyas Morse to use with the press ..........................................................9
8. Pre-approval of members of the expert panel ............................................................................................ 10
9. HMRC and Treasury input into the report conclusions ............................................................................... 12
10. Conclusion ................................................................................................................................................. 15
Appendix – FOI requests and responses ......................................................................................................... 18
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3
Exposing HMRC interference in the supposedly ‘independent’ Loan Charge
Review: The Truth as revealed by Freedom of Information
1. Introduction
The Government commissioned review of the Loan Charge, led by Sir Amyas Morse, known as the
Morse Review was commissioned by the government in September 2019 following strong criticism
of the Loan Charge both inside and outside Parliament and following confirmed suicides of people
who have used loan schemes and were facing the controversial 2019 Loan Charge. The Morse
Review reported in December 2019. The Government accepted most of its recommendations which
removed some people from the remit of the Loan Charge, but not others.
The Morse Review has been presented by the Government as independent. It was titled as the
“Independent Loan Charge Review” and has now been used by the Government to justify making no
further changes to the Loan Charge despite there being thousands of people still facing huge bills for
tax that has never been legally proven to be due and despite the ongoing risk of suicide, as well as
bankruptcies.
However, internal documentation revealed in a Freedom of Information (FOI) clearly shows direct
interference in the review by both HMRC and the Treasury, and also clearly shows that the review
fails basic tests of what would constitute an independent review into a Government policy. The
information exposes a clear attempt by HMRC and the Treasury to direct the review from the
outset, seeking to influence the choice of ‘independent experts’ used to advise the review by
suggesting that the review avoid those who had appeared in front of Select Committees (most of
whom had been critical of HMRC and of the Loan Charge), and that HMRC then sought to change
the report before publication.
It is notable that HMRC attempted to stall and initially refused to comply with the FOI requests. This
suggests they did not want the content of the emails revealed and now that they have been it is
clear why. Even once published, some documents appear to have been withheld suggesting that
they may contain even more revealing material. HMRC have a history of being reluctant to respond
and to respond fully to FOI requests related to the loan charge and wider ‘disguised remuneration’.
We make no criticism of Sir Amyas Morse, who did his best to deliver a report in what was an
unreasonable timescale (imposed by the Treasury) and with a team made up entirely of HMRC and
Treasury staff. We make clear that we believe he acted with integrity. The issue is the clear direction
set by, and interference with, the Morse Review throughout by HMRC, including senior HMRC
management.
The Morse Review came to an odd conclusion, that experts and Parliamentarians describe as a
compromise, rather than actually coming up with a logical response to the issue. The APPG
examined the Morse Review report in depth and exposed the clear flaws in the justification for the
central conclusion of the Review that the “law was clear” from 2010 when experts themselves
cannot agree on that point. The evidence based APPG report on the Morse Review was published on
19th March 20201.
1 1 Loan Charge APPG, Report on the Morse Review into the Loan Charge – March 2020
--- PDF page 4 ---
4
It seems likely that this flawed conclusion is a direct result of the interference now exposed and a
predetermined desire for a ‘compromise’ outcome. This further undermines what many experts and
Parliamentarians had already said was a flawed conclusion.
2. Background
2.1 Review Terms of Reference
The scope and objectives of the review, as set out in the published Terms of Reference2, were
deliberately limited and narrowly defined to thwart the potential for any more extensive
recommendations which might possibly emerge. The APPG raised concerns in our letter to the
former Chancellor dated 18th September 20193 regarding the scope of the review and the manner in
which the Terms of Reference were announced. This includes the use of biased language and the use
of emotive terms.
One very notable absence from the Morse Report is a full and proper examination of the conduct of
HMRC, their treatment of taxpayers and their communications around the Loan Charge. This is very
odd considering the huge amount of evidence sent to the Review Secretariat Team of many
hundreds of cases where HMRC’s behaviour had been complained about by individuals, tax advisers,
the APPG and others. It is also a glaring omission that the Morse Review doesn’t deal at all with the
clear disinformation issued by HMRC. This has been exposed in numerous reports and
communications, such as the APPG’s Loan Charge Inquiry4, a letter to the then Permanent Secretary
and Chief Executive Sir Jonathan Thompson5 (to which we never received proper answers), and the
APPG’s report into HMRC’s misleading Press Releases6.
We made clear that this disinformation must be the subject of a proper investigation, as part of any
meaningful inquiry, yet the terms of reference were drafted in way that allowed the Review (and the
Review Secretariat team of HMRC staff) to ignore it.
2.2 The Morse Review Secretariat Team – HMRC employees
The Morse Review secretariat team included two HMRC employees, seconded briefly to work on the
review whilst remaining HMRC employees and knowing they would soon be back working for HMRC
and answerable to HMRC senior officers, whose work was – or was supposed to be – being
scrutinised by the Morse Review. The APPG made clear at the time that it believed it was wholly
inappropriate for a supposedly independent review to be staffed by HMRC employees7.
The Review secretariat team was comprised entirely of HMRC and Treasury staff who were “loaned”
to the Loan Charge Review Secretariat and appear to have been appointed prior even to Sir Amyas’s
own appointment. The primary contact and lead co-ordinator for the Loan Charge Review Secretariat
was one Siobhan Jones – a senior Treasury official. Siobhan Jones’s LinkedIn profile shows her role as
“Deputy Director, Public Spending” since December 2016, a role which she appears to have returned
directly to following the completion of the Review (in fact, the profile listing does not indicate that
Siobhan Jones was seconded from the Treasury to the Review and appears as one unbroken role at
the Treasury). It is hard to understand how this could be regarded as proper independence from
2 Gov.uk, Independent Loan Charge Review: terms of reference
3 Loan Charge APPG, 2019-09-18 Letter from Loan Charge APPG to the Chancellor regarding the Loan Charge Review
4 Loan Charge APPG, Loan Charge Inquiry Report – April 2019
5 Loan Charge APPG, 2019-04-02 Letter from LC APPG letter to Sir Jon Thompson (re campaign of misinformation)
6 Loan Charge APPG, HMRC’s misleading press releases and the HMRC campaign of disinformation over their failure to
take action against promoters of loan schemes – March 2020
7 Loan Charge APPG, 2019-09-18 Letter from Loan Charge APPG to the Chancellor regarding the Loan Charge Review
--- PDF page 5 ---
5
HMRC and the Treasury. How could such staff members entirely divorce themselves from the culture
and policies of their department, which they would then return to after only a few weeks?
Considering that the conduct and misinformation of HMRC has been a huge issue of concern, to have
HMRC staff (who would then return to HMRC and be answerable to HMRC senior officers) working
on this review was always wholly inappropriate for an independent review. However, it is what the
FOIs reveal that prove beyond any reasonable doubt that the Morse Review cannot be regarded as
having been properly independent and that it fails basic tests of what would be considered essential
for any review to be regarded as such.
3. Internal Correspondence Exposed by the FOIs
The two Freedom of Information Requests revealed emails exchanged by the Morse Review
secretariat team with both HMRC and the Treasury 8 9.
The content, tone and direct requests made by HMRC to the Morse Review secretariat expose the
interference with the Morse Review by HMRC and the Treasury before it began, during its operation
and after the report was finished but prior to its publication.
The key points revealed are as follows:
• HMRC and the Treasury sought to influence the review from before the start of the review
until the date that the final report was issued.
• The Review secretariat team had an improperly close working relationship with HMRC and
Treasury staff.
• There was collaboration between the Treasury and the Review over dealing with the press, in
at least one case lines were provided for the review team/Sir Amyas to use and
extraordinarily, the Review secretariat discussed responses to press approaches with the
Chancellor’s press secretary, and received and used suggestions from the Treasury as to how
to respond to the press.
• The Treasury sought to influence the choice of experts appointed to advise the review,
suggesting that those who have spoken before Select Committees should be avoided.
Notably, experts appearing before Select Committees who have been critical of the Loan
Charge and of HMRC. This can be seen to be an attempt to steer the review away from any
experts who were known to be critical.
• The Review secretariat team afforded HMRC and the Treasury privileged early access to the
report’s conclusions. This early access was not extended to other interested parties who were
not given any opportunity to raise concerns on its factual accuracy.
Each of these points is based on the evidence contained in the emails disclosed through the FOI
requests. These are evidenced in this report.
8 WhatDoTheyKnow.com, All correspondence between Sir Amyas Morse and HM Treasury on the Loan Charge
Independent review
9 WhatDoTheyKnow.com, All correspondence between Sir Amyas Morse and HMRC on the Loan Charge Independent
review
--- PDF page 6 ---
6
The APPG would like to thank Mr Simon Owen for submitting these Freedom of Information
applications which have provided this very valuable insight.
4. HMRC and Treasury attempts to influence the review prior to Sir Amyas’s appointment
It is clear from the correspondence that both the Treasury and HMRC sought to dictate and prejudice the
approach and outcome of this review.
Even prior to Sir Amyas’s appointment, the narrative was being established by the Treasury. An email
sent to Tom Scholar, the Treasury Permanent Secretary, by Beth Russell, Tax and Welfare Director
General, on 6th September outlined a “script” to be used during the approach to Sir Amyas to ask him
to lead the review10. The script includes the following:
Most shockingly, the script says that the reviewer must ‘understand the wider politics’, which
implies that the reviewer should make a political decision in their recommendations rather than
exercising true independent judgment.
It appears that the Treasury were looking for someone who would reach the “right” conclusions.
The APPG is aware of concerns raised by the former MP for Eastbourne at the time that Sir Amyas
was appointed about his previous comments on the issue of tax avoidance and possible close links to
HMRC staff11. This was the subject of an article in the Daily Telegraph on 21st September 201912. Sir
Amyas declined to comment on this when approached by the Daily Telegraph13.
5. First Morse Review meeting – with HMRC and the Treasury
Correspondence shows that HMRC and the Treasury proposed and directed that on the first day that
Sir Amyas worked on the review, he should be given the government’s views, which is what
happened on 12th September 2019.
10 FOI2020 00559 Attachment 1 of 2, 2.
11 Google Drive, 2019-09-19 - Letter from Stephen Lloyd MP to Sajid Javid re Public concerns around Sir Amyas Morse as
Chair of the Loan Charge Review
12 Daily Telegraph, Leader of loan charge inquiry 'may have secret channels with HMRC', 21 September 2019
13 FOI2020 00559 Attachment 1 of 2, 36.
--- PDF page 7 ---
7
An agenda for the meeting14 shows that following a short introduction to the “Review secretariat
team” (who appear to have been appointed prior to Sir Amyas’s arrival) Sir Amyas went straight into
a meeting lasting nearly three hours with Treasury and HMRC officials. This provided the opportunity
for them to put the government’s view of the history of the tax issues and the way in which the Loan
Charge works. Our own experience in dealing with Treasury and HMRC misinformation regarding this
subject gives us cause for significant concern as to the content of this briefing, at a time when Sir
Amyas Morse should have been looking at the issues as a whole and deciding for himself how to
proceed.
Emails sent by the Treasury to the Review secretariat team on 24th September confirm that the final
version of the ‘Review Framework’ document included an addition to ‘reflect the Treasury/HMRC’s
right to provide evidence to the review that has not been requested’15. This provides further proof
that the Treasury and HMRC intended to further reinforce their own view and influence the outcome
to their advantage.
6. Relationship between the Review secretariat team and HMRC/Treasury
The FOI documents show that the Review secretariat team were very keen to ensure that the review
was ‘seen’ to be independent, yet exchanges between the 11th and 12th September seek to establish
‘ground rules for interaction between the Review secretariat team and the Treasury/HMRC’.
However, these ‘ground rules’ actually allow for a very close working relationship, clearly
inappropriate for an independent review even if Treasury and HMRC staff were not staffing the Loan
Charge Review secretariat.
Discussions between the Review secretariat team and the Treasury on 5th November relate to the
sensitivities of wording around the approach to communications, with phrasing such as ‘Loan Charge
remains in force’ being replaced by ‘Loan Charge remains in operation’ due to the ‘connotations’ of
the former16. It is very odd that an ‘independent’ review body should be involved in discussions of
this nature, which clearly relate to public relations presentation and for HMRC to seek to dictate this
shows a clear attempt to soften the phrasing to avoid a negative connotation of the very policy that
the Review was reviewing!
7. Treasury press office handling press matters on behalf of the review
An independent review, as the APPG made clear all along, should never have been staffed by people
employed by the department responsible for the policies which are in the scope of the review.
As part of maintaining basic independence, the Review should have had an independent press officer
who was not an employee of HMRC, or of the Treasury, or the Review should have engaged a PR
consultant or consultancy with no links to HMRC or to the Treasury.
Yet not only was this not done but there was collaboration between the Review team and press
officers of Treasury, including disgracefully in one documented case, press ‘lines’ being provided by
the Treasury for Sir Amyas to use. This is so clearly inappropriate for a supposedly independent
review and on its own, shatters any pretence that the Morse Review as conducted can be seen to be
independent.
14 FOI2020 00559 Attachment 2 of 2, 198.
15 FOI2020 00559 Attachment 1 of 2, 43.
16 FOI2020 00559 Attachment 1 of 2, 89.
--- PDF page 8 ---
8
Even more extraordinarily, the Chancellor’s own Press Secretary was involved in dealing with press
enquiries made to Sir Amyas Morse as shown above. The Treasury also provided lines for Sir Amyas
Morse to use with the press.
This is a review of a controversial policy introduced and defended by the Treasury, so to have a
senior Treasury press officer working with the Secretariat team is staggering.
7.1 Inappropriate Involvement of the Chancellor’s Press Secretary in press contacts with the Review
team and evidence of general collaboration
The Review secretariat team consulted with and worked with the Treasury when dealing with press
contacts. Olaf Henricson-Bell, the Chancellor’s press secretary, was copied into a number of emails.
Most notably, following an approach from a reporter for the Telegraph on 18th September asking Sir
Amyas to respond to a number of questions, Olaf Henricson-Bell suggested that he respond rather
than Sir Amyas. The Review secretariat team then corresponded with Olaf Henricson Bell and
discussed the reply to be issued by the Treasury, not on behalf of Sir Amyas. The Review secretariat
team asked for several tweaks to be made before it was sent and an unnamed person in the
Treasury made the following suggestion which was not accepted17.
On 26th and 27th September there were emails exchanged between the Review secretariat team and
Olaf Henricson-Bell discussing the use of an internal ‘highly experienced PR/media adviser’, with the
initial plan being to use a person from the Office of Tax Simplification (this appears to have been
rejected as the OTS uses HMRC to handle the press).
This email chain ends with a friendly exchange that betrays the lack of appropriate separation
between the Chancellor’s press secretary and the Review secretariat team and also clearly shows
that the Chancellor’s press secretary was being asked to deal with the press for the Review team18.
The email from the from the Chancellor’s press secretary is ‘You owe us beers’ and the reply from
the Review Secretariat who were asking for help was, ‘…very happy to line up the beers’. This is
manifestly inappropriate, for what is supposed to be a review, independent of the Treasury.
17 FOI2020 00559 Attachment 1 of 2, 34.
18 FOI2020 00559 Attachment 1 of 2, 54.
--- PDF page 9 ---
9
There is also the curious reference to ‘help with the independence point as we discussed before’
which suggests that both parties recognised that questions around the independence of the Review
secretariat team were continuing to be a concern and were not easily dismissed.
7.2 Assistance with ‘lines’ for HMRC to use before Select Committee appearance
On 16th October, HMRC met the Treasury Select Committee. This was preceded by communications
with the Review secretariat team to clear ‘lines’ to be used in answer. The Review secretariat team
in fact suggested changes to these proposed lines19:
7.3 Assistance with ‘lines’ for Sir Amyas Morse to use with the press
An email on 5th November includes a reference to a ‘final pack’ for the Financial Secretary to the
Treasury [FST] to clear – from the context we believe this to be in reference to the 2019 General
Election and the need for a delay to the review. A second email on the same day says that Sir Amyas
Morse raised a question about whether the ‘general line’ on tax avoidance risked inflaming things,
but then stated that was a judgment for ministers. Sir Amyas Morse had also requested pre-
prepared lines in the event of any questions, which the Review secretariat team confirmed they
would draft and share with the Treasury to ensure that “…they don’t cause you any problems”20:
19 FOI2020 00559 Attachment 1 of 2, 76.
20 FOI2020 00559 Attachment 1 of 2, 90.
--- PDF page 10 ---
10
This provides a clear indication that there was collaboration between the Review secretariat team
and the Treasury whilst maintaining the entirely false public position that this review was being
conducted independently.
Indeed, the lines were subsequently confirmed by the Review secretariat team and shared “in
parallel” with the Treasury and Sir Amyas Morse21:
These responses included an affirmation that regardless of the additional time afforded to the
review by the announcement of a General Election, Sir Amyas Morse was advised to state:
This suggests that despite the opportunity to delve further into this complex issue and to review
further evidence, the outcome had already been determined. The Treasury clearly provided the final
version of these ‘lines’ and requested that the Review secretariat team ensured Sir Amyas Morse
was sighted on these should he be asked to comment.
Overall, this clear collaboration is completely inappropriate and further demonstrates that the
Review secretariat team were not independent of the Treasury.
8. Pre-approval of members of the expert panel
On the 12th September, Sir Amyas expressed a desire for a committee of independent experts to
form a ‘sounding board’ for his review. The Review secretariat team wrote the following day to
undisclosed persons in the Treasury seeking their views on a list of potential candidates, mentioning
the conversation with Sir Amyas.22 Most of the names have been redacted, but two who were
subsequently appointed, Graeme Nuttall and Heather Self, were on this initial list.
Graeme Nuttall is described as a ‘Tax advisor [sic] specialising in Equity Incentives and Employee
Benefit Trusts’. We find this surprising as we are unable to find that Mr Nuttall has published any
comment on the Loan Charge. He published three articles in Tax Journal in 2014, which is prior to the
21 FOI2020 00559 Attachment 1 of 2, 92.
22 FOI2020 00559 Attachment 1 of 2, 22.
--- PDF page 11 ---
11
Rangers FC court decisions or the Loan Charge legislation being enacted. It is unclear what
experience Mr Nuttall has with the issues in scope of the review. Documents attached to the email
of the 25th September also state that there will be no payment made for this role23, so we consider it
unlikely that Mr Nuttall will have conducted extensive research for his role outside of his other work.
Heather Self is described as a ‘Tax advisor [sic] specialising in corporate tax; ex-HMRC anti-avoidance
team’. This is again odd as the matter being discussed in not a corporate tax issue. We have written
elsewhere that our subsequent correspondence with Heather Self revealed that she was not aware
of the existence of different variants of loan arrangements, in particular self-employed
arrangements. It is also very strange that the Review secretariat team considered a former member
of the team in HMRC which is very much in scope of the review, and whose actions we have called
into question, as being independent.
David Goldberg QC’s name (the third person appointed to assist Sir Amyas) is not visible in the list on
the email. It is possible that his name was one of the fifteen which were redacted, or that it was not
included. Mr Goldberg co-authored an article in July 2017 on the Rangers FC ruling by the Supreme
Court. Despite criticising the logic in the ruling, the authors’ views of the loan arrangements are
made quite clear in the penultimate paragraph:24
This is a view that Mr Goldberg is entitled to, but it does call into question whether he already had
made up his mind on this issue and whether HMRC and the Treasury would know his already formed
views.
On the 25th September the Review secretariat team emailed 25 individuals in the Treasury who are
described as having been “all involved in helping us to appoint Sir Amyas Morse” asking if they had
any issues with the plan to appoint this unofficial board of advisers25:
It has also recently come to light that during face to face discussions between Sir Amyas and a
barrister, Keith Gordon, who has been highly critical of the Loan Charge and of HMRC, Sir Amyas
23 FOI2020 00559 Attachment 2 of 2, 215.
24 Tax Journal, 13 July 2017, https://www.taxjournal.com/articles/rangers-fc-case-payments-remuneration-trust-were-
themselves-remuneration-13072017
25 FOI2020 00559 Attachment 1 of 2, 47.
--- PDF page 12 ---
12
offered Mr Gordon to be one of the members of this panel. Mr Gordon tweeted that following the
initial offer, which he eventually expressed his interest in, the offer was then dropped26:
It is telling that the Review secretariat team appears to have been concerned that the Treasury
might object to their choice of experts for this panel and that only experts who were either not close
to the subject matter or who had expressed views in line with those of the Government were
eventually appointed. A reply from a Treasury civil servant on 16th September may be relevant to
why Keith Gordon was not appointed to this board of advisers27:
This appears very strange as the reason for people to appear before a Select Committee on this issue
is precisely because they have relevant views which the committee wished to hear. If anything, it
should be a factor in favour of their taking part in this board even if only to ensure the correct
balance of views.
9. HMRC and Treasury input into the report conclusions
The Treasury wrote to the Review secretariat team on 4th October, with a reference to Treasury
colleagues who “will be able to provide additional advice you may require on the Loan Charge
Review’s data, especially with regard to the Review’s conclusion”28.
26 Twitter, 9th June 2020.
27 FOI2020 0053 EMAILS REDACTED FINAL, 199.
28 FOI2020 00559 Attachment 1 of 2, 67.
--- PDF page 13 ---
13
This calls into question the statements that Sir Amyas Morse’s conclusions and recommendations
would be wholly independent.
According to email exchanges on 30th October between the Review secretariat team and the
Treasury, Sir Amyas Morse was “strongly of the view that it is in everyone’s interests, government
and taxpayers, to publish the review and government response as soon as possible and before
Dissolution”– referring to the 2019 General Election29. This clearly implies that the recommendations
had already been reached by this date and that the review was ready for publication almost two
months before it was finally released. Given the complexity and concern around the Loan Charge
legislation, this is a staggering revelation and suggests that the review reached its conclusions in an
incredibly short period of time for an issue of such complexity.
The Review secretariat team contacted the Treasury and HMRC on 29th November to confirm that,
following review by external legal and tax advisers, the ‘final’ version of the Loan Charge Review
Report would be ready and available on 9th December for review by up to five people each from the
Treasury and from HMRC (ten in total)30. The Treasury responded by confirming it would be
discussed across their policy partnership and emphasised that ‘demand was likely to exceed supply’
in relation to this invitation. This was apparently being arranged in order to inform briefings for
newly incoming ministers, and to raise comments on the report. This gave the Treasury and HMRC
sufficient opportunity to provide feedback on any contentious findings and recommendations. It
allowed the Treasury and HMRC advance notification prior to publication. It is notable that the Loan
Charge Action Group, the Loan Charge APPG and other parties were not provided such right of reply
to point out factual errors which exist in the report – errors which were later brought to light
through the APPG’s own investigations and report published on the Morse Review31. This is clearly
not reflective of an ‘independent’ review or outcome, as the primary instigators of this policy were
given first sight of this report rather than it being shared with all interested parties on the date of
publication.
The Review secretariat team exchanged emails with senior Treasury staff members on 11th
December to confirm various discussions and comments on the report. These exchanges culminated
in an agreement to speak on the phone – no further details of this phone call are available in the
emails disclosed via the FOI requests.
29 FOI2020 00559 Attachment 1 of 2, 85.
30 FOI2020 00559 Attachment 1 of 2, 117.
31 Loan Charge APPG, Report on the Morse Review into the Loan Charge – March 2020
--- PDF page 14 ---
14
Jim Harra (First Permanent Secretary and Chief Executive of HMRC) then wrote to Sir Amyas Morse
on 12th December to communicate his dissatisfaction at any criticism of HMRC in relation to three
key areas of concern; his view that any comments on tax avoidance should be phrased according to
his preferred message, the evidence base of those submissions which did not emerge from the
Treasury or HMRC (which were roundly condemned as selective, inaccurate and lacking balance and
proportionality) and challenging all the allegations about HMRC staff and any inappropriate
behaviour32.
All points raised were acknowledged by the Review secretariat team in an email response the
following day and we are led to believe that the report remained unchanged. However, this attempt
to influence the content of the report is yet another example of the way in which senior officials
within HMRC sought to distort the tone, agenda, direction and outcome of the supposedly
independent review. To our knowledge, no opportunity to comment on factual errors contained in
the report was granted to either the Loan Charge All-Party Parliamentary Group, the Loan Charge
Action Group, or any other organisation or individual with an immediate interest in the
recommendations contained within the report.
The Director General of Tax and Welfare at the Treasury sent their thanks to the Review secretariat
team on 12th December for “relaying our comments/concerns over the last few days” and offered
their hearty congratulations in “getting this to the finish line”.33
This is not an exchange we would expect to take place in the face of a supposed independent review,
where the Review secretariat team was duty-bound to provide only administrative support and
32 FOI2020 00559 Attachment 1 of 2, 124.
33 FOI2020 00559 Attachment 1 of 2, 123.
--- PDF page 15 ---
15
assistance to the appointed Reviewer. Unless, of course, the outcome was exactly as the Treasury
had wished.
Upon confirmation from the Review secretariat team that the report was ready for review by the
Chancellor on 17th December, the same Director General of Tax and Welfare from the Treasury
returned their congratulations and thanks to the wider Review secretariat team for a “really
comprehensive piece of work”, suggesting that the outcome which had been delivered met with
their welcome agreement and approval.34
10. Conclusion
Taken altogether, it is clear that the Morse Review fails the basic tests of what would constitute an
independent review and that HMRC and the Treasury had inappropriate influence, direction and in
some cases direct involvement.
The APPG previously raised concerns that the Review secretariat team being drawn solely from
HMRC and the Treasury undermines the independence of the review; these concerns were well
founded. The evidence unequivocally points to a close, clear, and undeniable relationship between
the Loan Charge Review secretariat team and both the Treasury and HMRC.
These facts should be understood and acknowledged by all persons with an interest in the claim that
this was an entirely independent review by an impartial lead reviewer. The APPG itself has been
attacked by the Financial Secretary to the Treasury as not being independent35:
This is a clear attempt to side-line the APPG’s reports in favour of the Morse Review, but it is clear
from the evidence that the Morse Review secretariat team themselves were not independent.
34 FOI2020 00559 Attachment 1 of 2, 129.
35 Finance Bill (Second sitting), 4th June 2020, Col. 38 – Jesse Norman
--- PDF page 16 ---
16
As a final closing point to add to the numerous prior entries, which clearly negate the claim that this
review was independent, we note that Tom Scholar (Permanent Secretary to the Treasury) wrote to
Sir Amyas Morse on 6th January 202036. He offered his “very warm thanks” to Sir Amyas for taking on
the task and “steering it to a conclusion”, referencing the considerable personal cost he felt Sir
Amyas Morse had suffered after having to speak to some “very distressed” individuals. He confirmed
that the Review secretariat team had all enjoyed working with Sir Amyas Morse and found him to be
“an excellent and collaborative colleague”. This was followed by a statement that the review:
This was a reply to this email from Sir Amyas Morse:
Sir Amyas Morse responded by confirming the team were ‘very impressive, very nice and such fun to
work with’. Hardly comments which one would expect from someone who had supposedly suffered
considerable personal cost due to the task set before him and the distressed individuals who might
have left their mark as a result of the experience. They concluded by agreeing to meet up when the
opportunity next arose.
The clear conclusion to be drawn is that the Morse Review is compromised and its conclusions
discredited. It came to a fundamentally flawed conclusion to remove part of the retrospection of the
Loan Charge, but to leave it in place going back to 2010, leaving many people facing huge bills for tax
that has never been legally proven to be due from them.
The APPG has previously led calls by members for a proper independent inquiry led by an
experienced tax judge with knowledge of the relevant law. It is now clear that the Morse Review
cannot be regarded as independent so we reiterate this call. This must also look at the areas that
were excluded from or not examined by the Morse Review, including (1) an examination of how the
Loan Charge was introduced in the first place (which is still not clear), (2) a full and proper
investigation into HMRC’s treatment of individuals, including each case where someone took their
36 FOI2020 00559 Attachment 1 of 2, 133.
--- PDF page 17 ---
17
own life, and (3) the clear disinformation of HMRC as exposed in numerous reports and
communications.
Loan Charge APPG
29th June 2020
--- PDF page 18 ---
18
Appendix – FOI requests and responses
FOI request for correspondence between the Review secretariat team and the Treasury -
https://www.whatdotheyknow.com/request/all_correspondence_between_sir_a
Email text provided – FOI2020 00559 Attachment 1 of 2 -
https://www.whatdotheyknow.com/request/633519/response/1563550/attach/4/FOI2020 00559
Attachment 1 of 2.pdf
Attachments provided – FOI2020 00559 Attachment 2 of 2.pdf -
https://www.whatdotheyknow.com/request/633519/response/1563550/attach/5/FOI2020 00559
Attachment 2 of 2.pdf
FOI request for correspondence between the Review secretariat team and the HMRC -
https://www.whatdotheyknow.com/request/all_correspondence_between_sir_a_2
Email text provided – FOI2020 0053 EMAILS REDACTED FINAL -
https://www.whatdotheyknow.com/request/633520/response/1563630/attach/3/FOI2020 0053 EMAILS
REDACTED FINAL.pdf
Attachments provided –FOI2020 0053 ATTACHMENTS REDACTED Final -
https://www.whatdotheyknow.com/request/633520/response/1563626/attach/4/FOI2020 0053
ATTACHMENTS REDACTED Final.pdf
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ATTACHMENT: 2022-02-04-LCAG-further-letter-to-Lord-Morse-February-2022-final.pdf
TEXT_FILE: 2022-02-04-LCAG-further-letter-to-Lord-Morse-February-2022-final.pdf.txt
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The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
The Lord Morse KCB
House of Lords
London
SW1A 0PW
4th February 2022
Dear Lord Morse,
Lack of response to our letter sent in October about evidence not known at the time of
your Loan Charge review
We are writing to you, once again, due to the fact that we have still not yet received a response
to our letter to you of 21 October 2021.
Our letter went into considerable details, all of which are pertinent not only to us, the Loan
Charge Action Group, but to a huge sector of the general public all who remain seriously affected
by this unjust and retrospective policy. We are both surprised and disappointed not to have had
a response from you, or even an acknowledgement.
As you know, Greg Wright the Deputy Business Editor of the Yorkshire Post, who has taken a
keen interest in the Loan Charge, has tried to contact you five times to find out if and when you
intend to respond, yet you have not so far replied to any of his calls or messages.
You met with a number of people facing the Loan Charge, including members of the LCAG, all
who were vulnerable, frightened and quite frankly desperate at the life-ruining bills they face,
with no right to challenge them, nor access to the normal legal process. They felt the weight of
responsibility to try to represent so many thousands of others who are affected by this
nightmarish situation that we all long to wake up from. They felt that you were empathetic and
wanted to do what you could to right this wrong.
The simple fact is that the majority of people facing the Loan Charge have not been helped by
your review at all and now face bankruptcy with HMRC set to enforce it this year, as well as
many people having settled on unfair and draconian terms to avoid it. Now that it has been
proven beyond any reasonable doubt that the law was not clear, you surely must be prepared
to acknowledge this and back calls for a further review (one not staffed or influenced by HMRC
or the Treasury) and most importantly, a genuine resolution to the situation people are in,
something that alas, despite your apparent intent, your review failed to recommend.
We have been told, on more than one occasion, that you are a man of integrity and we would
presume and hope that you will look fully and properly at the considerable amount of evidence
that has emerged since you conducted your review, that means that some of your conclusions
were flawed and therefore must be revisited. If you require more time to study this evidence,
then of course we understand that, please just send us an acknowledgement to that effect.
In addition, you need to be aware of – and we hope will comment on – the clear and deliberate
way in which HMRC have undermined and failed to honour your recommendation to refund
those who had made payments for pre-2010 loans, that you ruled out of scope of the Loan
Charge.
--- PDF page 2 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
HMRC quote grand figures of how many people will have their ‘liabilities’ reduced as a result of
your review. Yet the reality is very different. The below mentioned Freedom of Information
response show that just 740 people have received their hard-earned money back as a result of
your review. That is hardly the thousands that were promised.
In addition, you made clear that if people had ‘disclosed correctly’ post 2016 that they would
not be in scope of the Loan Charge.
“I therefore recommend that taxpayers who made reasonable disclosure of their scheme
usage, but for whom the relevant year is unprotected, should not have that Unprotected
Year included in the scope of the Loan Charge. Those taxpayers who did not make
reasonable disclosure, and for whom the relevant year is unprotected as a result, should
have that Unprotected Year included in the scope of the Loan Charge. From March 2016
onward – when the Loan Charge was announced – HMRC made a reasonable assumption
that they need not continue protecting years in which they identified usage of loan
schemes. I am therefore also recommending that Unprotected Years from the start of the
2016-17 tax year onwards should continue to automatically be within the scope of the Loan
Charge.”
See
https://www.whatdotheyknow.com/request/745869/response/1909878/attach/3/202111
05%20FOI2021%2024050.pdf?cookie_passthrough=1
The same FOI response shows that just 10 people meet these criteria.
Since conducting this review you have been made a Lord and, of course now, a Parliamentarian
with the duty of scrutinising legislation and the Government, including HMRC and the Treasury.
Due to the fact that it is clear that key evidence was withheld from you at the time of your review
and that it is now clear that HMRC are not even implementing the recommendations you did
make, you must surely be prepared to speak up publicly about this, to avoid you yourself facing
criticism.
We hope therefore, to receive a full reply, or at least for now an acknowledgement that one will
be sent once you have fully digested the contents of our previous letter and the significant
amount of evidence contained within it. This is all now freely in the public domain, unlike in
2019. We do require a response from you, as an appointed public servant and Parliamentarian
and do not wish to receive a reply from the Treasury or HMRC on your behalf as we are both
writing, and appealing to you, as an individual and a Parliamentarian.
We look forward to hearing from you.
Yours sincerely,
Steve Packham
Andrew Earnshaw
Spokesman & Executive Director
Executive Director
On behalf of the Loan Charge Action Group
--- PDF page 3 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
Cc
The Loan Charge and Taxpayers APPG
All members of the House of Lords Economic Affairs Committee
All members of the House of Commons Treasury Select Committee
James Murray MP, Shadow Financial Secretary (Treasury)
--------------------------------------------------------------------------------
ATTACHMENT: FOI2021_25911_FOI_Response_Issued_2021_12_02.pdf
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--- PDF page 1 ---
Information Rights Unit
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
F Thompson
Dear F Thompson
020 7270 5000
foirequests@hmtreasury.gov.uk
www.gov.uk/hm-treasury
2 December 2021
Ref: FOI2021/25911
Freedom of Information Act 2000
Thank you for your enquiry of 4 November 2021, which we have considered under the
terms of the Freedom of Information Act 2000 (the FOI Act).
You asked for the following information:
“You responded to my recent FOI request (reference FOI2021/15854) on 01
September 2021, refusing to disclose the information requested and claiming
exemption under sections 36(2)(b)(i), 36(2)(b)(ii) and 36(2)(c) of the FOIA.
As a consequence, please now disclose:
1) the name of the qualified person who provided that opinion, where qualified
person, in relation to information held by a government department in the charge of
a Minister of the Crown, means any Minister of the Crown; or, in relation to
information held by any other government department, means the commissioners or
other person in charge of that department.
2) the full and unabridged text of that qualified person’s opinion, and all recorded
information, of any type or in any format, which contains submissions (or exchanges
of opinion) provided to the qualified person for considering that request.
3) all metadata held in any recorded form by the department which relates to my
original request (reference FOI2021/09786), the subsequent request
(FOI2021/15854), the next allocated request (reference FOI2021/22729) and the
recently allocated internal review (reference IR2021/25860).”
Following a search of our records, we can confirm that HM Treasury does hold information
within the scope of your request.
However, your request is very wide in scope. Our search has identified a large number of
documents to consider. In order to comply with your request we would need to review
each document separately with a view to determining whether any information was
exempt from release, for example, due to sensitivities or personal data, and to then redact
any exempt material.
The effort required to review, assess and extract that information would be considerable
and would require a disproportionate level of staff effort. We therefore consider that the
request engages section 14(1) of the Freedom of Information Act due to the
disproportionate effort that would be required to comply with the request.
--- PDF page 2 ---
It may be that if you were to amend your request, for example, by narrowing the focus
and being more specific about the type of information that you are particularly interested
in we may be able to comply with a future request. However, I cannot guarantee that this
would be the case.
You may find it helpful to refer to the Information Commissioner’s guidance to requesters
which can be found online at:
https://ico.org.uk/for-the-public/official-information/
To be helpful, we can confirm that the minister with responsibility for departmental
matters is the Exchequer Secretary to the Treasury, who is therefore the ‘qualified person;
in relation to HM Treasury.
If you have any queries about this letter, please contact us. Please quote the reference
number above in any future communications.
Yours sincerely
Information Rights Unit
--- PDF page 3 ---
Copyright notice
Most documents HM Treasury supplies in response to a Freedom of Information request,
including this letter, continue to be protected by Crown copyright. This is because they will
have been produced by Government officials as part of their work. You are free to use
these documents for your information, for any non-commercial research you may be doing
and for news reporting. Any other re-use, for example commercial publication, will require
the permission of the copyright holder. Crown copyright is managed by The National
Archives and you can find details on the arrangements for re-using Crown copyright
material at: http://www.nationalarchives.gov.uk/information-management/re-using-public-
sector-information/uk-government-licensing-framework/crown-copyright/
Your right to complain under the Freedom of Information Act 2000
If you are not happy with this reply, you can request a review by writing to HM Treasury,
Information Rights Unit, 1 Horse Guards Road, London SW1A 2HQ or by emailing us at the
address below. Any review request must be made within 40 working days of the date of
this letter.
Email: foirequests@hmtreasury.gov.uk
It would assist our review if you set out which aspects of the reply concern you and why
you are dissatisfied.
If you are not content with the outcome of the review, you may apply directly to the
Information Commissioner for a decision. Generally, the Commissioner will not make a
decision unless you have exhausted the complaints procedure provided by HM Treasury
which is outlined above.
The Information Commissioner can be contacted at: The Information Commissioner’s
Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF (or via their website at:
https://ico.org.uk).
--------------------------------------------------------------------------------
ATTACHMENT: FOI2021_27262.pdf
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--- PDF page 1 ---
If you need extra support, for example if you have a disability, a mental health condition, or
do not speak English/Welsh, go to www.gov.uk and search for ‘get help from HMRC’.
Text Relay service prefix number – 18001
OFFICIAL
Freedom of Information Team
S1715
6 Floor
Central Mail Unit
Newcastle Upon Tyne
NE98 1ZZ
Mr Mike Howard
By email: request-802279-
97c267d8@whatdotheyknow.com
Email
foi.request@hmrc.gov.uk
Web
www.gov.uk
Date:
Our ref:
25 February 2022
FOI2021/27262
Dear Mr Howard
Freedom of Information Act 2000 (FOIA)
Thank you for your request, which was received on 10 November, for the following
information:
“Thank you for your response.
1) I would ask that you check the results as the pattern of sending and receiving is very
peculiar. The supplied breakdown shows that this individual appears to have been sending
literally hundreds of emails on the target subjects each month from January through to
August, eight months without receiving a response.
After August there appears to be a far more normal profile of email activity As an interim :-
2) Please provide the 13 emails received in August 2019 with the search term "Loan
Charge"
3) Please provide the 6 emails received in August 2019 with the search term "LC"”
Our response
In response to your first question, we can advise that the information previously provided to
you is an accurate representation of the records available.
HMRC does not have a retention period specific to emails. The retention period of an email
depends on its content rather than the fact it is an email. HMRC email accounts are a means
of communication rather than a document repository, where the content of an email is to be
retained this should be in the file to which the information relates.
The information requested in your remaining questions has been provided as an annex to
this letter. Some of the information has been withheld under FOIA exemptions, an
explanation of this is provided below:
Personal information
Where requested information contains the personal information of officials or members of
the public to a degree which is contrary to their expectation of privacy, this has been
withheld under section 40(2) FOIA.
Section 40(2) of the FOI Act, by virtue of section 40(3A) provides an absolute exemption for
third party personal data, where disclosure would contravene any of the data protection
--- PDF page 2 ---
2
OFFICIAL
principles set out in Article 5 of the General Data Protection Regulation. The first data
protection principle requires the disclosure of third-party personal data to be lawful, fair and
transparent. We believe that releasing the information would breach the first data protection
principle, since it would be unlawful and unfair to release the information.
The exemption in section 40(2) is absolute, meaning that there is no need to weigh up the
public interest in releasing the information against the public interest in maintaining the
exemption.
Revenue and customs information relating to a person
Requested information which constitutes ‘revenue and customs information relating to a
person’, where disclosure would either identify the ‘person’ or would enable the identity of
the ‘person’ to be deduced, has been withheld pursuant to section 44(1)(a) FOIA.
In this context, ‘revenue and customs information relating to a person’ means information
about, acquired as a result of, or held in connection with the exercise of a function of the
Revenue and Customs in respect of the person.
Section 44(1)(a) provides:
44 Prohibition on disclosure
(1) Information is exempt information if its disclosure (otherwise that under this Act) by
the public authority holding it –
a)
is prohibited by or under any enactment, ; …
The enactment in this case is the Commissioners of Revenue and Customs Act 2005 (the
CRCA).
Section 18(1) of the CRCA states that HMRC officials may not disclose information which is
held by HMRC in connection with one of its functions.
For the purposes of FOIA, section 18(1) only acts as a statutory prohibition where section
23(1) of the CRCA is also satisfied:
23 Freedom of information
(1) Revenue and customs information relating to a person, the disclosure of which is
prohibited by section 18(1), is exempt information by virtue of section 44(1)(a) of the
Freedom of Information Act 2000 (prohibitions on disclosure) if its disclosure—
(a)
would specify the identity of the person to whom the information relates, or
(b)
would enable the identity of such a person to be deduced.
(1A) Subsections (2) and (3) of section 18 are to be disregarded in determining for
the purposes of subsection (1) of this section whether the disclosure of revenue and
customs information relating to a person is prohibited by subsection (1) of that
section.
(2) Except as specified in subsection (1), information the disclosure of which is
prohibited by section 18(1) is not exempt information for the purposes of section
44(1)(a) of the Freedom of Information Act 2000.
(3) In subsection (1) ‘revenue and customs information relating to a person’ has the
same meaning as in section 19.
Prejudice to the effective conduct of public affairs
Section 36 provides an exemption if disclosure would or would be likely to:
--- PDF page 3 ---
3
OFFICIAL
(a) prejudice collective responsibility or the equivalent in Wales and Northern Ireland;
(b) inhibit the free and frank provision of advice or exchange of views; or
(c) otherwise prejudice the effective conduct of public affairs
Certain information is being withheld because it is considered exempt pursuant to sections
36(2)(b)(i) and (ii) FOIA. This is because its disclosure would be likely to, inhibit the free and
frank provision of advice, and the free and frank exchange of views for the purposes of
deliberation.
In this instance, HMRC’s qualified person considers that release of this would be likely to
inhibit the free and frank provision of advice as well as the free and frank exchange of views
for the purposes of deliberation and might inhibit and undermine the need for a private space
for the purpose of advice and deliberation.
Officials expressing candid views assumed that they were doing so in a confidential safe
space. HMRC considers that disclosure of the withheld information is likely to undermine its
staff’s confidence in this “safe space”, with future discussions on equally sensitive topics
being damaged through the inhibition of free and frank sharing of opinions. HMRC believes
that its staff would be less forthcoming, and their opinions and advice would be tempered or
withheld.
Section 36 is qualified by the public interest. This means that even though the
exemption is considered to be engaged, it is necessary to consider whether the public
interest in maintaining the exemption outweighs the public interest in disclosure.
HMRC accepts that there is a clear public interest in government departments being as open
and transparent as possible, so as to increase accountability and inform public debate.
However, I would argue that there is a more compelling public interest in preserving the safe
space in which officials can deliberate issues and protecting the department’s ability to
operate effectively.
It is also in the public interest for officials to be able to have confidential dialogue
in the execution of their duties and for them to exchange views freely and frankly. Advice
provided and received must be detailed and candid if it is to be of value. For all of this to
occur, officials must be free of any inhibitions that might interfere with their ability to offer
comprehensive input based on free and frank discussion.
If such information were to be disclosed, sensitive issues might not be able to be raised in
the future, for fear that information about such issues might be disclosed and be exposed
prematurely to public scrutiny and comment. Disclosures of the detail of these exchanges
would undermine the quality and nature of this dialogue in the future and would not be in the
public interest.
On balance, I find that the public interest favours withholding the requested information.
In addition to this, the exemption at section 36(2)(c) has been used to withhold certain
contact details which do not constitute personal data.
It is the opinion of HMRC’s qualified person that disclosure of such information would likely
be misused by those so minded and would result in the various departments having to
amend their arrangements.
Whilst HMRC accepts the public interest in government departments being as open
and transparent as possible, we do not consider any wider public interest to be met by the
disclosure of this information. Rather we find the public interest to favour government
departments being able to operate effectively.
The formulation or development of government policy
--- PDF page 4 ---
4
OFFICIAL
Section 35(1)(a) covers information relating to the formulation or development of
government policy:
35(1) Information held by a government department or by the Welsh Assembly
Government is exempt information if it relates to:
(a) the formulation or development of government policy
The exemptions at section 35 are class based. This means that as opposed to prejudice-
based exemptions, demonstrable evidence of the likelihood of prejudice is not a condition for
engaging the exemptions. The withheld information simply has to fall within the class
described, in this case, the formulation or development of government policy. The classes
are broad and capture a wide range of information.
The Information Commissioner’s Office (ICO) considers that the term ‘relates to’ in section
35 can be interpreted broadly within the meaning of the class exemption. This means that
the withheld information does not itself have to be created as part of the activity. Any
significant link between the information and the activity is enough. This means that
information which relates to any significant extent to the formulation or development of policy
will be covered, even if it also relates to policy implementation or other issues.
Policy formulation or development does not have to be the sole or main focus of the
information, as long as it is one significant element of it. However, the exemptions at section
35 are qualified by the public interest test. Even if an exemption is engaged, departments
can only withhold the information if the public interest in maintaining the exemption
outweighs the public interest in disclosure.
The ICO recognises that there is a public interest in maintaining a safe space for officials to
consider policies away from distraction and external interference. The need for a safe space
will be strongest when the issue is still live. Once the government has made the relevant
decisions, a safe space for deliberation will no longer be required and this public interest will
carry little weight. The timing of the request will therefore be an important factor as even
after a policy decision has been made, issues arising during implementation may then
feedback into a policy improvement process, with further decisions being taken during
implementation.
We have balanced the public interest of maintaining this safe space against the public
interest of authorities being transparent and accountable for their actions. In this case, where
information is still part of ongoing policy development and subject to scrutiny from officials,
we are of the view that there remains a strong public interest in maintaining a safe space
and not disclosing this information.
If you are not satisfied with our reply, you may request a review within 40 working days of
receiving this letter by emailing foi.review@hmrc.gov.uk or by writing to our address at the
top.
If you are not content with the outcome of an internal review you can complain to the
Information Commissioner’s Office.
Yours sincerely,
HM Revenue and Customs
--- PDF page 5 ---
OFFICIAL
EMAIL 1 – NO ATTACHMENTS
From:
- HMT [mailto
@hmtreasury.gov.uk]
Sent: 16 August 2019 11:58
To:
(Counter-Avoidance) <
@hmrc.gov.uk>; Submissions To, Ministers
(CS&TD)
; FST, Action - HMT
Cc: Ciniewicz, Penny (CCG Director General) <penny.ciniewicz@hmrc.gov.uk>; Stanier, Ruth (CS&TD
Director General) <ruth.stanier@hmrc.gov.uk>; Aiston, Mary (Counter-Avoidance)
<mary.aiston@hmrc.gov.uk>; Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(FIS Offshore, Corporate & Wealthy) <
@hmrc.gov.uk>;
(Counter-
Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>;
(SOLS) <
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>; Simpson, Chris (Counter-Avoidance)
<christopher.simpson@hmrc.gov.uk>;
(Counter-Avoidance Promoters)
<
@hmrc.gov.uk>;
(Counter-Avoidance Promoters)
<
.
@hmrc.gov.uk>;
(CS&TD) <
.
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>; Holden, Jonathan (HMRC Comms)
<jonathan.holden@hmrc.gov.uk>;
(HMRC Comms CCG Communications)
<
@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>; Tume, Alan (Counter-Avoidance Deputy Director)
<alan.tume@hmrc.gov.uk>; Howe, Mike (ISBC PaCE Deputy Director) <mike.howe@hmrc.gov.uk>;
(ISBC Complex & Agents, Agent Compliance Team) <
@hmrc.gov.uk>;
Bristow, Carol (CS&TD Individuals Policy, Director) <carol.bristow@hmrc.gov.uk>; McGeehan, Jackie
(CS&TD Individuals Policy, Income Tax) <jackie.mcgeehan@hmrc.gov.uk>; Wakeman, Jo (LB)
<jo.wakeman@hmrc.gov.uk>; York, Simon (FIS Director) <simon.york2@hmrc.gov.uk>; Alexander,
Janet (ISBC) <janet.alexander@hmrc.gov.uk>;
(SOLS Strategic Litigation Team)
<
@hmrc.gov.uk>;
(Strategy) <
.
@hmrc.gov.uk>;
Merrington, Mark (SOLS) <mark.merrington@hmrc.gov.uk>; Shuker, John (CS&TD Business, Assets &
International) <john.shuker@hmrc.gov.uk>;
(SOLS)
<
@hmrc.gov.uk>;
,
(Counter-Avoidance)
<
@hmrc.gov.uk>;
,
(Strategy) <
.
@hmrc.gov.uk>;
(CS&TD) <
@hmrc.gov.uk>; Madelin, Philippa (CCG Strategy)
<philippa.madelin@hmrc.gov.uk>;
(CCG Strategy) <
.
@hmrc.gov.uk>; Turner,
(CCG Strategy) <
@hmrc.gov.uk>;
(CS&TD Individuals Policy)
<
@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
-
HMT <
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- HMT <
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- HMT <
.
@hmtreasury.gov.uk>;
- HMT
<
.
@hmtreasury.gov.uk>; Kantor, Suzy - HMT
>;
Russell, Beth - HMT
>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>; FST, Action - HMT
>;
(CS&TD Budget & FB) <
@hmrc.gov.uk>; Secs, Perm (HMRC)
<perm.secs@hmrc.gov.uk>;
(CS&TD) <
@hmrc.gov.uk>; Stanier, Ruth (CS&TD
40(2)
40(2)
40(2)
40(2)
40(2)
40(2)
40(2)
40(2)
36(2)(c)
36(2)(c)
40(2)
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--- PDF page 6 ---
OFFICIAL
Director General) <ruth.stanier@hmrc.gov.uk>; Thompson, Jon (HMRC)
<jon.thompson5416@hmrc.gov.uk>; Chancellor's Action
>;
- HMT
@hmtreasury.gov.uk>; Whyte, Lindsey - HMT
>;
- HMT
@hmtreasury.gov.uk>;
- HMT
@hmtreasury.gov.uk>; Aiston, Mary (Counter-Avoidance)
<mary.aiston@hmrc.gov.uk>; Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
- HMT <
.
@hmtreasury.gov.uk>;
-
HMT <
.
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>; Kantor, Suzy - HMT
;
- HMT <
.
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>; Whyte, Lindsey - HMT
Russell, Beth - HMT
>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>; Chancellor's Action
>; Secs, Perm (HMRC) <perm.secs@hmrc.gov.uk>; Perm
Sec, Action - HMT
>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>; FST,
Action - HMT
>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT <
.
@hmtreasury.gov.uk>;
(CS&TD Individuals Policy, Income Tax) <
@hmrc.gov.uk>; Stanier, Ruth (CS&TD
Director General) <ruth.stanier@hmrc.gov.uk>; Ciniewicz, Penny (CCG Director General)
<penny.ciniewicz@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>; Hopkinson, Matthew (HMRC Comms Press Office)
<matthew.hopkinson@hmrc.gov.uk>;
(HMRC Comms Press Office)
<
@hmrc.gov.uk>;
(HMRC Comms Press Office)
<
@hmrc.gov.uk>;
(HMRC Parliamentary Scrutiny)
<
.
@hmrc.gov.uk>;
- HMT
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
- HMT
@hmtreasury.gov.uk>;
- HMT
@hmtreasury.gov.uk>;
- HMT
@hmtreasury.gov.uk>;
>;
- HMT
@hmtreasury.gov.uk>; Henricson-Bell, Olaf - HMT
; McGeehan, Jackie (CS&TD Individuals Policy, Income Tax)
<jackie.mcgeehan@hmrc.gov.uk>; Allen, Ian (HMRC Perm Secs Office) <ian.allen@hmrc.gov.uk>;
Pink, Lucy (CS&TD CIDD) <lucy.pink@hmrc.gov.uk>; Stuart-Lacey, Poli (HMRC Comms) <poli.stuart-
lacey@hmrc.gov.uk>;
(HMRC Perm Secs Office)
<
@hmrc.gov.uk>; Alexander, Janet (ISBC) <janet.alexander@hmrc.gov.uk>;
(HMRC Comms Press Office) <
.
@hmrc.gov.uk>; Holden, Jonathan
(HMRC Comms) <jonathan.holden@hmrc.gov.uk>;
(HMRC Comms CCG
Communications) <
@hmrc.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT
<
@hmtreasury.gov.uk>;
- HMT <
@hmtreasury.gov.uk>;
36(2)(c)
40(2)
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--- PDF page 7 ---
OFFICIAL
- HMT
@hmtreasury.gov.uk>;
- HMT
@hmtreasury.gov.uk>; Gill, Marc (DM) <marc.gill@hmrc.gov.uk>;
(SOLS)
@hmrc.gov.uk>; Harra, Jim (HMRC) <jim.harra@hmrc.gov.uk>; Riley, Paul
(CS&TD TAD) <paul.riley@hmrc.gov.uk>; McGeehan, Jackie (CS&TD Individuals Policy, Income Tax)
<jackie.mcgeehan@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>; Armitage, James (DM) <james.armitage@hmrc.gov.uk>; Goom, Sarah
(SOLS) <sarah.goom@hmrc.gov.uk>; Pink, Lucy (CS&TD CIDD) <lucy.pink@hmrc.gov.uk>; Bristow,
Carol (CS&TD Individuals Policy, Director) <carol.bristow@hmrc.gov.uk>; Conroy, Barbara (CS&TD
TAD) <barbara.conroy@hmrc.gov.uk>
Subject: RE: TAX AVOIDANCE SCHEMES: TACKLING PROMOTERS AND ENABLERS – FOR
INFORMATION [OFFICIAL-SENSITIVE]
Thanks for this advice, which the FST reviewed.
FST has a strong view that government as a whole must do more to tackle tax avoidance promoters.
FST noted HMRC’s concern that other regulators do not always see tax avoidance as a top priority,
and that more could be done to cooperate. FST is interested to know to what extent HMRC and the
Insolvency Service cooperate to ensure that the Insolvency Service do actually bar promoters from
acting as directors, where HMRC have taken against action against these promoters under
bankruptcy and insolvency provisions.
FST noted that the lack of effective powers to tackle historic DR scheme promoters (many of whose
clients are facing the loan charge) will continue to be a weakness, when faced with the criticism that
HMRC should be going after DR scheme promoters rather than those responsible for using the
schemes.
FST does want to see a more proactive communications approach. FST considers that a much greater
risk is that people do not reflect on the consequences of engaging in tax avoidance, rather than the
risk that raising the profile of tax avoidance could normalise it. FST considers that a communication
campaign which targets at-risk groups would be sensible. This could include social workers, nurses
and other groups that are targeted by DR scheme promoters.
FST considers that the advice on further areas to explore for taking radical action lacked ambition.
FST would like to see a list of specific, genuinely radical options that he can consider, from which
he can commission more detailed advice. FST would also like a list of actions that HMT and HMRC
would want from the rest of government and regulators as part of a concerted push against tax
avoidance promoters, eg. Insolvency Service, Companies House, ASA, FCA etc.
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--- PDF page 8 ---
OFFICIAL
Given the strong interest in doing more on promoters (including from No10), FST wants to make
genuine movement on this issue. Can you please provide further advice, including the requested list
of radical options (and cross-government actions), by 4pm Thursday? Let me know if it would be
useful to talk through this.
Kind regards,
Assistant Private Secretary to the Financial Secretary to the Treasury
T:
M:
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--- PDF page 9 ---
OFFICIAL
EMAIL 2 – NO ATTACHMENTS
From:
(Counter-Avoidance Planning & Performance)
Sent: 23 August 2019 08:52
To: Aiston, Mary (Counter-Avoidance) <mary.aiston@hmrc.gov.uk>; Jones, Nick (Counter-Avoidance)
<nick.jones@hmrc.gov.uk>; Barker, Chris (Counter-Avoidance) <chris.barker@hmrc.gov.uk>
Cc:
(Counter-Avoidance Planning & Performance) <
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance
SAU & MET) <
.
@hmrc.gov.uk>;
(Counter-Avoidance Planning &
Performance) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(Counter-
Avoidance Planning & Performance) <
@hmrc.gov.uk>;
(Counter-
Avoidance Planning & Performance) <
@hmrc.gov.uk>;
(Counter-
Avoidance Planning & Performance) <
@hmrc.gov.uk>
Subject: RE: IMMEDIATE ACTION PLEASE BY CoP THURSDAY 22 AUGUST data on cases settled but
not recorded on MI
Importance: High
Mary / Nick
Note - Interim Response
Chris is sighted on the various comments etc. and has a call scheduled for Wednesday with
and
to discuss further, an updated response will be sent following that. So apologies for the
piecemeal response to this urgent and politically sensitive issue.
In the meantime -
There is a slight delay between settling the Loan Charge cases and the recording of the cases (and in
turn the yield) on MIS (i.e. the iCA database).
As such, the issue discussed at SLT on Tuesday does relate to the time delay between settling and
scoring in the high volume settlements, and I understand that we don’t report SO1 yield in the weekly
ExCom report.
Some additional / interim information,
•
cases are not being stockpiled as such, however, there is a timing issue and delay between
setting and scoring;
•
currently there are approx. 450 LC cases with an estimated total yield in the region of £15m or so.
This estimate is based on an average settlement of £30,000 yield per case (it’s difficult to put an
exact figure on this without reviewing each case to establish the specific amount);
•
APs are considered at the stage 2 of the settlement process (updating SAFE, reversing the APN
charge, CAAPs checked and, if paid, the AP is allocated to the charge);
As always, let me know if you require anything further.
Business Planning & Benefits Lead I Planning & Performance Team I Planning, Performance,
Security & Information l Counter-Avoidance Directorate
3rd Floor | North Spur | Euston Tower | 286 Euston Road | London NW1 3UH
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--- PDF page 10 ---
OFFICIAL
Tel:
l Mobile:
Email
@hmrc.gsi.gov.uk
What we do – click here
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--- PDF page 11 ---
OFFICIAL
EMAIL 3 – NO ATTACHMENTS
From:
(HMRC Comms) <
.
@hmrc.gov.uk>
Sent: 27 August 2019 16:37
To:
(HMRC Comms Press Office) <
@hmrc.gov.uk>;
(HMRC Comms)
hmrc.gov.uk>; Ciniewicz, Penny (CCG Director
General) <penny.ciniewicz@hmrc.gov.uk>; Aiston, Mary (Counter-Avoidance)
<mary.aiston@hmrc.gov.uk>;
(CCG) <
@hmrc.gov.uk>; Jones, Nick (Counter-
Avoidance) <nick.jones@hmrc.gov.uk>;
(HMRC Comms CCG Communications)
<
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>; Hopkinson, Matthew (HMRC Comms Press Office)
<matthew.hopkinson@hmrc.gov.uk>;
(HMRC Comms Campaigns)
<
@hmrc.gov.uk>; Stuart-Lacey, Poli (HMRC Comms) <poli.stuart-lacey@hmrc.gov.uk>;
(Counter-Avoidance) <
.
@hmrc.gov.uk>; Stanier, Ruth (CS&TD Director General)
<ruth.stanier@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
Bristow, Carol (CS&TD Individuals Policy, Director) <carol.bristow@hmrc.gov.uk>; McGeehan, Jackie
(CS&TD Individuals Policy, Income Tax) <jackie.mcgeehan@hmrc.gov.uk>; Holden, Jonathan (HMRC
Comms) <jonathan.holden@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>; Harra, Jim (HMRC) <jim.harra@hmrc.gov.uk>;
(HMRC Comms Strategic Communications) <
.
@hmrc.gov.uk>;
(HMRC Comms External Affairs) <
@hmrc.gov.uk>;
(Counter-
Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(HMRC Comms External Affairs) <
.
@hmrc.gov.uk>; McGeehan, Jackie
(CS&TD Individuals Policy, Income Tax) <jackie.mcgeehan@hmrc.gov.uk>;
(HMRC
Comms) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>;
(HMRC Comms <
@hmrc.gov.uk>;
(HMRC Comms CCG Communications) <
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>;
(CS&TD)
<
.
@hmrc.gov.uk>;
(HMRC Comms Strategic Communications)
<
@hmrc.gov.uk>
Subject: Loan Charge Weekly Update: 27.08.19
Good Afternoon Colleagues,
Last week there were 1186 mentions on the loan charge from 164 authors. This is a 10% increase
in mentions and a 7% increase in authors compared to the previous week.
The top tweeter (protester) last week posted 374 messages – 41 of these were retweeted or
commented on.
Activity last week included:
20.08.19 The Financial Times on page 2 printed a piece entitled ‘Honour vow to suspend loan
charge, allies urge Johnson’ reported on the loan charge. The report quotes Ian Duncan Smith,
who has been pushing for the policy to be reviewed said: “He signed the letter that it was unjust and
unfair and against the rules of natural justice before he even stood in the campaign. I am calling on
him to deliver on what he said.” HMT led on handling for the story.
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--- PDF page 13 ---
OFFICIAL
Parliament is now in recess
MP drop in
Parliament is now in recess
Social Media
The week of the 19 August saw more MP’s take to social media to publish concerns over the loan
charge.
o
Plaid Cymru (41.4k+ followers, 40+ retweets, 55+ likes) announces "Plaid Cymru MPs have
written to the Chancellor to ask him to pause the #2019LoanCharge and conduct an
independent review of its effects."
o
Stephen Hammond MP (16.4k+ followers, 82+ retweets, 133+ likes) tweets "I have asked for
a meeting with the Prime Minister to discuss the #loancharge and how it is affecting many of
my constituents. @loanchargeAPPG @LCAG_2019".
o
Anne Milton MP (15.5k+ followers, 78+ retweets, 104+ likes) posts "I understand the PM
supported calls for an independent review into the Loan Charge during his campaign. Several
constituents have had personal experience of the LC and I have written to the Chancellor and
the PM to ask whether the Government will support this review."
o
Ross Thomson MP (13.7k+ followers, 220+ retweets, 317+ likes) relays "The Government
must act to suspend and independently review the #LoanCharge immediately. Time is
running out. Commitments have been made which must be honoured and delivered on",
pointing to previously seen Financial Times' coverage 'Boris Johnson allies urge him to
honour loan charge promises'. (Subscription required)
o
Nic Dakin MP (16.6k+ followers, 41+ retweets, 60+ likes) tweets "Pleased to write to PM and
Chancellor urging them to look again at the Loan Charge with fresh eyes. @LCAG_2019".
A sample of recent tweets loan charge tweets are below:
Loan Charge 2019
o
Daily Mirror (3.1m+ Facebook followers, 210+ reactions, 132+ comments, 29+ shares)
shares its piece 'Mum hit by £94k tax bill after husband took his own life over daughter's
death', detailing "Katie McLaughlin from Clackmannanshire in Scotland has been sent a large
bill from HMRC following her husband's death".
Daily Record (463.1k+ Facebook followers, 53+ reactions, 23+ comments, 5+ shares)
promotes its editorial 'Grieving widow fears bankruptcy as taxman chases £94k bill
following husband's suicide'.
Loan Charge APPG (2.4k+ followers, 158+ retweets, 207+ likes) tweets "This is a
shocking story of @HMRCgovuk cruelty pursuing the widow of a man who
committed suicide facing the #LoanCharge. There should be an investigation into
this & all HMRC conduct over the #LoanChargeScandal. Senior officers must be
properly held to account."
BBC's Andrew Verity (7.5k+ followers, 90+ retweets, 128+ likes) comments "If I were
in charge of HMRC’s helpline (and if it’s as sympathetic as HMRC has claimed) I’d
be addressing this heartbreaking situation urgently. A government that isn’t sensitive
to human situations needs to examine itself. Sooner rather than later."
--- PDF page 14 ---
OFFICIAL
Ross Thomson MP (13.7k+ followers, 231+ retweets, 301+ likes) continues promoting
'Petition to Suspend the Loan Charge', tweeting "Every day victims of the loan charge
fear the break-up of their family and a future devoid of opportunities as they face life
changing payments.Help me in calling on the Government to urgently suspend and
review the #LoanCharge".
Loan Charge Action Group [LCAG] (3.1k+ followers, 199+ retweets, 284+ likes) posts
"Another MP @CherylGillanhas written to @BorisJohnson and @sajidjavid calling for the
#LoanCharge to be suspended and reviewed. Thank you from everyone impacted.
#STOPtheLoanCharge".
| Communications Manager | CCG | HMRC Communications | Barkley House|
Castle Meadow Road | Nottingham | NG2 1AB |
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--- PDF page 15 ---
OFFICIAL
EMAIL 4 – NO ATTACHMENTS
From: Armitage, James (DM) <james.armitage@hmrc.gov.uk>
Sent: 27 August 2019 18:12
To:
(CDIO) <
@hmrc.gov.uk>;
(CDIO Customer Services
Group) <
.
@hmrc.gov.uk>
Cc: Gill, Marc (DM) <marc.gill@hmrc.gov.uk>;
(DM)
<
@hmrc.gov.uk>; Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
Barker, Chris (Counter-Avoidance) <chris.barker@hmrc.gov.uk>; Aiston, Mary (Counter-Avoidance)
<mary.aiston@hmrc.gov.uk>
Subject: Loan Charge IT Delivery [OFFICIAL-SENSITIVE]
Hi
We’ve got an area where we could really do with your help on delivery. In summary, Loan Charge is
creating large charges that require specific treatment, so we’ve been working on ways to “flag”
these cases and then use STRATA to segment them off for bespoke treatment. Loan Charge is
extremely high profile and very politically sensitive, so this is a key priority for HMRC.
Here’s a summary of where we are (thanks to
):
•
We worked with CDIO and CapGemini to create a ‘flag’ on Loan Charge (LC) RTI submissions
that would direct them to the DM DR team in Bradford if they became a debt. This was due
to go live months ago.
•
There is a similar design for SA returns expected in January 2020.
•
The RTI flag is not working. Non-Loan Charge cases are going to the specialist Bradford
team’s MU, while Loan Charge cases are going to BAU (i.e. we’re both getting false positives
and missing genuine positives).
•
We can’t identify the cause of the problem because there is no clear pattern in the type of
cases the Bradford team is seeing. So far it seems random.
•
CapGemini has been sent a diverse list of cases to investigate their journeys through the
systems from point of entry. The hope is that this will identify the cause(s) of the problem.
•
Due to the relatively low number of RTI returns we are able to deal with the fallout manually
with cooperation from C-A, RIS and OE. LC cases are pulled in to the Bradford team and non-
LC cases are sent to BAU.
•
The Loan Charge box is available on the 2019/20 RTI submissions and the team is receiving
erroneous cases every month. RIS has recently declined to carry on checking the cases
because of the resource implication.
•
While we need to fix RTI, we are even more worried about SA. If the SA solution is not in
place for January 2020, then the volumes will be too high for a manual solution (which is
literally looking at a list of customers and checking every case). In that situation, HMRC will
be using the incorrect pursuit approach to Loan Charge customers and we’ll have no way to
prevent it.
•
We therefore really need extensive testing of the SA solution in advance of January. If we
have the same problems as with RTI, then we’ll have no ability to muddle through like we
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--- PDF page 16 ---
OFFICIAL
are with RTI and we’ll be in real trouble (reputationally and operationally). We’re getting
broadly reassuring words, but not the detail or testing plan that we need – we’re hearing the
same things that we were before the RTI flag “came in”
Very happy to have a chat to explain further, but would really appreciate your support with this. Are
you happy to take forwards for us?
Thanks,
James
James Armitage
Deputy Director DM Logistics
7th Floor | 10 South Colonnade | Canary Wharf | London | E14 4PU
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--- PDF page 17 ---
OFFICIAL
EMAIL 5 – NO ATTACHMENTS
From:
(CS&TD Individuals Policy, Income Tax) <
@hmrc.gov.uk>
Sent: 28 August 2019 17:45
To: Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(Counter-Avoidance)
<
@hmrc.gov.uk>;
(CS&TD) <
.
@hmrc.gov.uk>; Simpson, Chris
(Counter-Avoidance) <christopher.simpson@hmrc.gov.uk>
Cc:
(Counter-Avoidance) <
.
@hmrc.gov.uk>;
(Counter-
Avoidance) <
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>
Subject: RE: Possible Spotlight - Deeds of Release and Proposed Letters re Loan Charge [OFFICIAL-
SENSITIVE]
Nick (all),
I promised early last week to give these suggestions a once over. I’ve set out where we have taken
steps to meet their asks alongside those we have not taken forward and why. This is just a quick
effort to make sure we are covering our backs and something to reference at a later date if we need
to, in particular if we end up bringing
for a meeting. My suggestion to reach out to
has
been overtaken by
recent letter, which your team are working on.
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--- PDF page 19 ---
OFFICIAL
4.
5. Where it is clear that the taxpayer
cannot make a sensible offer due to
income, age, incapacity etc, any loan
charge liability should be waived;
This is effectively publicising our hardship policy which has already been announced by FST
and will be included in an updated Issue Briefing:
Where a person has no realistic prospect of paying tax due under the loan charge, HMRC will
collect what they can afford to pay and will take no further action to enforce the debt,
leaving any unpaid debt to be collected later if the customer’s circumstances improve, in line
with HMRC’s usual debt recovery practice.
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36(2)(b)(i) and (ii)
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--- PDF page 20 ---
OFFICIAL
Thanks,
Income Tax Structure and Earnings | Individuals Policy Directorate | Room 3C/10, 3rd Floor, 100 Parliament
Street, London SW1A 2BQ |
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--- PDF page 21 ---
OFFICIAL
EMAIL 6 – 1 ATTACHMENT
From: Bristow, Carol (CS&TD Individuals Policy, Director) <carol.bristow@hmrc.gov.uk>
Sent: 28 August 2019 17:46
To: Aiston, Mary (Counter-Avoidance) <mary.aiston@hmrc.gov.uk>; Jones, Nick (Counter-Avoidance)
<nick.jones@hmrc.gov.uk>
Cc:
(CS&TD) <
.
@hmrc.gov.uk>;
(CS&TD Individuals Policy,
Director's Office) <
@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>
Subject: FW: Loan charge: Advice for CX and No10 on next steps [OFFICIAL-SENSITIVE]
Forwarded to
and
Mary, Nick,
It makes sense to start planning for this review.
Bearing in mind we expect APPG to send in the evidence they submitted around the time of the S95
report it would be helpful to dig out the work we did to look at the relevant cases and what we
would need to be able to share this (and any other material we would want to be taken into
account) with the reviewer. Can we quickly relook at how we can waive confidentiality. This is
something Jim has asked for in the context of the review and I think it would be immensely helpful
to try and balance the very one sided view of the loan charge from the APPG.
– I understand you are doing some preparatory work on setting up the review. Perhaps you can
add this to your list?
Thanks
Carol
Carol Bristow
Director | Individuals Policy Directorate (IPD) | HM Revenue and Customs | 3C/12, 100 Parliament
Street, London, SW1A 2BQ |
From:
- HMT [mailto
@hmtreasury.gov.uk]
Sent: 28 August 2019 10:59
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--- PDF page 23 ---
OFFICIAL
Thanks very much for your help, attached is the advice on a review of the Loan Charge.
We are sending this in parallel to the FST and Chancellor, but we’ve already included the FST’s views
from last night. I think you are talking to ensure that any further views are included in what goes to
the Chancellor.
Next steps:
-
We will draft a version of this note for No.10, factoring in any CX steers we get, and assume
that he is content for the FST to clear it;
-
We will want to start speaking with lead reviewers urgently, and expect that the FST will
want to play a role in speaking to any political figures who may lead it. We can engage with
his office on that;
-
We are also drafting a Terms of Reference for the review.
________________________________________________________________________
| SPB Projects | HM Treasury | Tel: x5417|
SPB operates HMT’s out of hours policy here. Unless agreed otherwise, we don’t expect you to check or respond to emails outside your
normal working hours and please don’t assume that we will check ours outside of our normal working hours either. If you need to contact
me urgently out of working hours please text my personal mobile 07789 190 316
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--- PDF page 25 ---
OFFICIAL
o
COB Fri 30 Aug - provide a draft response to
letter to FST about the
settlement terms.
o
COB Fri 30 Aug - Sir Mark Sedwill has a question about working with OGDs to
provide support for vulnerable customers following the background briefing we
provided last week.
o
TBC (depending on the steer from No. 10) - FST advice about the outstanding
actions, such as publishing guidance, from his announcement in July.
•
LCAG will have another public demonstration day outside Parliament on Wed 4 Aug (brought
forward from 11 Aug).
Thanks,
| 100 Parliament Street, London SW1A 2BQ |
From:
(CS&TD)
Sent: 22 August 2019 15:58
To: Harra, Jim (HMRC) <jim.harra@hmrc.gov.uk>; Secs, Perm (HMRC) <perm.secs@hmrc.gov.uk>;
Stanier, Ruth (CS&TD Director General) <ruth.stanier@hmrc.gov.uk>; Ciniewicz, Penny (CCG Director
General) <penny.ciniewicz@hmrc.gov.uk>; Evans, Alan (SOLS) <alan.evans1@hmrc.gov.uk>;
MacDonald, Angela (HMRC Director General, Customer Services)
<angela.macdonald@hmrc.gov.uk>; Russell, Beth - HMT
Cc: McGeehan, Jackie (CS&TD Individuals Policy, Income Tax) <jackie.mcgeehan@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax) <
.
@hmrc.gov.uk>;
(Counter-Avoidance)
@hmrc.gov.uk>; Bristow, Carol (CS&TD Individuals
Policy, Director) <carol.bristow@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>; Aiston, Mary (Counter-Avoidance) <mary.aiston@hmrc.gov.uk>;
Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>; Duncan, James (SOLS) <james.duncan@hmrc.gov.uk>;
(SOLS) <
@hmrc.gov.uk>; Gill, Marc (DM) <marc.gill@hmrc.gov.uk>; Armitage, James
(DM) <james.armitage@hmrc.gov.uk>;
(DM) <
@hmrc.gov.uk>;
(DM Debt Mgmt) <
@hmrc.gov.uk>;
(HMRC Comms CCG
Communications) <
@hmrc.gov.uk>;
(HMRC Comms
Press Office) <
.
@hmrc.gov.uk>; Holden, Jonathan (HMRC Comms)
<jonathan.holden@hmrc.gov.uk>; Hopkinson, Matthew (HMRC Comms Press Office)
<matthew.hopkinson@hmrc.gov.uk>; Barker, Chris (Counter-Avoidance)
<chris.barker@hmrc.gov.uk>;
- HMT <
.
@hmtreasury.gov.uk>; Kantor, Suzy -
HMT
>;
- HMT
<
@hmtreasury.gov.uk>; Whyte, Lindsey - HMT
>;
- HMT <
@hmtreasury.gov.uk>;
Kernan, Briony (SOLS C1 Personal Tax Advisory) <briony.kernan@hmrc.gov.uk>;
(SOLS)
<
@hmrc.gov.uk>
Subject: RE: Loan Charge Steering Group update [OFFICIAL-SENSITIVE]
All,
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--- PDF page 27 ---
OFFICIAL
Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>; Duncan, James (SOLS) <james.duncan@hmrc.gov.uk>; Vesikari, Alex
(SOLS) <
@hmrc.gov.uk>; Gill, Marc (DM) <marc.gill@hmrc.gov.uk>; Armitage, James
(DM) <james.armitage@hmrc.gov.uk>;
(DM) <
@hmrc.gov.uk>;
(DM Debt Mgmt) <
@hmrc.gov.uk>;
(HMRC Comms CCG
Communications) <
@hmrc.gov.uk>;
(HMRC Comms
Press Office) <
.
@hmrc.gov.uk>; Holden, Jonathan (HMRC Comms)
<jonathan.holden@hmrc.gov.uk>; Hopkinson, Matthew (HMRC Comms Press Office)
<matthew.hopkinson@hmrc.gov.uk>; Barker, Chris (Counter-Avoidance)
<chris.barker@hmrc.gov.uk>;
- HMT <
.
@hmtreasury.gov.uk>; Kantor, Suzy -
HMT
;
- HMT
<
@hmtreasury.gov.uk>; Whyte, Lindsey - HMT
>;
- HMT <
@hmtreasury.gov.uk>;
Kernan, Briony (SOLS C1 Personal Tax Advisory) <briony.kernan@hmrc.gov.uk>
Subject: RE: Loan Charge Steering Group update [OFFICIAL-SENSITIVE]
All,
Below is an update from the Loan Charge Steering Group.
•
We have now received ~20 letters from MPs asking for an independent inquiry. FST’s office
have agreed we should not respond to these until we have more certainty.
•
After meetings with CX and No. 10 last week, there is support for the loan charge policy and
no appetite for an inquiry but recognition the government may need to do something to
address MP’s concerns.
•
There are several products we need to produce this week:
o
Today;
No. 10 – background note on action against promoters (HMRC – CA leading)
No. 10 – strongest lines to take on the loan charge and against promoters
(HMRC – Comms leading)
o
Tomorrow;
CX – for decision advice based on material provided for the meeting last
week (HMT leading)
CX – worked examples comparing what happens if someone settles or pays
the loan charge (HMRC -
leading)
No. 10 – note covering the background, view on independent inquiry and next
steps (HMT leading)
FST – initial advice on radical options to tackle promoters (HMRC – CA
leading)
o
Thursday/Friday;
FST – for info advice on promoter fees and our view whether individuals only
marginally benefitted (HMRC –
leading)
FST – for info advice on additional information requirement and penalties
(HMRC – CA leading)
•
We expect Radio 4 Today programme to run a segment on the loan charge this week,
originally scheduled for last week,.
If you have any questions, please don’t hesitate to ask.
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--- PDF page 28 ---
OFFICIAL
Thanks,
| 100 Parliament Street, London SW1A 2BQ |
From:
(CS&TD)
Sent: 01 August 2019 11:12
To: Harra, Jim (HMRC) <jim.harra@hmrc.gov.uk>; Secs, Perm (HMRC) <perm.secs@hmrc.gov.uk>;
Stanier, Ruth (CS&TD Director General) <ruth.stanier@hmrc.gov.uk>; Ciniewicz, Penny (CCG Director
General) <penny.ciniewicz@hmrc.gov.uk>; Evans, Alan (SOLS) <alan.evans1@hmrc.gov.uk>;
MacDonald, Angela (HMRC Director General, Customer Services)
<angela.macdonald@hmrc.gov.uk>; Russell, Beth - HMT
>
Cc: McGeehan, Jackie (CS&TD Individuals Policy, Income Tax) <jackie.mcgeehan@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax) <
.
@hmrc.gov.uk>;
(Counter-Avoidance) <
@hmrc.gov.uk>; Bristow, Carol (CS&TD Individuals
Policy, Director) <carol.bristow@hmrc.gov.uk>;
(CS&TD Individuals Policy, Income Tax)
<
@hmrc.gov.uk>; Aiston, Mary (Counter-Avoidance) <mary.aiston@hmrc.gov.uk>;
Jones, Nick (Counter-Avoidance) <nick.jones@hmrc.gov.uk>;
(Counter-Avoidance)
<
.
@hmrc.gov.uk>; Duncan, James (SOLS) <james.duncan@hmrc.gov.uk>;
(SOLS) <
@hmrc.gov.uk>; Gill, Marc (DM) <marc.gill@hmrc.gov.uk>; Armitage, James
(DM) <james.armitage@hmrc.gov.uk>;
(DM) <
@hmrc.gov.uk>;
(DM Debt Mgmt) <
@hmrc.gov.uk>;
(HMRC Comms CCG
Communications) <
@hmrc.gov.uk>;
(HMRC Comms
Press Office) <
.
@hmrc.gov.uk>; Holden, Jonathan (HMRC Comms)
<jonathan.holden@hmrc.gov.uk>; Hopkinson, Matthew (HMRC Comms Press Office)
<matthew.hopkinson@hmrc.gov.uk>; Barker, Chris (Counter-Avoidance)
<chris.barker@hmrc.gov.uk>;
- HMT <
.
@hmtreasury.gov.uk>; Kantor, Suzy -
HMT
;
- HMT
<
@hmtreasury.gov.uk>; Whyte, Lindsey - HMT
>;
- HMT
@hmtreasury.gov.uk>;
Kernan, Briony (SOLS C1 Personal Tax Advisory) <briony.kernan@hmrc.gov.uk>
Subject: RE: Loan Charge Steering Group update [OFFICIAL-SENSITIVE]
All,
The plans for briefing ministers have changed:
•
We need to include advice on high level options around an independent inquiry, as well as
background, in the CX advice due tomorrow morning.
•
The SpAds meeting has been moved to next Tuesday.
•
We expect there will be a meeting with No. 10 early next week.
Thanks,
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--- PDF page 29 ---
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| 100 Parliament Street, London SW1A 2BQ |
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--- PDF page 31 ---
OFFICIAL
• We have previously provided settlement data up to 31 March 2019, which showed the percentage
from settlements paid by employers was 85%. The data up to the end of June shows this has slightly
increased but this is likely to change further once all settlements have concluded.
• The remaining balance of the yield is from individuals, who settle where the tax cannot reasonably
be collected from the employer. For example, the employer is based offshore or no longer exists.
• In the majority of contractor schemes, the employer was an artificial construct setup solely to
facilitate the scheme. Therefore, the individual must pay in the vast majority of schemes used by
contractors.
• Promoters of disguised remuneration schemes are not liable for the tax due under the loan charge.
Sometimes the artificial employer was controlled by the promoter. However, the employer was almost
always offshore. Therefore, we do not expect any loan charge yield to come from promoters.
• We are in the process of updating the scorecard forecast for the package of measures, including the
loan charge, introduced at Budget 2016. This will be published at Budget 2019 after it has been
approved by the Office for Budget Responsibility (OBR).
• At Budget 2016, we estimated 75% of the total yield from the package of changes would come from
employers and the remaining balance from individuals.
• We will provide you with an update on the scorecard forecast later in September.
Thanks,
| 100 Parliament Street, London SW1A 2BQ |
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--- PDF page 32 ---
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OFFICIAL
, Personal Tax,
27/8/19
LOAN CHARGE REVIEW
INTRODUCTION
1. The Prime Minister has committed to a ‘proper independent review’ of the
disguised remuneration Loan Charge.
2. This submission sets out a range of options for a review and seeks a steer on the
main design choices: the scope, independence, and timing.
3. We understand that the priorities in designing the review are:
a. to launch it as quickly as possible and conclude it in time for the Budget;
b. that it should be led by someone independent;
c. and that you wish to limit the fiscal risk.
4. Your options range from a longer, judicial style review to a shorter one, still run by
an independent figure.
5. The central choice will be between satisfying campaigners opposed to the Loan
Charge, and keeping the policy, including its revenue, intact.
6. Those pressing for a review will very strongly criticise anything that does not look
like it will repeal the Loan Charge, putting significant revenue at risk as a result
and harm wider efforts to tackle avoidance. We originally scored £3.2bn between
2016/17 and 2020/21 for the Loan Charge and a package of other measures at
Budget 2016. The latest analysis from HMRC suggests that the cost of repealing
the Loan Charge could now be higher, based on the updated fiscal forecasts
including a greater settlement yield than expected to date.
7. We would strongly recommend a review which aims to protect the policy as much
as possible for fiscal and fairness reasons, does not seem like we’re letting tax
avoiders off, and ideally satisfies as many MPs as possible that this has been a fair
process.
8. We are never going to satisfy the campaigners without a full reversal, but we
might show some MPs we have taken concerns seriously, and give them enough
of a reason to change their views.
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--- PDF page 33 ---
2
OFFICIAL
9. We will also need to find someone to lead the review within days and any
individual will face hostile personal criticism if they do not recommend reversing
the charge.
10. We propose adapting this into a note to send to No 10 reflecting your steers.
OVERALL SCOPE
11.You asked for advice on how to mitigate the risks around the review.
12.The most fundamental question is whether to review the Loan Charge policy itself.
13.At official level, our view is that we recommend ruling out a repeal from the start
for fiscal, practical, and wider reputational reasons.
a. As covered in detail later, any review that looks at the merits of the entire
policy (as opposed to some elements of it) will take longer, potentially
require primary legislation as a result, and strengthen the APPG’s case for a
pause in settlements and collections.
b. Reversing or pausing the Charge would create parliamentary difficulties,
and definitely require primary legislation. There are also presentational
issues if we were to stop a policy aimed at tax avoiders, and questions over
whether you’d want to pay back the 8,000 people who have settled at a
cost of around £2bn or continue to pursue cases where we know there was
tax avoidance.
c. We originally scored £3.2bn for the Loan Charge and a package of other
measures at Budget 2016. The latest analysis from HMRC suggests the cost
of repealing the Loan Charge could now be significantly higher, based on
the latest fiscal forecasts.
d. Reviewing the Loan Charge will also send a wider message that the
government has acted unfairly in challenging tax avoidance. This will
encourage people to challenge HMRC’s wider compliance strategy. Future
settlement opportunities may be less successful, and it will demonstrate
that non-compliance and campaigning can be successful, including to
campaigners against off-payroll reform, with almost £3bn of scorecard
impact. It could also undermine the narrative of any wider tax avoidance
package that we want to land at the Budget.
--- PDF page 34 ---
3
OFFICIAL
SCOPE AND MP REACTION
14. However, we understand that this does not fully honour the spirit of the Prime
Minister’s commitment, and a sizeable number of MPs’ expectations, and we have
discussed this issue with the FST.
15. He supports a short, independent review “of the policy”, so that the option of
repealing it is implicitly in scope. His view is that anything short of that will lay us
open to the charge of not having done the review fairly, and it would not to draw
a line under the issue with MPs as a result.
16. If you think that a repeal of the Loan Charge needs to be in scope, we would
recommend that the Terms of Reference require the reviewer to consider the
fiscal risks and wider implications, and that you hold a short review to restrict how
far it can go due to the time constraints. You will also want to appoint a reviewer
who will take full account of the wider fiscal and operational implications.
17. When weighing up whether to include a repeal in the scope, you will want to
consider the reactions of different stakeholders.
18. Whether or not the review includes a repeal in scope, the vocal campaign groups
(led by the Loan Charge Action Group) will not be satisfied with anything other
than a review that will lead to a full reversal. They will criticise any constraints on
the scope, but we think they can be justified by the scale of the fiscal risk and the
need for wider taxpayer fairness.
19. Conversely, the public recognise that these schemes have been contrived tax
avoidance when they have responded to press articles and are unlikely to
ultimately support a review that could return money to tax avoiders.
20. Amongst MPs, the reception will be more mixed. More than 70 MPs from across
parliament have already written in support of a full independent review. Other
interested MPs may be more receptive if we just address their specific concerns,
but this may not be enough to give MPs a sufficient level of cover to defend the
Loan Charge to constituents in future. The FST’s view following his listening
exercise is that the Loan Charge policy itself needs to be in scope.
21. At official level, we recommend not including the Loan Charge policy itself in the
scope of the review, but recognise this may not go far enough for MPs. Do you
want the repeal of the Loan Charge to be in scope?
--- PDF page 35 ---
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OFFICIAL
SPECIFIC SCOPE BEYOND CONSIDERING REPEALING
22.You have a set of options for what the review could look at more widely. Some
complement looking at repealing the Loan Charge, whilst all could be alternatives.
23.They include whether to re-open the design of the policy, focus on improving its
implementation, or look at HMRC’s powers to tackle promoters or tax avoidance
more widely.
24.Taking each in turn:
a. Addressing MPs’ concerns about policy design: you could ask the review to
look at whether MPs’ have valid concerns about retrospection, whether
people were duped into using the schemes, or whether they didn’t benefit
from them. This option probably has the best chance of changing MPs’
minds, but also risks giving their criticisms additional weight ahead of the
Budget, especially if the review doesn’t also conclude on the benefits of the
Loan Charge. To hold a quick review, we will also need to ask the review to
leave it to the government to decide what to do if the concerns are found
to be true. We have already started working up potential policy changes,
but they are likely to have downsides. They come at a cost of £100ms,
require secondary legislation, and are not neat solutions that can be easily
explained.
b. Implementation: you could say that the fundamentals of the policy are
right, but it’s always sensible to look at implementation and what can be
learnt. This could mean reviewing whether HMRC can do more
operationally to respond to people quickly; and whether they offer the right
schemes to ensure that it’s affordable. Albeit, they have publicly committed
to ensuring that it is. By itself, this option will not do enough to address all
the concerns raised by MPs.
c. Wider tax avoidance: you could say that, beyond the Loan Charge, more
needs to be done to tackle tax avoidance. The review could therefore look
at lessons from disguised remuneration and other schemes to consider
whether HMRC has the right powers and operational strategies to prevent
tax avoidance schemes from gaining popularity. There could be a particular
focus on promoters. Again, by itself this option is likely to be criticised as
avoiding the issues with the Loan Charge (i.e. those around retrospection,
affordability, and people being duped into using the schemes).
25. Do you want us to draft a Terms of Reference in line with Option A?
--- PDF page 36 ---
5
OFFICIAL
INDEPENDENCE & LEADERSHIP
26. Campaigners have been pushing for a review lead by a Judge. However, we would
recommend seeking to identify someone who can bring a broader perspective of
the wider impacts into their conclusions (including for example fiscal costs, the
impacts for HMRC’s future avoidance and evasion work, and the presentational
implications with other taxpayers). This likely rules out some of the tax judges or
lawyers we may have considered.
27. Options we are considering include senior political figures, like former junior
Treasury ministers, or a tax professional. They will need to be credible to
campaigners and therefore seen as independent from government.
28. In order to deliver a short review over a matter of weeks we would need to ask
the reviewer to work on it full time which may constrain choices. It is also worth
being aware that campaigners have a track record of putting considerable
pressure through social media on any individual who enters this policy space,
including in some cases trawling through their personal circumstances,
threatening their safety, and messaging their family members. External tax
experts have told the FST that they have been deterred from supporting the policy
by abuse from LCAG.
29. Given this, finding a suitable candidate may be challenging, so we are actively
considering whether there could be international candidates, such as someone
from the Irish tax system. However, there is a risk we will not be able to find a
suitable candidate at short notice.
30. Are you happy for us to start approaching some individuals informally?
LENGTH & TIMING
31.Whilst campaigners and MPs are calling for a lengthy judge-led independent
review, there are strong reasons to conclude a review quickly. Not least that a
shorter review will reduce disruption for those in the settlement process.
32.We think it will be just about possible to hold a more focused review before the
Budget. But one with a wider scope – including whether to repeal the Loan Charge
policy – will be very difficult, especially if you want it to have credibility. To make
it possible, the review will need to look at the issues briefly and at a high level,
roughly line with Option A in paragraph 22 above. Allowing the review to
recommend policy responses would also be very challenging, and probably best
left to the government.
--- PDF page 37 ---
6
OFFICIAL
33. It is likely that the LCAG will put forward the large amount of evidence that they
submitted to the All Party Parliamentary Group and will likely press to have
individual cases considered as part of that, and challenge any conclusions which
don’t seem to have had time to take them fully into account.
34.There is some space to consider a slightly longer timeframe than the Budget if
necessary. The key date is the January 2020 deadline, assuming the review
concludes that the Loan Charge should remain. But the government will need to
communicate its position well before then and you would need to accept criticism
for giving individuals very little time between the end of the review and having to
pay the Loan Charge. Pushing the deadline much beyond January will require a
change in primary legislation.
CONCLUSION
35. A longer, judicial style review does not meet your aims and we have therefore
ruled it out.
36. If you wish to hold a shorter review then we would recommend constraining the
scope via the Terms of Reference, ideally to rule out reversing the Loan Charge,
accepting that this may trigger criticism. In line with Option A above, it can look at
MPs’ key concerns, and we could have concessions ready to announce in
response.
37. However, if you think that the option of repealing the Loan Charge must also be
included to convince MPs, then the Terms of Reference should make sure that the
fiscal, operational and reputational risks of repealing are considered. We would
also recommend only agreeing to the review if someone can be found who will
fully take those concerns on board – which may be a very difficult ask.
NEXT STEPS
38. Under either option, we will start to talk to people about running it immediately
and give Number 10 a version of this advice.
39. We will also start to draft a Terms of Reference based on your steers.
40. Practically, we will urgently start to work on options for resourcing a secretariat,
ensuring that the review can have access to the appropriate data from HMRC, and
work with the Cabinet Office on the appointment process and terms for the
reviewer.
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Information Rights Unit
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
F Thompson
Dear F Thompson
020 7270 5000
foirequests@hmtreasury.gov.uk
www.gov.uk/hm-treasury
28 February 2022
Ref: FOI2022/01891
Freedom of Information Act 2000
Thank you for your enquiry of 31 January 2022, which we have considered under the
terms of the Freedom of Information Act 2000 (the FOI Act).
You asked for the following information:
“Thank you for your reply of 2nd December 2021.
My original request, submitted on 4th November 2021, asked HM Treasury to
disclose information on three closely connected points. These were all directly linked
to your previous refusal to provide evidence of the decision-making process which
led to the selection and appointment of Sir (now Lord) Amyas Morse, and which you
withheld based on your claim that disclosure of this information is apparently not in
the public interest.
The first of these points was clear in requesting the name of the qualified person
who provided the opinion which HM Treasury claim justifies the use of section 36 of
the Freedom of Information Act in this instance. Instead of supplying the name of
that person, you just include a statement that the Exchequer Secretary to the
Treasury is the 'qualified person' in relation to HM Treasury, but which does not
answer the question as posed.
Helen Whately was appointed Exchequer Secretary to the Treasury on 16 September
2021 and is (currently) still in that role. Her predecessor was Kemi Badenoch, who
held the post from 13th February 2020 to 15th September 2021. Can you please
therefore confirm - with a straight 'yes' or 'no' response for complete clarity on this
matter - that it was Kemi Badenoch herself who provided the opinion that disclosure
of the requested information was not in the public interest?
For the purposes of this reply, I will draw the assumption that the answer is 'yes' -
otherwise, one might reasonably conclude that your prior statement indicating that
the Exchequer Secretary to the Treasury is the 'qualified person' in relation to HM
Treasury was an attempt to somehow obfuscate the facts or supply a misleading
answer, which I trust will not turn out to be the case.
The second point asked for the full and unabridged text of that qualified person's
opinion, and all recorded information, of any type or in any format, which contains
submissions (or exchanges of opinion) provided to the qualified person for
considering that request. You have confirmed that HM Treasury does hold
information within the scope of my request.
--- PDF page 2 ---
The third point asked for all metadata held in any recorded form by the department
which relates to my original request (reference FOI2021/09786), the subsequent
request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and
the recently allocated internal review (reference IR2021/25860). Again, you have
confirmed that HM Treasury does hold information within the scope of my request.
However, you claim that this request is 'very wide in scope' and that your search has
identified a large number of documents to consider, declaring that you would need
to review each document separately with a view to determining whether any
information was exempt from release due to sensitivities or personal data, and to
then redact any exempt material. You contend that my request engages section
14(1) of the Freedom of Information Act due to the disproportionate effort that
would be required to comply, but state that you may be able to comply with a
future request if the focus was narrowed.
This claim - that you have identified a large number of documents in relation to this
request - reveals the serious significance and importance of the matter at hand and
self-evidently exposes the lengths to which HM Treasury is prepared to go in order
to prevent disclosure of this information, lest it demonstrably reveals the internal
unease and apprehension about its own culpability being unwillingly divulged, as
well as the liberal disregard for public transparency and truth which still seems to
ferment within the department. The authority will be fully conversant with the
report published by the Loan Charge All-Party Parliamentary Group (now the Loan
Charge and Taxpayer Fairness All-Party Parliamentary Group) in June 2020, which
laid bare the distinct lack of independence and the unacceptable level of
interference with the review by those government departments with a hugely vested
interest in the outcome. The contents of this report, supported and endorsed by
hundreds of MPs as members of this group, were ignored by government. From the
very day on which the appointment of Sir (now Lord) Morse was announced as head
of this review, there has been a consistent series of allegations broadcast and
published in the media that Morse was not an independent reviewer and that the
review itself, and the subsequent report, were both subject to interference by HM
Treasury and HMRC.
Any reasonable observer would conclude that the public interest is best served by
the full disclosure of the information requested, in order to establish the facts
around that controversial appointment. I - and tens of thousands of other UK
citizens - can see no basis on which HM Treasury could possibly disagree. It would
seem entirely sensible - and indeed reasonable to anyone who fully understands the
definition of independence - that HM Treasury should WANT to provide evidence
which helps to stem the ever-expanding flow of these allegations and which
confirms their position that this was a wholly impartial and independent review -
whereas continuing to withhold and refusing to disclose the evidence simply
confirms the opposite. It could not be any clearer, unless one remains blind to the
truth and committed to a cover-up.
Additionally, there are numerous elements within your response which require
challenge, clarity and a more detailed focus, which I will now seek to patiently
address.
On the premise that it was indeed Kemi Badenoch who provided the opinion - which
by now you will have confirmed either way - then the recorded information you hold
will include the full and unabridged text of her singular communication to that
effect. You could - had you helpfully chosen to do so - have simply provided that in
isolation and informed me that the remainder of this request (the submissions and/or
exchanges of opinion provided to the qualified person for consideration of that
request, plus the metadata held in any recorded form by the department which
--- PDF page 3 ---
relates to the entirety of my original request) was, in your opinion, subject to the
engagement of other exemptions as stated. Is there a particular reason for the
selective withholding of this eminent 'opinion' other than the fact it might be
considered as being of a much more significant benefit to HM Treasury than those
tens of thousands of UK citizens diligently attempting to establish the cold, hard
truth about the careful and strategic selection of Sir (now Lord) Morse as opposed to
an informed, knowledgeable, experienced - and properly independent - tax judge?
The first reference which HM Treasury made to the claimed engagement of section
36 was in the interim reply (to FOI2021/15854) dated 6th July 2021. This response
made the claim that section 36(2)(b)(ii) of the FOI Act applied as HM Treasury believe
disclosure would, or would be considered as likely, to inhibit the free and frank
exchanges of views of the purposes of deliberation. On that basis, you extended the
time for consideration of the public interest test using section 10(3). On 1st
September 2021, HM Treasury communicated that they considered that the
information requested also engaged additional sections 36(2)(b)(i) and 36(2)(c) -
having taken 61 full working days to come to that conclusion, well beyond the
guidelines laid out by the Information Commissioner's Office. It is notable - and once
again self-evident - that the cause of this excessive delay was HM Treasury's own
internal discussions and their concerted efforts to ensure that this information was
withheld at any cost and with no regard to, or respect for, the statutory timescales
laid out under the Freedom of Information Act.
You state that your search has identified a 'large number' of documents to consider,
but fail to give any indication, or a sensible and realistic estimate, as to the actual
volume concerned. Whilst it is understood that an authority cannot claim section 12
for the cost and effort associated with considering exemptions or redacting exempt
information, it may apply section 14(1) where it can make a case that the amount of
time required to review and prepare the information for disclosure would impose a
grossly oppressive burden on the organisation - which is what you are claiming in
this case.
The Information Commissioner's Office consider there to be a high threshold for
refusing a request on such grounds, meaning that an authority is most likely to have
a viable case where:
a) the requester has asked for a substantial volume of information AND
b) the authority has real concerns about potentially exempt information, which it will
be able to substantiate if asked to do so by the ICO AND
c) any potentially exempt information cannot easily be isolated because it is
scattered throughout the requested material.
In the event that a refusal should lead the requester to complain to the ICO, they
would expect the authority to provide them with clear evidence to substantiate its
claim that the request is grossly oppressive, with any requests which are referred to
the Commissioner being considered on the individual circumstances of each case. It
is reiterated by the ICO that "public authorities must keep in mind that meeting their
underlying commitment to transparency and openness may involve absorbing a
certain level of disruption and annoyance."
There are many other factors which would need to be duly considered should such a
complaint be escalated to the ICO (assessing purpose and value, considering
whether the purpose and value justifies the impact on the public authority, taking
into account context and history, etc.) but if possible and in the spirit of
compromise, I would like to help the authority avoid such an outcome.
Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
--- PDF page 4 ---
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021. On the
continued assumption that it was Kemi Badenoch who provided the opinion, then all
communications covering this request should be held within a single mailbox - unless
you are likely to inform me that there are other forms of recorded information on
other types of media which contain this data? Please kindly confirm - thank you.
With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021, which I respectfully calculate will indeed reduce the
burden on the authority, and enable you to publicly demonstrate your stated
commitment to transparency and openness - thank you.”
In response to your first question relating to HM Treasury’s qualified person in relation to
section 36 requests. We maintain that in no way was our response an attempt to be
‘misleading’. The Exchequer Secretary to the Treasury is our qualified person. However, to
be helpful we can confirm that in this case the qualified person was Kemi Badenoch MP.
Turning to your new request for information, we appreciated that you have attempted to
narrow the scope of your previous request. It might be helpful if we summarise your new
request for information:
“Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021.”
and
“With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021”
Your narrowed request remains very wide in scope. In order to comply with your request
we would need to review each document separately with a view to determining whether
any information was exempt from release, for example, due to sensitivities or personal
data, and to then redact any exempt material. The effort required to review, assess and
extract that information would be considerable and would require a disproportionate level
of staff effort.
We are aware that since 2020 you have made 10 FOI requests to HM Treasury in relation
to the 2019 Loan Charge. We would now like to draw your attention to provisions in the
FOI Act that are designed to protect the resources of public authorities in relation to the
burden of handling requests.
Section 14 is designed to protect public authorities by allowing them to refuse any
requests which have the potential to cause a disproportionate or unjustified level of
disruption, irritation or distress. The Information Commissioner recognises that dealing
with such requests can place a strain on resources and get in the way of delivering
mainstream services or answering legitimate requests.
--- PDF page 5 ---
Although section 14(1) is not subject to a traditional public interest test it was confirmed
by the Upper Tribunal in the Dransfield case (the Information Commissioner vs Devon
County Council & Dransfield [2012] UKUT440 (ACC), (28 January 2013) that it may be
appropriate to ask the question: “Does the request have a value or serious purpose in
terms of the objective public interest in the information sought?”
We have reviewed the impact of your recent FOI requests and consider that dealing with
these requests has resulted in an unjustified level of disruption. Considering all the factors
associated with your requests we do not find a serious purpose to outweigh this
detrimental impact.
Finally, the ICO provides that if a public authority has reason to believe that several
different requesters are acting in concert as part of a campaign that disrupts the
organisation by virtue of the sheer weight of the FOI requests being submitted then it may
take this into account when determining whether any of those requests are vexatious.
Your request is one of a number of similarly worded requests submitted via the
WhatDoTheyKnow website. We consider that the aggregated impact of dealing with these
requests has caused a disproportionate and unjustified level of disruption, irritation or
distress.
For the above reasons we are refusing your request under section 14(1) of the FOI Act,
We would ask you to also bear this in mind when considering making further FOI requests
as you should be aware that we may refuse a request if we consider it engages section
14(1).
We would encourage you to refer to the Information Commissioner’s guidance to
requesters which can be found online at:
https://ico.org.uk/for-the-public/official-information/
If you have any queries about this letter, please contact us. Please quote the reference
number above in any future communications.
Yours sincerely
Information Rights Unit
--- PDF page 6 ---
Copyright notice
Most documents HM Treasury supplies in response to a Freedom of Information request,
including this letter, continue to be protected by Crown copyright. This is because they will
have been produced by Government officials as part of their work. You are free to use
these documents for your information, for any non-commercial research you may be doing
and for news reporting. Any other re-use, for example commercial publication, will require
the permission of the copyright holder. Crown copyright is managed by The National
Archives and you can find details on the arrangements for re-using Crown copyright
material at: http://www.nationalarchives.gov.uk/information-management/re-using-public-
sector-information/uk-government-licensing-framework/crown-copyright/
Your right to complain under the Freedom of Information Act 2000
If you are not happy with this reply, you can request a review by writing to HM Treasury,
Information Rights Unit, 1 Horse Guards Road, London SW1A 2HQ or by emailing us at the
address below. Any review request must be made within 40 working days of the date of
this letter.
Email: foirequests@hmtreasury.gov.uk
It would assist our review if you set out which aspects of the reply concern you and why
you are dissatisfied.
If you are not content with the outcome of the review, you may apply directly to the
Information Commissioner for a decision. Generally, the Commissioner will not make a
decision unless you have exhausted the complaints procedure provided by HM Treasury
which is outlined above.
The Information Commissioner can be contacted at: The Information Commissioner’s
Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF (or via their website at:
https://ico.org.uk).
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ATTACHMENT: IR2022_07690_IR_Response_Issued_2022_05_05.pdf
TEXT_FILE: IR2022_07690_IR_Response_Issued_2022_05_05.pdf.txt
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--- PDF page 1 ---
1
Information Rights Unit
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
F Thompson
Dear F Thompson,
020 7270 5000
foirequests@hmtreasury.gov.uk
www.gov.uk/hm-treasury
5 May 2022
Refs: IR2022/07690
FOI2022/01891
Freedom of Information Act 2000 Internal Review
Thank you for your email dated 4 April 2022, requesting an internal review of our response
dated 28 February 2022 to your information request made under the Freedom of
Information Act 2000 (the FOI Act), under our reference: FOI2022/01891.
The department has now completed its internal review process and has carried out a
thorough review of the case overseen by a senior official who was not involved with the
original request.
Background
On 31 January 2022, you made the following request under the FOI Act:
“Thank you for your reply of 2nd December 2021.
My original request, submitted on 4th November 2021, asked HM Treasury to
disclose information on three closely connected points. These were all directly linked
to your previous refusal to provide evidence of the decision-making process which
led to the selection and appointment of Sir (now Lord) Amyas Morse, and which you
withheld based on your claim that disclosure of this information is apparently not in
the public interest.
The first of these points was clear in requesting the name of the qualified person
who provided the opinion which HM Treasury claim justifies the use of section 36 of
the Freedom of Information Act in this instance. Instead of supplying the name of
that person, you just include a statement that the Exchequer Secretary to the
Treasury is the 'qualified person' in relation to HM Treasury, but which does not
answer the question as posed.
Helen Whately was appointed Exchequer Secretary to the Treasury on 16 September
2021 and is (currently) still in that role. Her predecessor was Kemi Badenoch, who
held the post from 13th February 2020 to 15th September 2021. Can you please
therefore confirm - with a straight 'yes' or 'no' response for complete clarity on this
--- PDF page 2 ---
2
matter - that it was Kemi Badenoch herself who provided the opinion that disclosure
of the requested information was not in the public interest?
For the purposes of this reply, I will draw the assumption that the answer is 'yes' -
otherwise, one might reasonably conclude that your prior statement indicating that
the Exchequer Secretary to the Treasury is the 'qualified person' in relation to HM
Treasury was an attempt to somehow obfuscate the facts or supply a misleading
answer, which I trust will not turn out to be the case.
The second point asked for the full and unabridged text of that qualified person's
opinion, and all recorded information, of any type or in any format, which contains
submissions (or exchanges of opinion) provided to the qualified person for
considering that request. You have confirmed that HM Treasury does hold
information within the scope of my request.
The third point asked for all metadata held in any recorded form by the department
which relates to my original request (reference FOI2021/09786), the subsequent
request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and
the recently allocated internal review (reference IR2021/25860). Again, you have
confirmed that HM Treasury does hold information within the scope of my request.
However, you claim that this request is 'very wide in scope' and that your search has
identified a large number of documents to consider, declaring that you would need
to review each document separately with a view to determining whether any
information was exempt from release due to sensitivities or personal data, and to
then redact any exempt material. You contend that my request engages section
14(1) of the Freedom of Information Act due to the disproportionate effort that
would be required to comply, but state that you may be able to comply with a
future request if the focus was narrowed.
This claim - that you have identified a large number of documents in relation to this
request - reveals the serious significance and importance of the matter at hand and
self-evidently exposes the lengths to which HM Treasury is prepared to go in order
to prevent disclosure of this information, lest it demonstrably reveals the internal
unease and apprehension about its own culpability being unwillingly divulged, as
well as the liberal disregard for public transparency and truth which still seems to
ferment within the department. The authority will be fully conversant with the
report published by the Loan Charge All-Party Parliamentary Group (now the Loan
Charge and Taxpayer Fairness All-Party Parliamentary Group) in June 2020, which
laid bare the distinct lack of independence and the unacceptable level of
interference with the review by those government departments with a hugely vested
interest in the outcome. The contents of this report, supported and endorsed by
hundreds of MPs as members of this group, were ignored by government. From the
very day on which the appointment of Sir (now Lord) Morse was announced as head
of this review, there has been a consistent series of allegations broadcast and
published in the media that Morse was not an independent reviewer and that the
review itself, and the subsequent report, were both subject to interference by HM
Treasury and HMRC.
Any reasonable observer would conclude that the public interest is best served by
the full disclosure of the information requested, in order to establish the facts
around that controversial appointment. I - and tens of thousands of other UK
--- PDF page 3 ---
3
citizens - can see no basis on which HM Treasury could possibly disagree. It would
seem entirely sensible - and indeed reasonable to anyone who fully understands the
definition of independence - that HM Treasury should WANT to provide evidence
which helps to stem the ever-expanding flow of these allegations and which
confirms their position that this was a wholly impartial and independent review -
whereas continuing to withhold and refusing to disclose the evidence simply
confirms the opposite. It could not be any clearer, unless one remains blind to the
truth and committed to a cover-up.
Additionally, there are numerous elements within your response which require
challenge, clarity and a more detailed focus, which I will now seek to patiently
address.
On the premise that it was indeed Kemi Badenoch who provided the opinion - which
by now you will have confirmed either way - then the recorded information you hold
will include the full and unabridged text of her singular communication to that
effect. You could - had you helpfully chosen to do so - have simply provided that in
isolation and informed me that the remainder of this request (the submissions and/or
exchanges of opinion provided to the qualified person for consideration of that
request, plus the metadata held in any recorded form by the department which
relates to the entirety of my original request) was, in your opinion, subject to the
engagement of other exemptions as stated. Is there a particular reason for the
selective withholding of this eminent 'opinion' other than the fact it might be
considered as being of a much more significant benefit to HM Treasury than those
tens of thousands of UK citizens diligently attempting to establish the cold, hard
truth about the careful and strategic selection of Sir (now Lord) Morse as opposed to
an informed, knowledgeable, experienced - and properly independent - tax judge?
The first reference which HM Treasury made to the claimed engagement of section
36 was in the interim reply (to FOI2021/15854) dated 6th July 2021. This response
made the claim that section 36(2)(b)(ii) of the FOI Act applied as HM Treasury believe
disclosure would, or would be considered as likely, to inhibit the free and frank
exchanges of views of the purposes of deliberation. On that basis, you extended the
time for consideration of the public interest test using section 10(3). On 1st
September 2021, HM Treasury communicated that they considered that the
information requested also engaged additional sections 36(2)(b)(i) and 36(2)(c) -
having taken 61 full working days to come to that conclusion, well beyond the
guidelines laid out by the Information Commissioner's Office. It is notable - and once
again self-evident - that the cause of this excessive delay was HM Treasury's own
internal discussions and their concerted efforts to ensure that this information was
withheld at any cost and with no regard to, or respect for, the statutory timescales
laid out under the Freedom of Information Act.
You state that your search has identified a 'large number' of documents to consider,
but fail to give any indication, or a sensible and realistic estimate, as to the actual
volume concerned. Whilst it is understood that an authority cannot claim section 12
for the cost and effort associated with considering exemptions or redacting exempt
information, it may apply section 14(1) where it can make a case that the amount of
time required to review and prepare the information for disclosure would impose a
grossly oppressive burden on the organisation - which is what you are claiming in
this case.
--- PDF page 4 ---
4
The Information Commissioner's Office consider there to be a high threshold for
refusing a request on such grounds, meaning that an authority is most likely to have
a viable case where:
a) the requester has asked for a substantial volume of information AND
b) the authority has real concerns about potentially exempt information, which it will
be able to substantiate if asked to do so by the ICO AND
c) any potentially exempt information cannot easily be isolated because it is
scattered throughout the requested material.
In the event that a refusal should lead the requester to complain to the ICO, they
would expect the authority to provide them with clear evidence to substantiate its
claim that the request is grossly oppressive, with any requests which are referred to
the Commissioner being considered on the individual circumstances of each case. It
is reiterated by the ICO that "public authorities must keep in mind that meeting their
underlying commitment to transparency and openness may involve absorbing a
certain level of disruption and annoyance."
There are many other factors which would need to be duly considered should such a
complaint be escalated to the ICO (assessing purpose and value, considering
whether the purpose and value justifies the impact on the public authority, taking
into account context and history, etc.) but if possible and in the spirit of
compromise, I would like to help the authority avoid such an outcome.
Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021. On the
continued assumption that it was Kemi Badenoch who provided the opinion, then all
communications covering this request should be held within a single mailbox - unless
you are likely to inform me that there are other forms of recorded information on
other types of media which contain this data? Please kindly confirm - thank you.
With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021, which I respectfully calculate will indeed reduce the
burden on the authority, and enable you to publicly demonstrate your stated
commitment to transparency and openness - thank you.”
On 28 February 2022 we provided our response refusing your request under section 14 of
the FOI Act. This is shown at Annex A of this reply.
On 4 April 2022, you requested an internal review as follows:
“I am writing to request an internal review of Her Majesty's Treasury's handling of my
FOI request 'Section 36 refusal - request to provide qualified person's name, opinion
and associated metadata'.
--- PDF page 5 ---
5
Thank you for your reply of 28 February 2022.
You have raised a number of highly contentious points within this response, and
made allegations which I believe are wholly unfounded. It is therefore my duty and
responsibility to address these for the benefit of any future investigation by the
Information Commissioner's Office, in its role as impartial adjudicator for requests
made to authorities under the Freedom of Information Act. The length of this
response is therefore reflective of the detail required to make that case.
Firstly, you claim that since 2020, I have made 10x FOI requests to HM Treasury in
relation to the 2019 Loan Charge. That number is incorrect. For accuracy, I have
listed the 6x requests I have actually made to HM Treasury since 2020 below in
chronological order, and have included the respective status of each on the
https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.whatdot
heyknow.com%2F&data=04%7C01%7Cfoirequests%40hmtreasury.gov.uk%7C
1812ecf843894da8524d08da1672539f%7Ced1644c505e049e6bc39fcf7ac51c18c%7
C0%7C0%7C637846977966935316%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4
wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sd
ata=%2BUMIYBpeKFIZTw6zBWJstjmKUd3t%2BeeQb7vYmzTXggw%3D&reserve
d=0 site as at today's date.
*19 May 2020 (FOI2020/15187)
Revised estimate of revenue to be generated from Loan Charge as a result of Covid-
19
Information not held by HM Treasury
*10 March 2021 (FOI2021/09786)
Evidence of the decision-making process which led to the selection and appointment
of Sir Amyas Morse
Refused by HM Treasury
*07 June 2021 (FOI2021/15856)
All incoming and outgoing messages from the Treasury smart phone which was
supplied to Amyas Morse
Refused by HM Treasury
*04 November 2021 (FOI2021/25946)
Emails / recorded information from/to HM Treasury senior officials containing the
search terms 'Morse' and/or 'Amyas' and/or 'LCAG' and/or 'Loan Charge Action Group'
Awaiting internal review response from HM Treasury
--- PDF page 6 ---
6
*04 November 2021 (FOI2021/25911)
Section 36 refusal - request to provide qualified person's name, opinion and
associated metadata
Awaiting internal review response from HM Treasury (THIS FOI REQUEST)
*08 November 2021 (FOI2021/26072)
Information relating to the agreement/contract which covered the
appointment/engagement of Sir (now Lord) Morse
Awaiting internal review response from HM Treasury
Your internal decision to issue updated reference numbers during the course of
communication exchanges is quite clearly your prerogative; however, it does not
detract from the fact that the source request stands unchanged - and, in the vast
majority of instances, remains unanswered or simply refused. In effect, this is the
crux of my own concern, as it is abundantly and transparently clear to any interested
party (and there are many thousands spread across all sectors of society) that HM
Treasury are deeply resistant to the disclosure of information on the subject of, or
related in any way to, the controversial and retrospective government policy known
as the Loan Charge.
Following intensive research, investigation and scrutiny over the last few years by
members of parliamentary committees, constituent MPs, professional bodies,
independent tax experts and the victims of this policy themselves, there is now a
wealth of compelling evidence currently available in the public domain to both
challenge and discredit the claims from government that this has supposedly been
subject to what is laughably referred to by HM Treasury as an 'independent' review.
To try to add yet further weight and fact to that evidence, I have raised Freedom of
Information requests using the constitutional rights available to me under the FOIA
in an attempt to seek - in the public interest - the necessary answers to those serious
and hugely important questions that the existence of that evidence prompts, and
raises. It is noted that whenever this evidence is referenced within any requests
which are submitted to HM Treasury using a public platform, there is invariably not a
single comment made in return, nor a hint of acknowledgement that it even exists.
This telling silence also extends to reports which have been compiled by the
associated All-Party Parliamentary Group (comprised of 248 parliamentarians at the
last available count) such as that published in June 2020 exposing the lack of
independence in the aforementioned review (link below), but which has gone
unanswered ever since. None of this is conjecture, or speculation - all this evidence
contains plain, simple truths and cold, hard facts, but continues to be ignored and
sidestepped by government, and HM Treasury as one of the primary instigators of
this policy.
https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.loanchar
geappg.co.uk%2Fwp-content%2Fuploads%2F2020%2F06%2F2020-06-29-Loan-
Charge-APPG-report-on-the-FOI-exposing-that-the-Morse-Review-wasnt-
independent.pdf&data=04%7C01%7Cfoirequests%40hmtreasury.gov.uk%7C1
--- PDF page 7 ---
7
812ecf843894da8524d08da1672539f%7Ced1644c505e049e6bc39fcf7ac51c18c%7C
0%7C0%7C637846977966935316%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wL
jAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata
=WLz3EVuXMBCbFDbrnqRhik8QhXlJzwGzTQjQqS9c9Us%3D&reserved=0
As a complete nobody - a lowly, unimportant, average worker-citizen of this country
- I am not afforded the opportunity to sit in the same room as ministers or
policymakers, senior officials or advisers, to debate this evidence and to ask for
truthful and honest answers to those many questions. My only route, indeed my only
option, is to try to utilise the Freedom of Information Act and to exercise the rights
which that legislation bestows upon me. Other than the request I raised on 19 May
2020 (FOI2020/15187), every other I have made to HM Treasury has been on the
subject of, or related to, the Morse review and the process which allowed him to be
placed at the forefront of this exercise by government.
The dearth of information supplied by HM Treasury in response is testament to that
entrenched and manifest resistance to disclosure; should any individual feel so
inclined to read the content and discern the nature of those responses, they will be
left in no doubt as to the profound significance of the information being withheld.
By any means necessary, it would appear.
On the premise of your inaccurate calculation as to the number of requests I have
made, you have informed me that you intend to apply an exemption under section
14(1) of the FOIA to prevent disclosure of any information under this request, and
potentially all others I might submit in future. At this point, I would like to be
granted the chance to reply to each element of your argument and to formulate a
defence to that charge of "a disproportionate or unjustified level of disruption,
irritation or distress."
Your first accusation, that I have made 10x FOI requests to HM Treasury in relation
to the 2019 Loan Charge, has already been proven incorrect. What you visibly fail to
share is the number of requests from an individual which are considered acceptable
or appropriate by HM Treasury given the enormous public interest on the subject of
the Loan Charge, as well as the attention and regard which continues to be focused
on the flawed and heavily-biased conclusions arising from the Morse review - does
such a figure exist?
Secondly, you unambiguously extract selective paragraphs relating to the use of
section 14 which support your 'view' that this request (and others) should now be
refused. There are, as you will be aware, many other paragraphs and clauses which
would negate that prejudiced and partisan 'view'. Should this stance be maintained,
it is almost certain that the Commissioner will be forced to adjudicate, despite the
expanding workload which they already face as a result of the refusal by public
authorities to properly comply with their obligations under the terms of the FOIA.
On the face of it and contrary to the essence of the Freedom of Information
legislation, it would seem to be a shameful dereliction of public duty and service to
demonstrate such an overt unwillingness to be transparent and open to members of
the public; yet it sadly appears to be a consistent modus operandi within HM
Treasury at the present time on this subject.
To counter this view which you suggest is sufficient on its own to refuse disclosure, I
would like to draw your own attention to those many others which would formulate
--- PDF page 8 ---
8
a different, and support an opposite, conclusion. As mentioned in the most recent
response I have made to HM Treasury, I have looked closely at the revised and
updated guidance recently published by the ICO on section 14 of the FOIA. It bears
repeating here that the FOIA gives individuals a greater right of access to official
information in order to make bodies more transparent and accountable, and as such
it is an important constitutional right. More significantly perhaps, the ICO state that
the claimed engagement of section 14(1) is a 'high hurdle' for any public authority
and that it is concerned with the nature of the request rather than any damage
releasing the requested information may have - an important and notable
distinction. If a larger public authority (such as HM Treasury with a confirmed FTE
workforce of around 1300 people) is attempting to claim use of section 14, then it is
not sufficient to argue that a request is burdensome because you have only allocated
a small number of officers to handle requests.
The guidance published by the ICO makes it clear that section 14(1) can only be
applied to the request itself and not the individual who submitted it. You cannot,
therefore, refuse a request on the grounds that the requester themself is 'vexatious'.
Similarly, you cannot refuse a new request solely on the basis that you have
classified previous requests from the same individual as vexatious. You state that you
have reviewed the impact of my recent FOI requests and consider that dealing with
these has resulted in an unjustified level of disruption. No documented evidence or
tangible commentary to support that claim is offered, or shared. Were HM Treasury
to honestly redraw and impartially re-examine the lines of engagement with
members of the public on the subject of the Loan Charge and the Morse review, this
perceived level of disruption would immediately disappear. By not doing so, as is the
case currently, then those members of the public who hold an interest in these
subjects will persist in their attempts to seek information which reveals the truth
behind this unjustified and ill-conceived policy.
It is of some topical note that the Post Office Scandal (also known as the Horizon IT
Scandal) has been so conspicuous in the broadcast media over recent weeks, with
the ongoing public inquiry expected to run for most of this year. The most senior
officials at the Post Office, supported by its single shareholder that is the UK
government, roundly and falsely condemned victims to financial ruin, or even worse,
jail. Years later, it is established by the courts that the evidence used was unsound,
the processes around prosecution fundamentally flawed, and that a complete (and
avoidable) miscarriage of justice had taken place in plain sight of government and its
wholly state-owned company, despite the continued warnings and red flags that had
been raised by those representing and defending the SPMs. The parallels here are
not lost on victims of the Loan Charge, which number in their tens of thousands and
contrast with the 700+ SPMs who were targeted using deceitful, underhand
methods and dishonest tactics and strategies by those responsible for those
prosecutions and who themselves were shamefully and deliberately intent on
evading any culpability, avoiding any comeback or taking any blame. Only now are
victims being properly heard, and their lives being returned. History has a habit of
often repeating itself - governments never seem to learn from their mistakes, as the
Loan Charge controversy continues to prove.
Your original response of 02 December 2021 claimed my request was too wide and
refused it under section 14(1). I made it clear in my reply to that refusal, in the spirit
--- PDF page 9 ---
9
of compromise, that I wished to help the authority avoid an escalation to the
Information Commissioner's Office, and narrowed the scope accordingly. I
commented in that same reply that your search had identified a 'large number' of
documents to consider, but you had failed to give any indication, or a sensible and
realistic estimate, as to the actual volume concerned. In your most recent response,
you once again fail to give any indication, or a sensible and realistic estimate, as to
the actual volume concerned, and just repeat the same phrasing used previously. It
would appear that you consider this statement quite sufficient when dealing with a
nobody like me, but it is my understanding that the Commissioner will require actual
evidence. It would also appear that now might be an appropriate point at which to
repeat a phrase I have previously referenced myself (and as reiterated by the ICO in
their guidance) - that "public authorities must keep in mind that meeting their
underlying commitment to transparency and openness may involve absorbing a
certain level of disruption and annoyance." Not at HM Treasury, apparently.
It is noted within the same ICO guidance that when section 14(1) is being claimed,
context and history can indicate that the requester had a reasonable justification for
making their request, and that because of this the public authority should accept
more of a burden or detrimental impact than might otherwise be the case -
weakening any argument that the request could be cast as vexatious. Even more
important and significant (particularly in the context of this request) in that
published guidance is the entry that states "where serious failings at the authority
have been widely publicised by the media, giving the requester genuine grounds for
concern about the organisation’s actions, the authority should be mindful to take
into account the extent to which oversights on its own part might have contributed
to that request being generated." Those oversights have been consistently shared
and well documented by many others, not least the All-Party Parliamentary Group,
different parliamentary committees, tax professionals and countless news journalists
and media commentators; yet still, HM Treasury remain in denial.
I am encouraged that you made reference to the Dransfield case (the Information
Commissioner vs Devon County Council & Dransfield [2012] UKUT440 (ACC), (28
January 2013), where purpose and public interest were both under scrutiny at the
Upper Tribunal. You claim that when considering all the factors associated with my
requests, you do not find a serious purpose to outweigh this impact.
I wonder where I should start.
On the assessment of value or serious purpose, the Upper Tribunal in Dransfield
asked itself, “Does the request have a value or serious purpose in terms of there
being an objective public interest in the information sought?” (paragraph 38). The
public interest can encompass a wide range of values and principles relating to what
is in the best interests of society, including, but not limited to:
holding public authorities to account for their performance; understanding their
decisions; transparency; and ensuring justice.
It is clear from the Upper Tribunal’s findings in Dransfield that when considering
value and serious purpose, the concern is with assessing whether there is public
--- PDF page 10 ---
10
interest in disclosure. In many cases the value and purpose of the request is
apparent from the:
nature of the information requested; context of the request; or history of the
requester’s engagement with you.
In other cases it may be less clear what purpose would be served by disclosing the
information, but as the Upper Tribunal in Dransfield observed:
“public authorities should be wary of jumping to conclusions about there
being a lack of any value or serious purpose behind a request simply because it is
not immediately self-evident.”
If the value or purpose of the request is not immediately obvious, an authority may
take account of any comments the requester might have made about the purpose
behind their request or any evidence they are willing to volunteer. The FOIA does
not require a requester to give their reasons for making a request and they cannot
insist they do.
I have tried - with very little success to date - to hold HM Treasury to account for the
major part they have played in the Loan Charge, and the subsequent failings
associated with the Morse review which were unquestionably influenced and
engineered by the authority. I have provided evidence and fact along the way to
substantiate these findings, all of which has been ignored, with my requests for
information being consistently refused and the data withheld. One might consider
that to help the public understand their decisions, HM Treasury would be only too
willing to share the information being sought for the removal of any doubt in that
arena; however, each request for anything which references the Loan Charge or the
Morse review meets the same fate, with tenuous exemptions and spurious reasoning
applied to ensure non-disclosure. No sane, reasonable or objective person could
possibly claim that there is the slightest transparency to this process - it is alarmingly
evident that government and HM Treasury wish to close this debate down, to
suppress access to the truth and to stifle the possibility of any further change to this
policy. The key element here is perhaps 'ensuring justice'. HM Treasury holds
information which would expose not only the lack of a proper legal basis for the
Loan Charge (as is evident from numerous letters and reports from the All-Party
Parliamentary Group to ministers and senior officials, none of which have received a
satisfactory or comprehensive answer) but also the complete lack of any
independence to the stage-managed review which was assured a pre-determined
outcome by the appointment of Lord Morse to lead the team (which itself was
comprised entirely of HMT and HMRC senior staff members) by government. I will
provide further evidence to support this later within this same submission.
The nature of the information requested, in and of itself, is enough of a clear
indication to contradict the claim from HM Treasury that there is no serious purpose.
Five of the six requests I have made to HM Treasury are directly linked to the
appointment of Lord Morse to head the government's review, the concealed and
unverified process which enabled that appointment and his communications, at the
time and since, on the subject of that review. The context of these combined
requests therefore requires no further explanation and no extended logic or
reasoning - my focus with these five requests is precisely what I have summarised in
that previous sentence. There is a firm, legitimate and widespread belief, based on
--- PDF page 11 ---
11
information revealed in other FOI disclosures that the Morse review, claimed by
government as an independent exercise, was anything but. This information has
provided weight and substance to the conclusion which all those seeking justice
have long expressed as fact - that there is a pronounced and plausible suspicion of
wrongdoing by the authority, and that this evidence, held by HM Treasury, should
be disclosed into the public domain to finally confirm what has been consistently
alleged since the very date Morse was appointed.
My own approach to these Freedom of Information requests to HM Treasury is
mirrored in the case of Marsh vs ICO (EA/2012/0064, 1 October 2012), where the
appellant had asked Southwark council for information about the outcome of a
review into the methodology for an increase in court costs (which had followed on
from previous enquiries on the same subject). The council had refused the request as
vexatious on the grounds that it was part of a long series of related, overlapping
correspondence which was both obsessive and having the effect of harassing the
council. The Tribunal considered the history of Mr Marsh’s contact with the council
from his first request about the calculation of court costs in 2006, through to 2008
when the council broke off further discussions and on to 2011 and the refusal of his
most recent request. They also took account of an Audit Commission investigation,
instigated by Mr Marsh, which had found that there was scope for the council to
improve its arrangements for managing court costs and liability orders. No different
to the All-Party Parliamentary Group, made up of 248 MPs and peers, publishing a
report into the clear lack of independence of the Morse review - to which no
government response has ever been received.
In allowing the appeal they commented that: “We think it appropriate, and indeed
necessary, for us to take into account this evidence because it reinforces our own
view that the Central Enquiry was not vexatious. We have demonstrated how Mr
Marsh pursued a legitimate concern on an issue of some significance, at first with a
degree of co-operation from the council and, when that was removed, by dogged,
forensic investigation of the information the council provided to him or to the
public. It was a campaign that led the council’s own Overview and Security
Committee to investigate in 2008 and some of its members to express concern about
the way in which cost claims appeared to have been assessed. The issue under
consideration was also a relatively complex one (exactly as this one happens to be)
and provides further justification for different strands of enquiry when seen in
context of previous requests having been pursued in parallel and investigated in
some depth.” (paragraph 30).
All record of my engagement with HM Treasury is in the public domain and available
for anyone to see. I have provided substantiated evidence to back up my requests
for information, and have myself doggedly, forensically and repeatedly investigated
the information which has been drip-fed by the authority, and which in turn has
persuaded me to seek those in-depth answers and disclosures from HM Treasury on
the referenced subject. I have been informed that the public interest is not served by
these requests - try telling that to the tens of thousands of victims and their families
who remain mired in this long-running debacle. I would suggest in the strongest
possible terms that these 5x requests - all on or related to the subject of the Morse
review - are entirely self-evident in their clear demonstration of value and serious
purpose. For the authority to state otherwise is a plain and obvious attempt to shut
this line of inquiry down, lest it eventually reveal further information which exposes
the lengths and measures taken by senior officials within HM Treasury to silence the
--- PDF page 12 ---
12
sizeable opposition to this policy and to withhold data which justifies and validates
those accusations of a non-independent review from MPs, peers and the wider
public. There is an obvious question to table in this situation - if the authority truly
has nothing to hide, then why are they so intensely resistant to disclosure of any of
the information which has been requested?
You conclude your response by stating your belief that "several different requesters
are acting in concert as part of a campaign that disrupts the organisation", and that
this "has caused a disproportionate and unjustified level of disruption, irritation or
distress."
My requests have been made in concert with no-one. If you believe that others
might be acting in such a manner, then you are surely obliged to produce evidence
to that effect. What actual number or volume of requests constitute a
"disproportionate and unjustified" amount of "disruption, irritation or distress"? It
would appear more likely that it is the undisguised fear of disclosure which is
causing the latter within HM Treasury, for I believe that I have provided both
proportionate and justified reasoning behind every request I have made. If you
continue to claim otherwise, then is there a published limit or threshold which is
officially deemed 'acceptable'?
In their published guidance, the ICO confirm that it is important to recognise that
campaigns are not in themselves vexatious. The existence of a campaign may be the
result of a legitimate public concern about an issue and so reflect a weighty public
interest in the disclosure of the information. The subjects of the Loan Charge and the
associated Morse review have prompted unprecedented numbers of MPs, peers, tax
and legal experts, journalists and media commentators to speak out in opposition -
there could be no higher level of 'legitimate public concern' on display, or 'weighty
public interest' in the disclosure of the information sought.
The ICO proceed to explain that it is also important to bear in mind that sometimes a
large number of individuals will independently ask for information on the same
subject because an issue is of media or local interest, and that an authority should
therefore rule this explanation out before arriving at the conclusion that the
requesters are acting in concert or as part of a campaign. It is loosely estimated by
government that 50,000 people and their extended families are impacted by this
legislation and these (unproven in law) demands - it would be reasonable to suggest
that the actual figure is therefore closer to 200,000 people. All of those people have
access to, and the constitutional right, to submit a Freedom of Information request
to HM Treasury or any other public authority. Moreover, at what point, or at what
number, is the public interest considered positively 'engaged'? How many more
people need to commit suicide as a result of this policy - are eight confirmed cases
not quite enough to tip that balance?
In Thackeray vs ICO, (EA/2011/0082 18 May 2012), the Tribunal unanimously upheld
the complainant’s appeal and observed that:
“The dogged pursuit of an investigation should not lightly be characterised as an
obsessive campaign of harassment. It is inevitable that, in some circumstances,
information disclosed in response to one request will generate a further request,
--- PDF page 13 ---
13
designed to pursue a particular aspect of the matter in which the requester in
interested. We would not like to see section 14 being used to prevent a requester,
who has submitted a general request, then narrowing the focus of a second request
in order to pursue a particular line of enquiry suggested by the disclosure made
under the first request” (paragraph 26).
No reasonable person could fail to agree.
Earlier in this message, I made reference to further evidence which reveals the
careful stage-management within HM Treasury of the scope, terms and conditions,
timing and potential candidates for what became the 'Morse' review. In early
September 2019, the Prime Minister (maintaining an earlier promise he had made
during the leadership contest) announced a review of the Loan Charge, saying, "It is
a very, very difficult issue and what I have undertaken to do is have a thorough
going review."
At the time of this announcement, loud and vociferous calls were made by MPs and
opponents of this policy for this review to be led by an experienced and
knowledgeable - and truly independent - tax judge, as that was considered the only
feasible solution to the unravelling of complex tax and legal issues which needed to
be scrutinised, investigated and properly analysed. The government instead
appointed Sir Amyas Morse. On 21 October 2021, the Loan Charge Action Group
wrote a 12-page letter to Lord Morse, titled 'Loan Charge Review in light of evidence
not known at the time'
(https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.hmrcloa
ncharge.info%2Fwp-content%2Fuploads%2F2021%2F10%2FLCAG-letter-to-Lord-
Morse-21st-October-2021-
1.pdf&data=04%7C01%7Cfoirequests%40hmtreasury.gov.uk%7C1812ecf8438
94da8524d08da1672539f%7Ced1644c505e049e6bc39fcf7ac51c18c%7C0%7C0%7C
637846977966935316%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLC
JQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=WjLvvevv
%2ButTEQByxNH4%2FEIeAIyoc21lqRTbHTN%2F98I%3D&reserved=0). This
letter summarised the flaws in the review's conclusions and asked Lord Morse to
respond to those serious concerns. To date, no reply has been received despite a
follow-up on 04 February 2022
(https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.hmrcloa
ncharge.info%2Fwp-content%2Fuploads%2F2022%2F02%2F2022-02-04-LCAG-
further-letter-to-Lord-Morse-February-2022-
final.pdf&data=04%7C01%7Cfoirequests%40hmtreasury.gov.uk%7C1812ecf84
3894da8524d08da1672539f%7Ced1644c505e049e6bc39fcf7ac51c18c%7C0%7C0%
7C637846977966935316%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDA
iLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=TkzZzyv
Vyq34GMUJCjnJ0JRhR%2FYIMh9VXo05IUqvTnM%3D&reserved=0) asking once
again for a response to that letter. As a recently appointed parliamentary peer, now
subject to the House of Lords Code of Conduct and compelled to observe the seven
general principles of conduct identified by the Committee on Standards in Public
Life, his lack of a response, or even a respectful acknowledgement of receipt, is
something which will come to define his role in that review and fittingly exposes the
clear and obvious lack of independence which he brought to the position.
A recent Freedom of Information response (to request FOI2021/27262 -
https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.whatdo
--- PDF page 14 ---
14
theyknow.com%2Frequest%2F802279%2Fresponse%2F1982977%2Fattach%2F3%2F
FOI2021%252027262.pdf%3Fcookie_passthrough%3D1&data=04%7C01%7Cf
oirequests%40hmtreasury.gov.uk%7C1812ecf843894da8524d08da1672539f%7Ced
1644c505e049e6bc39fcf7ac51c18c%7C0%7C0%7C637846977966935316%7CUnkn
own%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwi
LCJXVCI6Mn0%3D%7C3000&sdata=Q60k3iMp%2B4tEVckg3bJ3k2ymGGKjg2X
nJOz9AGIUA8w%3D&reserved=0) by HM Revenue & Customs included a 6x
page memorandum from HM Treasury, dated 27 August 2019 and headed 'Loan
Charge Review'. The author starts their introductory comments "The Prime Minister
has committed to a ‘proper independent review’ of the disguised remuneration Loan
Charge.", but follows this with "This submission sets out a range of options for a
review and seeks a steer on the main design choices: the scope, independence, and
timing." Note use of the revealing word 'choice' on the subject of 'independence'. An
oxymoron to truly savour.
The author continues - "The central choice will be between satisfying campaigners
opposed to the Loan Charge, and keeping the policy, including its revenue, intact."
Would any reasonable person conclude that an honest, legitimate and properly
independent review of a controversial government policy could possibly be 'steered'
beforehand to ensure that the choice of 'keeping the policy' remained intact? What
truly independent reviewer would ever accept such limit and constraint? Perhaps an
experienced tax judge would have insisted upon such autonomy - which is probably
why that option was not 'chosen'.
Further entries from the same introduction section of the memorandum include:
"Those pressing for a review will very strongly criticise anything that does not
look like it will repeal the Loan Charge", "We would strongly recommend a review
which aims to protect the policy as much as possible", "We are never going to satisfy
the campaigners without a full reversal, but we might show some MPs we have
taken concerns seriously, and give them enough of a reason to change their views",
"We will also need to find someone to lead the review within days and any individual
will face hostile personal criticism if they do not recommend reversing the charge",
"We propose adapting this into a note to send to No 10 reflecting your steers".
There's that 'steer' word again, on what is still foolhardily claimed as an 'independent'
review.
The section headed 'overall scope' and states:
"You asked for advice on how to mitigate the risks around the review", "The most
fundamental question is whether to review the Loan Charge policy itself", "At official
level, our view is that we recommend ruling out a repeal from the start for fiscal,
practical, and wider reputational reasons", "As covered in detail later, any review that
looks at the merits of the entire policy (as opposed to some elements of it) will take
longer, potentially require primary legislation as a result, and strengthen the APPG’s
case for a pause in settlements and collections", "Reversing or pausing the Charge
would create parliamentary difficulties, and definitely require primary legislation", " it
will demonstrate that non-compliance and campaigning can be successful, including
to campaigners against off-payroll reform". So much for that false, and perverse
claim to 'independence'.
Another section, headed 'scope and MP reaction':
--- PDF page 15 ---
15
"However, we understand that this does not fully honour the spirit of the Prime
Minister’s commitment, and a sizeable number of MPs’ expectations, and we have
discussed this issue with the FST", "He supports a short, independent review “of the
policy”, so that the option of repealing it is implicitly in scope. His view is that
anything short of that will lay us open to the charge of not having done the review
fairly, and it would not to draw a line under the issue with MPs as a result".
It certainly has not drawn that line and quite justifiably has not done so,
given the fact that well over two years after the review's conclusion, the issue
remains as contentious and disputed as ever in the public domain.
I could continue ad nauseam, but it is perhaps better to let the author have the last
word on this section:
"At official level, we recommend not including the Loan Charge policy itself in the
scope of the review, but recognise this may not go far enough for MPs. Do you want
the repeal of the Loan Charge to be in scope?" For the benefit of the Information
Commissioner - should this be necessary to share at any stage - the Loan Charge was
never allowed to be 'independently' reviewed, hence the 5x related requests I have
made to reveal that important, additional fact and evidence, and to determine the
actual truth in this matter - which is a far cry from what we continue to be told by
HM Treasury - "A longer, judicial style review does not meet your aims and we have
therefore ruled it out". Those 'aims' would clearly include a notable lack of any
independence from the 'selected' reviewer.
To corroborate this evidence, other FOI requests have revealed and echoed similarly
worded exchanges at senior levels within HM Treasury and HM Revenue & Customs.
FOI2021/25439
Beth Russell, HMT Director General Tax and Welfare, in an email dated 08 September
2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "A few
thoughts below on the handling plan. Also cc’ing HMRC seniors." The email
continues -
"I think it is a good idea for FST to write to MPs (or at least those who have been
interested). In particular, good in that to head off criticisms that LCAG will make of
the review in particular why we have not suspended the charge while the review is
being undertaken, why we are focusing it on individuals etc."
"Beyond that, i don’t think FST or other ministers should meet any stakeholders to
explain further or during the period of the review (with ref to the last bullet of
stakeholder section in the note)."
"Strongly agree we need to ensure No10, whips, CX’s PPS etc all have good briefing,
particularly on the issues LCAG are likely to complain about after the
announcement."
"On press handling, I’m not the expert but I would have thought we do want to
contact those journalists who have been particularly interested in this eg.
--- PDF page 16 ---
16
REDACTED, to explain the review. And again, try and head off the inevitable LCAG
criticisms on suspension etc."
"I also paused on FST doing media. Not sure that’s a good idea."
"The biggest risk on Tuesday is LCAG coming out and complaining about the review
not being wide enough and the charge not being suspended. Indeed we know they
will so key is being on the front foot on rebutting/explaining why."
"We shouldn’t sound too defensive on these points – we’ve got good reasoning why
we are doing what we are doing and the review itself is a major concession".
Name redacted, HMT (Strategy, Planning and Budget Projects), in an email dated 23
August 2019 to senior colleagues in HM Treasury and HM Revenue & Customs,
wrote "Here is a skeleton of the advice on what a review of the Loan Charge could
look like." The email continues -
"Separately, as discussed, the Chancellor has asked us to work up, on a contingency
basis, what the minimum form of an independent review would look like, in case the
PM wants to proceed with one. Welcome your views on what this should cover, but
at the minimum it should set out something that that can reasonably be described as
an independent review, but that minimises the spending/legislative/other risks that a
review creates."
"You have options for what a review could potentially look like"
"The key question is what you would want to achieve with a review, and what it is
practically possible for it to achieve."
"The Prime Minister committed to a “proper, independent review”. He also signed a
letter that implicitly said that such a review went beyond what the government did
with the previous Section 95 report."
"We recognise that you might want to try to meet the PM’s commitment in some
form, as a way of demonstrating that he’s meeting his promises, and dampening
criticism of the Loan Charge."
"You will therefore face strong criticism of anything that falls short of a full review of
the entire policy, lasting months, led by an independent judge, and including a
pause in the Loan Charge created by primary legislation."
"Our conclusion is that our arguments in support of a short review will only get us so
far and you will need to accept that the APPG and LCAG will strongly dispute in the
press that we have met the PM’s commitment."
"It would explicitly not look at whether there should be a Loan Charge. This will need
to be made clear from the start to avoid raising expectations that the Loan Charge
will be reversed."
"Anything that falls short of a full review, potentially leading to the repeal of the
Loan Charge, will be criticised by MPs and in the press. You would also face renewed
criticism in October when the review reports."
--- PDF page 17 ---
17
"We are not suggesting that you hold a review. A larger one puts £3.4bn at risk... A
smaller one would probably still be criticised as falling short of the PM’s
commitment."
FOI2019/02052
Name redacted, HMT Senior Policy Advisor - Specialist Personal Tax, Personal Tax
Team, PTWP, in emails dated 09 September 2019 to senior colleagues in HM
Treasury and HM Revenue & Customs, wrote "You previously cleared a version of the
terms of reference which limited the scope to individuals who entered schemes
directly, and explicitly ruled out employers from the scope of the review."
" He (Morse) understood the rationale for restricting the review to individuals – and
that this is where most of the criticism lies – but on a point of principle didn’t want
the scope of the review to explicitly rule out covering employers so he has the
discretion to go wider if necessary. Officials agreed a compromise wording with Sir
Amyas which makes clear (BR) that the focus of the review is to consider the impact
on individuals, but does not explicitly rule employers out of scope." (BR)
"...officials believe he (Morse) wants the discretion to look at things broadly but in
practice, will be guided by the focus of the review on individuals." (BR)
"Discussions today with Sir Amyas show he has a 'sensible' approach to the review."
(BR)
"Thanks all, happy to go with simply contractors and no further detail in the ToRs as
we have a clear definition we could point to if needed in future communications
with the reviewer about scope. If concerns are raised about this definition, I would
like to flag to seniors that the alternative option is just to say individuals, but as this
definition is less clear there is more scope for the reviewer to look at transfer of
liability from employers etc."
"In terms of handling the concerns of MPs and campaigners, the updated scope
would be less subject to the criticism that we are excluding worthy groups such as
individuals who claim they were forced into schemes by their employers."
(BR) - also includes suggested wording by Beth Russell (in her responses to the above
on the same date)
Suzy Kantor, HMT Deputy Director Personal Tax, in an email dated 09 September
2019 to senior colleagues in HM Treasury and HM Revenue & Customs, wrote "He
(Morse) didn't want to explicitly limit the terms of reference to take employers out of
scope but was content with the focus on individuals and the likely impact on the
scope of recommendations." The email continues -
"I was relatively reassured - would be interested in Carol's views - that in reality, he'll
stay focussed on individuals and not stray further."
There are many more examples from senior officials' comments within both HM
Treasury and HM Revenue & Customs which reinforce the exact same message - that
despite the Prime Minister's public commitment to a ‘proper independent review’,
--- PDF page 18 ---
18
the engineered reality of that review was altogether different. It was deliberately
narrowed in scope to implicitly exclude employers, which was made transparently
clear to Morse in those meetings which took place prior to the work commencing.
Any potential for a full repeal of the policy by the reviewer was entirely ruled out -
again, this was made clear to Morse in those same meetings. He was also made
aware that any recommendations he might consider appropriate would be limited in
scope due to the artificially confined nature of the terms of reference, all of which
had been discussed in minute detail at senior level in HM Treasury and HM Revenue
& Customs to ensure, with absolute confidence, that any proposed changes which
Morse could potentially make would only have a minimum effect on the policy as it
stood. Those same officials were intent on maintaining focus only on those
individuals being targeted by government - again, shutting the door on any party
being held liable other than the individual and ignoring the Supreme Court ruling
from 2017 (in Rangers) which held that the employer was liable for any tax deemed
to be due.
Suzy Kantor's communication to senior colleagues that Morse would not 'stray
further' was proved 'reassuringly' correct and duly protected the vested interests of
those defending the retrospective policy in HM Treasury and HM Revenue &
Customs. The wealth, indeed the overload of evidence which is available can lead to
only one conclusion - that it was not, in any sense or meaning of the word, an
'independent' review. When the Director General Tax and Welfare at HM Treasury
states that "the review itself is a major concession", one can form a clear sense of the
indignation and annoyance felt by those senior officials at being forced to face, and
submit to, such an unexpected affront to their 'authority', following concerted
pressure from Members of Parliament so vehemently opposed to their punishment-
driven policy.
It is commonly quoted that the first casualty in any war is the truth. I would not
hesitate to state that in the war of words which has ensued over the Loan Charge
and the Morse review, truth has been institutionally set aside and covered up by HM
Treasury with what would appear to be an alarming and unacceptable regularity.
Any reasonable, objective or considered request on these subjects is consistently
withheld because the truth would further undermine the (already overstretched)
credulity of HM Treasury's claims that this review was afforded any kind of
independence. Continuing to maintain the same, tired 'line' now just looks desperate
- but it continues nonetheless.
There is still an opportunity for HM Treasury to alter position and change tack by
disclosing the information I have requested. Should those responsible for making
that decision choose to deny this legitimate request and continue to withhold in
order to prevent the truth which this information holds from being exposed, and for
the authority to be held accountable, then this will be taken to the Information
Commissioner's Office on appeal.”
The Review
I have considered the response we provided to you and whether our handling was
compliant with our obligations under the FOI Act.
The extract below is the request for information made in your email of 31 January 2022:
--- PDF page 19 ---
19
Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021. On the
continued assumption that it was Kemi Badenoch who provided the opinion, then all
communications covering this request should be held within a single mailbox - unless
you are likely to inform me that there are other forms of recorded information on
other types of media which contain this data? Please kindly confirm - thank you.
With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021, which I respectfully calculate will indeed reduce the
burden on the authority, and enable you to publicly demonstrate your stated
commitment to transparency and openness - thank you.”
To summarise, you requested all information relating to the submission to HM Treasury’s
qualified person in relation to section 36 of the FOI Act (which was engaged in relation to
your request handled under our reference FOI2021/15854) and all metadata held relating
to FOI2021/09786, FOI2021/15854, FOI2021/22729 and IR2021/25860 (four separate
requests).
I have reconsidered whether HM Treasury was correct to refuse this request under section
14(1) of the FOI Act. It would be helpful for me to first explain that that HM Treasury
holds over 300 emails (many of which have attachments) in scope of these four requests.
As you are aware Section 14(1) of the FOI Act is designed to protect public authorities by
allowing them to refuse any requests which have the potential to cause a disproportionate
or unjustified level of disruption. The Information Commissioner recognises that dealing
with such requests can place a strain on resources and get in the way of delivering
mainstream services or answering legitimate requests.
In order to comply with your request we would need to review each document separately
with a view to determining whether any information was exempt from release, for
example, due to sensitivities or personal data, and to then redact any exempt material.
I consider that the effort required to review, assess and extract that information would be
considerable and would require a disproportionate level of staff effort. I therefore consider
that your request does engage section 14(1) of the Freedom of Information Act due to the
disproportionate effort that would be required to comply with the request and the
department’s original decision was correct.
I would again explain to you that it may be that if you were to amend your request, for
example, by narrowing the focus and being more specific about the type of information
that you are particularly interested in we may be able to comply with a future request.
However, we cannot guarantee that this would be the case.
--- PDF page 20 ---
20
I would also refer to you to the Information Commissioner’s guidance to requesters which
can be found online at:
https://ico.org.uk/for-the-public/official-information/
I should also stress that I consider the Treasury has at all times considered your requests
fairly and correctly within the framework of the FOI Act and our refusal notices have
always been based upon our interpretation of the Act.
Finally, it is clear from your email that you are deeply unhappy with the Loan Charge policy
and disappointed with the outcome of the review. However, your concerns cannot be
addressed via FOI requests and you may wish to express your views via other routes, for
example, through your MP.
Conclusion
While I am aware you may find these conclusions disappointing I hope that by setting out
the basis of the review, its findings and conclusions above, you will be assured that the
Treasury has, on your behalf, carried out a thorough and considered review of the request
you made and the responses that the Treasury gave under the FOI Act.
If you are not content with the outcome of this internal review you have the right to apply
directly to the Information Commissioner for a decision. The Commissioner can be
contacted at: The Information Commissioner's Office, Wycliffe House, Water Lane,
Wilmslow SK9 5AF.
Yours sincerely
Head of Information Rights Unit
Annex A
--- PDF page 21 ---
21
Information Rights Unit
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
F Thompson
Dear F Thompson
020 7270 5000
foirequests@hmtreasury.gov.uk
www.gov.uk/hm-treasury
28 February 2022
Ref: FOI2022/01891
Freedom of Information Act 2000
Thank you for your enquiry of 31 January 2022, which we have considered under the
terms of the Freedom of Information Act 2000 (the FOI Act).
You asked for the following information:
“Thank you for your reply of 2nd December 2021.
My original request, submitted on 4th November 2021, asked HM Treasury to
disclose information on three closely connected points. These were all directly linked
to your previous refusal to provide evidence of the decision-making process which
led to the selection and appointment of Sir (now Lord) Amyas Morse, and which you
withheld based on your claim that disclosure of this information is apparently not in
the public interest.
The first of these points was clear in requesting the name of the qualified person
who provided the opinion which HM Treasury claim justifies the use of section 36 of
the Freedom of Information Act in this instance. Instead of supplying the name of
that person, you just include a statement that the Exchequer Secretary to the
Treasury is the 'qualified person' in relation to HM Treasury, but which does not
answer the question as posed.
Helen Whately was appointed Exchequer Secretary to the Treasury on 16 September
2021 and is (currently) still in that role. Her predecessor was Kemi Badenoch, who
held the post from 13th February 2020 to 15th September 2021. Can you please
therefore confirm - with a straight 'yes' or 'no' response for complete clarity on this
matter - that it was Kemi Badenoch herself who provided the opinion that disclosure
of the requested information was not in the public interest?
--- PDF page 22 ---
22
For the purposes of this reply, I will draw the assumption that the answer is 'yes' -
otherwise, one might reasonably conclude that your prior statement indicating that
the Exchequer Secretary to the Treasury is the 'qualified person' in relation to HM
Treasury was an attempt to somehow obfuscate the facts or supply a misleading
answer, which I trust will not turn out to be the case.
The second point asked for the full and unabridged text of that qualified person's
opinion, and all recorded information, of any type or in any format, which contains
submissions (or exchanges of opinion) provided to the qualified person for
considering that request. You have confirmed that HM Treasury does hold
information within the scope of my request.
The third point asked for all metadata held in any recorded form by the department
which relates to my original request (reference FOI2021/09786), the subsequent
request (FOI2021/15854), the next allocated request (reference FOI2021/22729) and
the recently allocated internal review (reference IR2021/25860). Again, you have
confirmed that HM Treasury does hold information within the scope of my request.
However, you claim that this request is 'very wide in scope' and that your search has
identified a large number of documents to consider, declaring that you would need
to review each document separately with a view to determining whether any
information was exempt from release due to sensitivities or personal data, and to
then redact any exempt material. You contend that my request engages section
14(1) of the Freedom of Information Act due to the disproportionate effort that
would be required to comply, but state that you may be able to comply with a
future request if the focus was narrowed.
This claim - that you have identified a large number of documents in relation to this
request - reveals the serious significance and importance of the matter at hand and
self-evidently exposes the lengths to which HM Treasury is prepared to go in order
to prevent disclosure of this information, lest it demonstrably reveals the internal
unease and apprehension about its own culpability being unwillingly divulged, as
well as the liberal disregard for public transparency and truth which still seems to
ferment within the department. The authority will be fully conversant with the
report published by the Loan Charge All-Party Parliamentary Group (now the Loan
Charge and Taxpayer Fairness All-Party Parliamentary Group) in June 2020, which
laid bare the distinct lack of independence and the unacceptable level of
interference with the review by those government departments with a hugely vested
interest in the outcome. The contents of this report, supported and endorsed by
hundreds of MPs as members of this group, were ignored by government. From the
very day on which the appointment of Sir (now Lord) Morse was announced as head
of this review, there has been a consistent series of allegations broadcast and
published in the media that Morse was not an independent reviewer and that the
review itself, and the subsequent report, were both subject to interference by HM
Treasury and HMRC.
Any reasonable observer would conclude that the public interest is best served by
the full disclosure of the information requested, in order to establish the facts
around that controversial appointment. I - and tens of thousands of other UK
citizens - can see no basis on which HM Treasury could possibly disagree. It would
seem entirely sensible - and indeed reasonable to anyone who fully understands the
definition of independence - that HM Treasury should WANT to provide evidence
--- PDF page 23 ---
23
which helps to stem the ever-expanding flow of these allegations and which
confirms their position that this was a wholly impartial and independent review -
whereas continuing to withhold and refusing to disclose the evidence simply
confirms the opposite. It could not be any clearer, unless one remains blind to the
truth and committed to a cover-up.
Additionally, there are numerous elements within your response which require
challenge, clarity and a more detailed focus, which I will now seek to patiently
address.
On the premise that it was indeed Kemi Badenoch who provided the opinion - which
by now you will have confirmed either way - then the recorded information you hold
will include the full and unabridged text of her singular communication to that
effect. You could - had you helpfully chosen to do so - have simply provided that in
isolation and informed me that the remainder of this request (the submissions and/or
exchanges of opinion provided to the qualified person for consideration of that
request, plus the metadata held in any recorded form by the department which
relates to the entirety of my original request) was, in your opinion, subject to the
engagement of other exemptions as stated. Is there a particular reason for the
selective withholding of this eminent 'opinion' other than the fact it might be
considered as being of a much more significant benefit to HM Treasury than those
tens of thousands of UK citizens diligently attempting to establish the cold, hard
truth about the careful and strategic selection of Sir (now Lord) Morse as opposed to
an informed, knowledgeable, experienced - and properly independent - tax judge?
The first reference which HM Treasury made to the claimed engagement of section
36 was in the interim reply (to FOI2021/15854) dated 6th July 2021. This response
made the claim that section 36(2)(b)(ii) of the FOI Act applied as HM Treasury believe
disclosure would, or would be considered as likely, to inhibit the free and frank
exchanges of views of the purposes of deliberation. On that basis, you extended the
time for consideration of the public interest test using section 10(3). On 1st
September 2021, HM Treasury communicated that they considered that the
information requested also engaged additional sections 36(2)(b)(i) and 36(2)(c) -
having taken 61 full working days to come to that conclusion, well beyond the
guidelines laid out by the Information Commissioner's Office. It is notable - and once
again self-evident - that the cause of this excessive delay was HM Treasury's own
internal discussions and their concerted efforts to ensure that this information was
withheld at any cost and with no regard to, or respect for, the statutory timescales
laid out under the Freedom of Information Act.
You state that your search has identified a 'large number' of documents to consider,
but fail to give any indication, or a sensible and realistic estimate, as to the actual
volume concerned. Whilst it is understood that an authority cannot claim section 12
for the cost and effort associated with considering exemptions or redacting exempt
information, it may apply section 14(1) where it can make a case that the amount of
time required to review and prepare the information for disclosure would impose a
grossly oppressive burden on the organisation - which is what you are claiming in
this case.
The Information Commissioner's Office consider there to be a high threshold for
refusing a request on such grounds, meaning that an authority is most likely to have
a viable case where:
--- PDF page 24 ---
24
a) the requester has asked for a substantial volume of information AND
b) the authority has real concerns about potentially exempt information, which it will
be able to substantiate if asked to do so by the ICO AND
c) any potentially exempt information cannot easily be isolated because it is
scattered throughout the requested material.
In the event that a refusal should lead the requester to complain to the ICO, they
would expect the authority to provide them with clear evidence to substantiate its
claim that the request is grossly oppressive, with any requests which are referred to
the Commissioner being considered on the individual circumstances of each case. It
is reiterated by the ICO that "public authorities must keep in mind that meeting their
underlying commitment to transparency and openness may involve absorbing a
certain level of disruption and annoyance."
There are many other factors which would need to be duly considered should such a
complaint be escalated to the ICO (assessing purpose and value, considering
whether the purpose and value justifies the impact on the public authority, taking
into account context and history, etc.) but if possible and in the spirit of
compromise, I would like to help the authority avoid such an outcome.
Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021. On the
continued assumption that it was Kemi Badenoch who provided the opinion, then all
communications covering this request should be held within a single mailbox - unless
you are likely to inform me that there are other forms of recorded information on
other types of media which contain this data? Please kindly confirm - thank you.
With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021, which I respectfully calculate will indeed reduce the
burden on the authority, and enable you to publicly demonstrate your stated
commitment to transparency and openness - thank you.”
In response to your first question relating to HM Treasury’s qualified person in relation to
section 36 requests. We maintain that in no way was our response an attempt to be
‘misleading’. The Exchequer Secretary to the Treasury is our qualified person. However, to
be helpful we can confirm that in this case the qualified person was Kemi Badenoch MP.
Turning to your new request for information, we appreciated that you have attempted to
narrow the scope of your previous request. It might be helpful if we summarise your new
request for information:
“Whilst the request for the full and unabridged text of the qualified person's opinion
in the second point remains unchanged, I would be willing to narrow the scope
(date range) of my original request for the remainder of this second section. Please
--- PDF page 25 ---
25
therefore provide all recorded information, of any type or in any format, which
contains submissions (or exchanges of opinion) provided to the qualified person for
considering that request between 6th July 2021 and 1st September 2021.”
and
“With regard to the third point, which asked for all metadata held in any recorded
form by the department which relates to my original request (reference
FOI2021/09786), the subsequent request (FOI2021/15854), the next allocated
request (reference FOI2021/22729) and the internal review (reference
IR2021/25860), please restrict your search for metadata to dates between 7th June
2021 and 1st December 2021”
Your narrowed request remains very wide in scope. In order to comply with your request
we would need to review each document separately with a view to determining whether
any information was exempt from release, for example, due to sensitivities or personal
data, and to then redact any exempt material. The effort required to review, assess and
extract that information would be considerable and would require a disproportionate level
of staff effort.
We are aware that since 2020 you have made 10 FOI requests to HM Treasury in relation
to the 2019 Loan Charge. We would now like to draw your attention to provisions in the
FOI Act that are designed to protect the resources of public authorities in relation to the
burden of handling requests.
Section 14 is designed to protect public authorities by allowing them to refuse any
requests which have the potential to cause a disproportionate or unjustified level of
disruption, irritation or distress. The Information Commissioner recognises that dealing
with such requests can place a strain on resources and get in the way of delivering
mainstream services or answering legitimate requests.
Although section 14(1) is not subject to a traditional public interest test it was confirmed
by the Upper Tribunal in the Dransfield case (the Information Commissioner vs Devon
County Council & Dransfield [2012] UKUT440 (ACC), (28 January 2013) that it may be
appropriate to ask the question: “Does the request have a value or serious purpose in
terms of the objective public interest in the information sought?”
We have reviewed the impact of your recent FOI requests and consider that dealing with
these requests has resulted in an unjustified level of disruption. Considering all the factors
associated with your requests we do not find a serious purpose to outweigh this
detrimental impact.
Finally, the ICO provides that if a public authority has reason to believe that several
different requesters are acting in concert as part of a campaign that disrupts the
organisation by virtue of the sheer weight of the FOI requests being submitted then it may
take this into account when determining whether any of those requests are vexatious.
Your request is one of a number of similarly worded requests submitted via the
WhatDoTheyKnow website. We consider that the aggregated impact of dealing with these
requests has caused a disproportionate and unjustified level of disruption, irritation or
distress.
--- PDF page 26 ---
26
For the above reasons we are refusing your request under section 14(1) of the FOI Act.
We would ask you to also bear this in mind when considering making further FOI requests
as you should be aware that we may refuse a request if we consider it engages section
14(1).
We would encourage you to refer to the Information Commissioner’s guidance to
requesters which can be found online at:
https://ico.org.uk/for-the-public/official-information/
If you have any queries about this letter, please contact us. Please quote the reference
number above in any future communications.
Yours sincerely
Information Rights Unit
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--- PDF page 1 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
The Lord Morse KCB
House of Lords
London
SW1A 0PW
21st October 2021
Dear Lord Morse,
The Loan Charge Review in light of evidence not known at the time
We are writing to you – almost two years after the publication of your report on the Loan Charge
– to share evidence which has emerged since then that we believe should have been disclosed
at the time of your review. This compelling evidence, had it been known at the time, could
and indeed should have made a difference to your conclusions and therefore your
recommendations.
The purpose of this letter is to bring to your attention those facts which have now been
revealed, in addition to recently decided case law, all of which have a direct bearing on the
taxation of contractor loans.
It is also apparent that, despite the majority of your recommendations being accepted by the
Government at the time, there remain serious concerns from Parliamentarians about the
interpretation and implementation of those recommendations. Even more significant however,
is the further evidence which has emerged in the interim, but which was not publicly known
(and which may have been withheld from you during the course of the review), that clearly
renders your fundamental conclusion – that the law was clear from December 2010 –
both flawed and unsound.
It is well understood that the Terms of Reference laid out for the review by the Chancellor and
HM Treasury provided both a narrow scope and limited objectives to you as the reviewer, so it
is duly recognised that – beyond the specific remit you were granted - you could not make wider
recommendations. It is also acknowledged that the allocated timeframe for the review to take
evidence, and to properly scrutinise, examine and analyse that evidence before reporting to
Government was tight – given the complexity of this issue and the life-changing impact(s) faced
by those being targeted. Indeed, it was raised as a major concern following the announcement
of the review’s anticipated timeline by Government (as we are certain you will recall). With the
disclosure of further important evidence from many different quarters – including numerous
Freedom of Information requests – those concerns now seem even more well-founded than
they were at the time.
One of the main conclusions you reached was that the clearly retrospective nature of the Loan
Charge meant that it required serious deliberation and further scrutiny, and you have been
widely commended for concluding that the reach of this policy – setting its initial scope back to
1999 - was therefore unjustified. However, you did not recommend the total repeal of the
Charge (nor even the removal of its retrospective element).
--- PDF page 2 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
Instead, you concluded – a conclusion upon which many of the associated recommendations
relied – that ‘the Loan Charge should not apply to loans entered into by either individuals or
employers before 9 December 2010, being the point at which the law became clear’.
This conclusion however has always been queried by many informed commentators, due to the
fact (which was perhaps not shared as accurately as it should have been with you) that the
legislation announced in December 2010 only affected employees - there was nothing on the
statute book for another seven years suggesting they did not work for the self-employed. The
2011 legislation only applied to employer-employee loans paid from a third party. It did not
apply to self-employed arrangements or employed arrangements where no third party was
involved. This point was made by many experts, including the written evidence from tax
barrister Keith Gordon which stated:
“The legislation did change dramatically from the Finance Act 2011 (with the effective
date being 9 December 2010). Those changes introduced a convoluted set of rules
designed to ensure that funds transferred to third parties (e.g. trusts) on behalf of
employees would be taxed on the employees…promoters were, I understand, quick to
devise workarounds which were duly marketed to participants as compliant with the
law. This was not particularly difficult because the FA 2011 legislation presumed that
the workers would be employees; promoters tried therefore to tweak the arrangements
so that the contractors were self-employed…Most contractors would generally consider
themselves as self-employed – selling their own services to a series of clients. That is
exactly the issue as to the potential (but contentious) relevance of the IR35 legislation.”
Furthermore, the individuals who were being sold these schemes would have had no practical
way of knowing of the FA 2011 changes, let alone their potential relevance or bearing.
In summary, the law was clear for some arrangements, but was demonstrably neither
clear nor established for these self-employed arrangements. This is precisely why some
advisers (including Chartered Accountants) continued to recommend that people use (and in
some cases transfer to) arrangements that were not covered by the 2011 legislation. It is also
why the Government and HMRC sought to legislate and announced that they would do so in
2016, because they knew full well that the law was still NOT clear for those types of
arrangements that were not covered by the 2011 legislation. In fact, it was only in 2017 that
Parliament changed the law to ensure that the self-employed would be caught by the use of
loan-based schemes.
Thus, the law was manifestly (and more importantly, legally) not clear – and only finally
became clear and established by the Supreme Court in 2017 (with their decision crucially
determining that employers, not employees, are liable for any tax deemed to be due, something
which HMRC have admitted they cannot find any legal precedent to overturn). On this basis,
any conclusion to ‘fix’ the Loan Charge to this date in 2010 and then claiming 'it was clear that
these schemes did not work' is predicated on a misunderstanding of the legislation.
You will be aware of the clear and evidence-based report of the All-Party Parliamentary Loan
Charge Group (now the Loan Charge and Taxpayer Fairness Group) which explained why your
conclusion was unsound. Now, further to this, new evidence has emerged to demonstrate
beyond doubt that (a) the law was NOT clear for many arrangements that were entered
into - in good faith - on the basis of professional advice and (b) HMRC knew that the law
was not clear, hence them proposing the Loan Charge to the Treasury (something that is
--- PDF page 3 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
not publicly or widely known that they did), rather than it being proposed by Treasury
Ministers.
This letter deals with three overall issues:
(1) New evidence which further demonstrates that the conclusion that ‘the law was
clear’ from December 2010 is flawed and unsound
(2) HMRC interference in the choice of supposedly ‘independent’ advisers to your
Review
(3) Your recommendations are not being implemented as you envisaged
Taking each of these areas in turn:
1. New evidence which further demonstrates that the conclusion that ‘the law was clear’
from December 2010 is flawed and unsound
(a) The First Permanent Secretary and Chief Executive of HMRC admitted to colleagues
that he/they had “repeatedly tried to obtain legal analysis to understand the strength
of our claim with very little success” in relation to HMRC pursuing employees, as
opposed to employers.
A response to a Freedom of Information request has revealed the contents of emails shared
between senior officials at HMRC. On 31 January 2019, Jim Harra, First Permanent Secretary
and Chief Executive of HMRC wrote to senior colleagues and stated - “In recent months I have
repeatedly tried to obtain legal analysis to understand the strength of our claim with very little
success. For yesterday’s hearing we were initially given a summary of avoidance wins, some of
which seemed to have nothing to do with DR”.
This admission is clear and unambiguous (whatever deceitful attempts HMRC and the Treasury
may try to make in order to claim otherwise). It is a clear admission that HMRC cannot find legal
analysis to justify their claim (their ‘view’) that they can pursue individuals, as opposed to
employers, for schemes subject to the Loan Charge.
This fundamentally undermines the main conclusion of your Review’s report, which
claimed that ‘the law was always clear’ from December 2010.
The reality is that the law was not clear until the decision of the Supreme Court in 2017,
which of course is also why HMRC proposed the Loan Charge to the Government, who
introduced it to Parliament in 2016. They would not have done so, nor needed to do so, had the
law actually been clear from December 2010.
The Supreme Court judgment in the Glasgow Rangers’ case in 2017, which did - at last - make
the law clear, determined that employers were liable for any tax deemed to be avoided. This
decision did not give HMRC the right to directly pursue individual contractors. We now
know that HMRC have, internally and privately, tried to find legal justification for their actions
in doing so – and have found none.
When pressed on the legal basis for the Loan Charge, Jim Harra openly admitted to the House
of Lords Economic Affairs Committee - in a recent oral evidence session held on 15 July 2021 -
“I am not claiming that the law was always clear”.
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The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
Consequently, it really cannot be credibly stated any longer that ‘the law was clear from
December 2010’. This means that your recommendation that the Loan Charge should
retrospectively remain in place from that date is both flawed and unsound.
(b) HMRC have refused to share details of legal cases that they claim publicly justify the
Loan Charge and their right to pursue individuals
This specific matter of the legal basis for the Loan Charge and HMRC pursuing individuals was
raised – repeatedly – in the Loan Charge follow-up oral evidence session hosted by the
Economic Affairs Committee (as mentioned above). Mr. Harra’s response to the Committee was
that his email had been “overplayed”. He went on to state - “I have to speak frankly and honestly
to colleagues if I feel that we need to do better. Of course, I knew at the time that HMRC was clear
about its legal arguments for taxing DR scheme users”. Yet what he also knew at the time – but
failed to mention even once during the evidence session with the Economic Affairs Committee
– was the fact that other senior colleagues in HMRC had supplied him with a briefing document
for his appearance at a Treasury Select Committee hearing on 30 January 2019 – the very day
before he sent the email quoted above.
This briefing document was entitled 'Treasury Select Committee Hearing - The conduct of tax
enquiries and the resolution of tax disputes / Disguised Remuneration' and clearly forms the
basis of HMRC's justification for the Loan Charge, and quite obviously lists the cases, reasoning
and judges' comments which HMRC opine and believe validate their claim.
Looking at these dates, Mr. Harra plainly had this document long before the recent oral evidence
session with the Economic Affairs Committee, yet did not once make reference to it, despite
being asked several times and continuously pressed for answers on HMRC's supposed 'legal
basis' for the Loan Charge by various members of the Committee.
Following the sequence of emails already disclosed, another Freedom of Information request
was raised in an attempt to extract further evidence of the supposed legal basis which HMRC
(and Mr. Harra) contend is justification for the Loan Charge. The ensuing response from HMRC
was submitted for internal review after the aforementioned briefing document entitled
'Treasury Select Committee Hearing - The conduct of tax enquiries and the resolution of tax
disputes / Disguised Remuneration' and dated Wednesday 30 January 2019 was supplied - but
with every single entry redacted. HMRC have since refused to disclose an unredacted version,
so this will now be escalated as a complaint to the Information Commissioner’s Office.
From the emails imparted alongside this fully redacted document, it was obviously intended to
provide Mr. Harra with “the legal cases HMRC can point to demonstrate the schemes never
worked” and the sub-heading on this document clearly reads 'Tax Avoidance - Examples of
litigation cases which demonstrate tax avoidance schemes didn't work'. The internal review
request was submitted to challenge the wholesale redaction and HMRC's misuse of certain
'exemptions' available under the Freedom of Information Act. They duly dismissed both.
The non-disclosure of the content of this document is of great significance to all those affected
by the Loan Charge - if HMRC have complete confidence in their claim, then surely the legal
cases which supposedly underpin, support and justify HMRC's pursuit of those people must be
declared for all to see? Why would HMRC even wish to withhold evidence of this kind – unless
it perhaps instead undermines and invalidates their public position? Was this document shared
with you during the course of the Loan Charge review?
--- PDF page 5 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
It is impossible not to deduce that the list of cases has been redacted because (as inferred
by Jim Harra’s comment in the original email - “some of which seemed to have nothing
to do with DR”) they do not provide a legal precedent for HMRC to pursue individuals.
All interested MPs and peers need to see this information – in the form of a fully unredacted
version. This will allow the listed cases to be reviewed and analysed by tax experts, and to help
determine whether this supposed claim has any proper or legal foundation.
(c) HMRC came up with the idea of the Loan Charge - not the Treasury - and they admit
privately that they did so in order to stop people having the right to defend
themselves in court
As referred to earlier, yet another Freedom of Information request sought evidence of whether
it was HMRC themselves or the Government who originally devised the Loan Charge. The
submission also sought to establish when the idea was first discussed and tabled, when the
Government agreed to introduce the policy and when HMRC first started working on the
legislation.
The APPG’s recent letter to the Prime Minister and the Chancellor has already confirmed (based
on the above FOI response) that HMRC developed the idea of the Loan Charge and proposed it
in advice to Treasury ministers in September 2015.
It is also now demonstrated, through statements in internal communications, that HMRC
proposed the Loan Charge as they had failed to win court cases allowing them to pursue
individuals and that loans were income. As a result of this lack of success in the courts, HMRC
began instructing the Office of Parliamentary Counsel to prepare legislation in October 2015.
The response to another Freedom of Information request supplied a copy of the guidance
document produced by HMRC on 12 July 2019 for the Financial Secretary to the Treasury (Jesse
Norman) entitled ‘LOAN CHARGE AND POWERS AND SAFEGUARDS ANNOUNCEMENTS – FOR
DECISION’, alongside the minutes of a meeting between HMRC and the FST which was
subsequently held on 15 July 2019.
HMRC’s comments in this document state “we would still be open to the accusation that we are
denying scheme users their chance to have their case decided by a court. We would need to make
clear that this is a deliberate choice as we are confident of winning the vast majority of cases and
litigating all cases is not in the wider public interest.” However, this confidence is clearly
misplaced, as shown by the recent result in the Hoey case, as well as the other cases that HMRC
have previously failed to win.
The key point, however, is that for HMRC to simply concoct a proposed law to ensure they can
demand legally unproven tax without allowing people the right to defend themselves in court
is deeply sinister – and an absolute affront to the rule of law.
The response to another Freedom of Information request on 16 July 2021 includes an
admission within HMRC that first of all, the Loan Charge not only takes away the right to
challenge HMRC’s ‘view’ in court, but also makes it clear that the Loan Charge was specifically
designed to tax people, whether or not tax was actually due.
In the ‘Safeguards’ section of the disclosed document, it states - “One particular criticism of the
Loan Charge is that it is not giving those involved the chance to test in the Courts whether tax
is really due on their particular loan. This is correct to the extent that the Loan Charge is
--- PDF page 6 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
deliberately designed to bring into tax the loans made under the scheme, whether or not a tax
charge arose at the time the scheme was used. However, HMRC’s view is that a tax charge did
arise at the time the loans were made.”
This is a clear acknowledgement by HMRC that the Loan Charge effectively ensures that HMRC’s
‘views’ about a historical tax charge are now enshrined as a future and unchallengeable tax
liability – whether or not tax was actually due. Once again, the exact opposite of the rhetoric
from HMRC and from Ministers, who have given the false impression that ‘tax was always due’.
The truth as to why HMRC proposed the Loan Charge is clear – to avoid the bother of going to
court and the risk they would lose more cases, having lost several key cases (including Rangers
until they changed their argument in the Supreme Court). Jon Thompson, ex-CEO of HMRC, in a
letter to the then MP Stephen Lloyd (as evidenced in the Loan Charge APPG report dated April
2019) made it clear that the Loan Charge would do away with any need for litigation – in effect,
stating that as they had lost so consistently with their previous challenges under existing tax
laws, they wanted something that would bypass and circumvent the whole process. In this
letter, he states “The Loan Charge has also supported our efforts to settle DR cases without
the need to litigate”.
What he actually means here is that the introduction of this legislation removes standard, long-
established taxpayer protections and ensures that a legally unproven ‘debt’ is laid at the feet of
victims whilst denying them any access to a tax tribunal or court. With now approximately
161,000 open cases (as at end of March 2021) outstanding, the Loan Charge has done nothing
to ‘draw a line under usage of these schemes’, which – as you made clear in your own report -
was the stated objective of the Loan Charge when introduced.
The reality now is that there are still thousands of people who face the Loan Charge (and
thousands who still face ongoing uncertainty due to having open enquiries), whilst many others
have been pressured into paying unreasonably large and disproportionate settlements. Even
many of those who were freed from facing the Loan Charge due to your halving the period of
retrospection from 20 years to 10 years have not been refunded by HMRC. Alas, other than for
a small minority of people who had not made voluntary payments to HMRC for loans no longer
caught by the Loan Charge legislation, the nightmare of the Loan Charge continues.
What is crucial in relation to your Review is that the Loan Charge was tabled in draft form before
the Rangers ruling in the Supreme Court – it was subsequently removed as there was a general
election in June 2017. The Supreme Court decision which followed in July 2017 was a hugely
inconvenient win for HMRC, as it placed the PAYE liability firmly on the employer.
(Contractor loans, as consistent with lower tiers and previous tribunals, were not deemeed to
be taxable –an argument that HMRC had consistently tried and failed to win). The Loan Charge
was then redrafted with a retroactive effect that transferred the liability on to the
individuals, thus working round the Rangers decision and making the loans taxable.
(d) HMRC have admitted and sought to cover up the fact that they know that agencies
were liable for the tax in many cases – and a court case decided that they couldn’t
instead pursue contractors retrospectively
PAYE (Pay As You Earn) legislation means that employers are obliged to collect income tax and
National Insurance from employees (and HMRC are obliged to ensure this) – however, in the
case of those accused of using ‘disguised remuneration’ schemes, this did not happen. In many
instances, the PAYE obligation fell on those agencies engaging and hiring out contractors, yet
HMRC failed to enforce this – and instead have now pursued the contractors.
--- PDF page 7 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
PAYE legislation, where it applies, is generally mandatory. The person classed as the employer
has to deduct PAYE. One such person classed as an employer is ‘an agency’ which arranges a
post for a worker in circumstances where the worker, if directly engaged, would be an
employee. The agency has to operate PAYE and pay NIC. The legislation is in s.44 of the Income
Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
It may be asked why agencies have not been subjected to claims for PAYE where contractors
are involved. It has been held that where the agency is UK based, s.44 takes precedence over
other charges (Lancashire & Ors v HMRC [2020] UKFTT 407). Aware of this point, HMRC has
attempted to use s.684(7A) ITEPA to disapply the PAYE legislation in contractors’ cases.
It is assumed you were unaware of these facts, as they are not referred to within your report.
An Upper Tribunal decision Stephen Hoey v The Commissioners for HM Revenue and Customs
[2021] UKUT 82 (TCC) (discussed further below) has held this to be ineffective where the
discretion to disapply PAYE is after the event, that is, after the agency has paid out. Thus, the
agent remains liable to operate PAYE. Even if it fails to do so, the contractor has a tax
credit which franks any Loan Charge tax.
It would appear that HMRC were already aware of the risk that s.684(7A) would not work in
the way they hoped. HMRC’s novel (and now judicially-criticised) use of s684(7A) ITEPA 2003
has since been the subject of a Freedom of Information request. In the response, emails released
indicate that HMRC’s ‘Contentious Issues Panel’ was required to approve the use of this
discretion in relation to some users of contractor loans tax avoidance schemes, precisely so that
HMRC could then collect tax directly from contractors. It was also confirmed in those emails
that this ‘discretion’ had only previously been used prospectively (so as to take an employer
outside the need to operate PAYE) and had not previously been used to remove a PAYE liability
which had already arisen.
When identifying the potential issues and risks associated with this unique (and first ever) use
of this newfound ‘discretion’, HMRC officials warned Mr. Harra that “it is highly likely we will be
challenged on our use of the discretion in contractor loans cases”. An HMRC Press Office briefing,
supplied as an attachment to these emails, contains further lines which confirm the position
previously explained with those providers, agencies and suppliers which partner with HMRC
to provide contract and freelance workers. The second of these ‘lines’ states – “Where a
contractor loans avoidance scheme involves an employer who is offshore, the end user of the
contractor’s services could be liable for tax in line with the PAYE regulations”. A notable and
significant comment has been applied to this ‘line’, saying “do we need to mention that since
2014, some agencies might be liable?”.
The ‘lines’ continue – “Agencies and end users of services should be aware that they could be liable
for tax and National Insurance contributions where they engage contractors who have used
avoidance schemes. Agencies and end users of services are advised to review their procedures and
ensure due diligence checks are carried out as appropriate”. The comment adjacent to this entry
simply states “do we want to say this?”. Other comments remain redacted, so it is quite clear
that HMRC wish to withhold further important evidence on this subject, knowing that they are
end users of these services themselves!
Whilst HMRC do have a discretion that allows them to relieve employers of the strict PAYE
obligations (and then demand the tax from the employee, the contractor), this is only in certain
circumstances, most of which contain a right of appeal by the employee to the Tribunal
--- PDF page 8 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
(specifically because of the retrospective effect of such discretion being exercised). There is one
provision found in section 684(7A)(b) of the Income Tax (Earnings and Pensions) Act 2003
where no such appeal right exists. However, most tax professionals consider that that
discretion (which was introduced by the Finance Act 2003) was designed to prevent certain
employers (for example overseas countries’ embassies who engaged UK-resident staff) from
having to operate PAYE and not to forgive previous non-compliance; hence, there is no need for
a statutory right of appeal by the employee. Yet, HMRC have since started to deploy it as a
further weapon to use against contractors, by asserting that it can be used in their cases, so as
to allow historical PAYE that should have been paid by the employer to be demanded from the
employee - when that is clearly not the intention of the ‘discretion’ and yet another case of
HMRC wrongly interpreting the rules to suit themselves.
Accordingly, HMRC’s ‘view’ has been rejected in (Hoey v HMRC [2021] UKUT 0082), which
made it clear that HMRC do not have the discretion to remove these strict PAYE
obligations retrospectively. It is understood that the case is now being taken to the Court of
Appeal on 28 March 2022. However, most tax professionals consider that the Upper Tribunal
was completely right on this particular point. Indeed, when the contrary view was taken by the
First-tier Tribunal, former Inspector of Taxes and now-retired Tribunal Judge Richard Thomas,
wrote an excoriating article in the British Tax Review making it clear that HMRC had wrongly
exercised their powers under section 684(7A)(b) in that case: ‘Stephen Hoey v HMRC and Philip
Higgs and others v HMRC: section 684(7A) ITEPA - a load of Hoey?’.
What is abundantly clear from these revelations is that, despite claiming publicly that
they always pursue employers, in actual fact HMRC failed to pursue agencies, who were
classed as employers - and indeed deliberately chose not to do so - but instead took the
easier option of making the contractors liable.
(e) HMRC themselves engaged contractors using schemes (and signed off their tax
returns) despite claiming they ‘were always clear’ these schemes were unacceptable
Since your Review was conducted and the report published, Freedom of Information requests
have exposed the fact that HMRC themselves used contractors. The Loan Charge APPG
published a report on this and the links to the various FOI requests and responses are contained
within.
In October 2020, HMRC finally acknowledged that they did use contractors using DR schemes,
having previously evaded numerous questions on the subject, including from the House of
Lords Economic Affairs (EAC) Finance Bill Sub-Committee. As a result of those FOI requests
and responses, it is now known that:
• In November 2018, over a year before you published your report, HMRC discovered that
five contractors had been identified as having a history of using DR schemes and that one of
those five was still engaged by HMRC at the time. This was not shared with the Economic
Affairs Committee, despite corresponding on this very matter at this same time.
• HMRC conducted further analysis in November 2019 which found that HMRC (and RCDTS)
had indeed used contractors who were using DR schemes concurrent with the provision of
their services to the department. Once again, HMRC failed to inform the EAC/Sub-
Committee. From the wording of emails, it appears that a decision was taken within HMRC
to withhold this information, because HMRC knew it was ‘sensitive’ - i.e., that it was
embarrassing to HMRC.
--- PDF page 9 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
Clearly, this is key information and the fear is that, as well as withholding this information from
the EAC, HMRC may also have withheld this information from you.
Were you informed about this analysis during your review into the Loan Charge?
HMRC have continually given the false impression that they ‘were always clear’ that these
schemes ‘did not work’ and that they communicated this effectively, thus warning people of any
perceived risk. Yet the fact that HMRC itself was using contractors who were using such
arrangements – and were signing off their tax returns – exposes this as simply not the case.
Although there were fifteen contractors identified in this instance, there are known to have
been many more than this number, as what HMRC terms ‘service contractors’ – those working
via a third-party provider (such as Capgemini and Fujitsu) - often used these arrangements.
If HMRC themselves were using contractors using these arrangements, and doing so well after
December 2010 – in fact, right up until July 2020 - it is simply not credible to argue that the law
was clear (when legally, it was not - until the Supreme Court ruling in 2017) or that HMRC were
‘clear’ in their communications.
With these five key revelations – none of which were publicly known at the time you
conducted your review – it is apparent that the primary conclusion of your report must
be revisited.
2. HMRC interference in the choice of supposedly ‘independent’ advisers to your Review
It is also apparent that there remain deep and serious concerns about the independence of the
appointment process for advisers to the Loan Charge Review. Keith Gordon told the Economic
Affairs Finance Bill Sub-Committee that the Government:
“strongly counselled against [the Morse Review] taking anyone who had given advice to a
parliamentary committee because, to use the words in the Treasury email, they were
compromised”.
When challenged on this during the evidence session, HMRC’s Mary Aiston asserted that:
“it was [Sir Amyas Morse’s] ask that they were people who had not had a public position in
relation to the Loan Charge. I would agree that being a witness at a committee hearing
should not per se exclude people from getting involved in an independent review”.
However, email disclosures from a separate Freedom of Information request clearly
demonstrate that a Government official had in fact expressed reservations about the
appointment of individuals who had appeared before a Select Committee. It is also readily
apparent that other advisers duly appointed and engaged by the review had previously
expressed views on the Loan Charge or disguised remuneration schemes in the past, thereby
contradicting Mary Aiston’s statement that people who had taken a public view on the Loan
Charge were excluded from such advisory roles. Indeed, one such appointee worked within
HMRC alongside officers who were responsible for the introduction of the FA 2011 legislation.
We would therefore request that you clarify the position on these appointments and offer an
explanation as to why Keith Gordon was initially identified as a potential adviser, and then
inexplicably removed from the list of appointees. It would be helpful if Keith could be afforded
an opportunity to speak with you directly on this matter (and the many others contained within
this letter) at your earliest convenience. Indeed, we understand that Keith’s prime concern is
--- PDF page 10 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
that the appointees would simply not have been aware of how the promoters adjusted the
structure of the schemes after 2010 and therefore that you would have been left with the
understandable (but incorrect) view that the law was ‘clear’ at that time.
3. Your recommendations are not being implemented as you envisaged
Moving on to the series of recommendations you made (in addition to the one already covered
at the start of this letter), it is apparent that a number of these are not being treated in the ‘spirit’
you clearly intended and some are not being implemented in the way you intended at all.
On 22 January 2021, the House of Lords Economic Affairs Finance Bill Sub-Committee wrote a
letter to Jesse Norman regarding their follow-up inquiry into the Loan Charge and confirming
that they had looked at this subject in further detail.
As an example, you recommended that taxpayers who made reasonable disclosure of their
scheme usage, but for whom the relevant year was unprotected, should not have that
Unprotected Year included in the scope of the Loan Charge. What the Government did here was
to alter the defined ‘reasonable disclosure’ to in effect mean ‘full disclosure’ - when ‘reasonable
disclosure’ should mean that people did what was required at the time, not what HMRC would
like to now say they should have done in hindsight.
Similarly, HMRC have arbitrarily determined that if they were within the time frames to issue
an enquiry, but hadn’t actually done so to protect the year, then this also does not qualify.
Therefore, taxpayers who volunteered the information out of threat of the Loan Charge - but
whom HMRC had not previously contacted and who are no longer impacted by the Loan Charge
- remain subject to the contract settlement, contrary to your recommendation.
This is yet more retrospective rewriting of the rules – the evidence of Keith Gordon, barrister,
to the Committee is quoted in the aforementioned letter as stating:
“…the statutory wording will not help taxpayers who had been taken out of self-assessment
by HMRC, nor where disclosure was made in other forms; nor even where HMRC were given
details of a DOTAS Scheme Reference Number on a taxpayer’s tax return”.
Also quoted in the letter is evidence from Glyn Fullelove, Immediate Past President of the
Chartered Institute of Taxation:
“More discussion may be needed with HMRC about the interpretation of [reasonable]
disclosure. HMRC may currently feel bound by certain precedent and think that it cannot
relax the meaning of the term further”.
As far as we are aware, very few people (if any at all) have been a beneficiary of this
recommendation.
Also, where taxpayers had made ‘voluntary restitution’ payments for liabilities which were
subsequently excluded from the scope of the Loan Charge, you rightly proposed – and the
Government accepted – that HMRC should repay this money to taxpayers. However, the report
on implementation said that no refunds of such ‘voluntary restitution’ payments had been made
at the time of writing. HMRC estimated that around 1,000 individuals and 1,000 employers
would be eligible to receive either a refund or a ‘waiver of tax’ and (according to Mary Aiston’s
evidence at the EAC session on 15 July) of the claims received thus far via the process
implemented to enable those refunds (which was on an exclusively ‘application-only’ basis),
--- PDF page 11 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
HMRC had only paid out 200 – with (apparently) the ‘vast majority to be completed by the end
of the calendar year’. We understand that the latest figure released via FOI is now around 440.
There was also a deadline (30 September 2021) for applying – for any application that had been
made in time, HMRC would supposedly advise if it had been accepted or rejected and would
specify the refund value its officials have calculated. If any applicant disagrees with this
decision, then he/she is able to ask for a review – however, there is no right of appeal against
the outcome of that review. Would that be considered as ‘in the spirit of the recommendation’?
Another potential (but perhaps deliberate) ‘catch’ by HMRC which is causing difficulty is that
the tax authority will only accept an application for repayment from the person or entity that
was party to the original settlement. This means that where the settlement was executed by a
company that no longer exists, it will first need to be restored to the Companies House register,
which may involve getting a court order at some considerable expense. Again, the ‘high bar’
being set for what should be straightforward refunds is preventing individuals from receiving
rightful restitution – is that really what you intended?
Your recommendation that ‘affected taxpayers should be able to choose to unstack their
outstanding loan balance, and elect to spread their balance over three years’ has also
encountered impediments and has failed to meet expectations. The Low-Income Tax Reform
Group’s Meredith McCammond stated in her evidence to the Economic Affairs Committee (also
quoted in the letter to Jesse Norman):
“I think HMRC envisaged about 21,000 people might benefit from making the spreading
election but actually less than 2,000 [did]”.
She went on to call the numbers “disturbing”. She concluded:
“There’s something not right. First, the form is online, and the paper version is quite tricky
to get hold of. But [secondly either] form asks you a whole raft of other questions. And the
people we represent just don’t have enough information or insight about their situation to
be able to complete that form, and so because they can’t complete the form, they can’t make
the election. There’s also the problem that HMRC made the election ‘irrevocable’ and that
[term is] going to really scare you”.
We would ask again – is that what you intended and do you consider this to be ‘in the spirit of
the recommendation’? Considering how HMRC have interpreted this recommendation and the
outcomes now produced as a direct consequence of that interpretation, it seems clearly not.
Overall, it is evident that HMRC have not implemented your recommendations as you
intended, which is unacceptable, if alas entirely expected. As a result, this whole issue
must be looked at again in order to rectify this situation.
A fair resolution is urgently needed
All the evidence presented in this letter and taken together means that regrettably, your review
has failed to deliver what you intended and has most certainly not resolved the Loan Charge
issue and the scandal associated with it.
Based on the disclosure of all this evidence, some of which was clearly withheld at the time of
the review, your key conclusion - that ‘the law was clear from 9 December 2010’ cannot now
be reasonably justified or defended.
--- PDF page 12 ---
The Loan Charge Action Group, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ United Kingdom
Loan Charge Action Group Ltd Company number 11311414 Registered in England and Wales
We therefore urge you to now make a public call to revisit this issue - knowing how many
lives depend on it, knowing how many people are on the verge of mental breakdown and
knowing that it is likely there will be more suicides if HMRC enforce the Loan Charge as
it stands.
There has been a constant - and ever-growing cross-party opposition to both the Government’s
handling of the Loan Charge ‘debacle’ (to repeat the phrase Jim Harra used in internal emails)
and also serious concern about the unacceptable behaviour and attitude of HMRC themselves,
with support for victims from across the House expanding on an almost daily basis as more MPs
and peers finally start to understand the facts and evidence already available, alongside that
which continues to materialise through the submission of FOI requests.
142 Parliamentarians have now also signed an open letter to the Prime Minister and the
Chancellor, that refers to some of these revelations and the new evidence which has emerged
since your review, calling on them to revisit the subject and to come up with a fair resolution to
the whole issue (which is essentially what you tried to call for). It would show great courage if
you would also sign this letter – as a Parliamentarian yourself - and back the urgent calls for a
further look at all these concerns, before yet more lives are ruined.
The Loan Charge – and the devastating consequences if it is now enforced - remains a
serious problem which is not going away for the Government – as the amplified nature
of the debate undoubtedly proves. You have been publicly quoted as saying "citizens pay the
price for politicians’ bravado". That can also be applied to the bravado – and sheer dishonesty
– of those within HMRC who have misrepresented the Loan Charge, misrepresented the
veracity of its legal basis and misrepresented the inevitable reality of its disastrous impact.
There remain tens of thousands of citizens whose Loan Charge nightmare has not changed one
iota as a result of your review.
Whilst we believe that you acted with the best of intentions, and with the information you had
available at the time, we strongly urge you now - as a Parliamentarian - to have the courage to
say that the Loan Charge must be looked at again and a resolution urgently found that,
reasonably and fairly, finally ends this ongoing nightmare for many thousands of UK families.
Yours sincerely,
Steve Packham
Andrew Earnshaw
Spokesman & Executive Director
Executive Director
On behalf of the Loan Charge Action Group
Cc
The Loan Charge and Taxpayers APPG
All members of the House of Lords Economic Affairs Committee
All members of the House of Commons Treasury Select Committee
James Murray MP, Shadow Financial Secretary (Treasury)