1 March 2024
Loan Charge Action March 2024
On the 31st December 2020, a Part 8 claim was lodged at the High Court on behalf of 55 claimants. Under this claim, which is drafted by Setu Kamal, a declaration was sought from the High Court on behalf of the various extant claimants to the effect that the Loan Charge and the Disguised Remuneration rules more generally be interpreted in a way which conforms with the laws of the European Union and the Human Rights Act 1998 and therefore be set aside. 300 other clients joined the action in 2021.
Update of July 2022
The 2021 claims have been stayed (or ‘paused’) behind the 2020 claims, given that their outcome may be determined or affected by a decision reached in relation to those earlier claims. So, the following relates to the 2020 claims alone.
HMRC sought to strikeout the claims made in 2020. Following a two-day hearing, the High Court, in November 2021, refused to strikeout them out: Donatas Labeikis [2021] EWHC 3237 (QB). However, it did stay them and direct that in the meantime, the claimants make an application for JR (Admin Division). This was done in February 2022.
In July 2022, the Admin Division refused permission for the JR to proceed. Setu applied for reconsideration and the hearing shall be on the 19th January 2023. Setu is reasonably confident that once he has had the chance to re-visit EU law principles with the judge over a hearing, permission shall be granted.
One consequence of the requirement for another hearing is that the determination of the matter shall have been delayed by at least a few months. However, if, by the time the main hearing occurs, an individual appeal in relation to any Loan Charge assessment comes to be heard before a tax tribunal, then Setu’s arguments shall be raised there too, insofar as there is a commonality between them (which there is for a large part).
Update of December 2022
Setu has applied to the court asking that the hearing on the 19th of January 2023 be held remotely, so that all interested parties may have an audience. The court has yet to reach a decision on this.
Update of March 2024
Whilst the legal proceedings continue, the standard time limit for the making of assessments has expired in April 2023. Setu is of the view that HMRC are unlikely to successfully assess going forward in light of this.
Total number of the 350 clients assessed within the time limit: 1
Total number of tax paid by clients till date: 0
Total amount of expenses incurred by clients till date: 0
