Correspondence & Enquiry Unit
1 Horse Guards Road
[redacted under section 40(2) of the FOI Act]
7 December 2020
Our reference: TO2020/42742
Dear [redacted under section 40(2) of the FOI Act],
Thank you for your letter of 23 September 2020 entitled “Review into the April 2019 Loan
Charge – Request for Reconsideration”. Please accept our apologies for the delayed
In your letter you raise a number of concerns about the independence of the review of the
Loan Charge policy led by Sir Amyas Morse (“the Review”). You cite the Al -Party
Parliamentary Group’s report from June 2020 (“the APPG Report”) as evidence of the
Review’s lack of independence. You assert that HMT must ask Sir Amyas to consider the
APPG Report and make any amendments or addendums to his report that he considers
appropriate in the light of it.
We would like to assure you that the Review was robust and independent. Sir Amyas was
formerly the Comptroller and Auditor General of the National Audit Office for ten years
and, as such, has a strong record of holding the Government to account.
Moreover, Sir Amyas had full discretion over how the Review was run, which stakeholders
he engaged, and the recommendations he made. Sir Amyas rigorously ensured the
independence of his report and has rejected the suggestion of Government interference
made in the APPG Report in the strongest of terms. This is clear from the statement he
issued when the APPG Report was published, which stated as follows:
My independent review of the Loan Charge represented my own judgement
following the evidence that I heard – including over 700 individual impact
statements. My 20 recommendations included the need for both significant changes
to the Loan Charge, and to HMRC’s future approach for combatting tax avoidance.
My conclusions speak for themselves, and show that I was independent of
government. Any suggestion that I was (or could have been) unduly influenced by
the civil servants who supported me ignores that the report is my own, and my ten
years of experience at the National Audit Office in holding government to account.
It is also worth noting that the Review led to significant changes to the Loan Charge policy.
The Government accepted all but one of the 20 recommendations made in the Review, and
HMRC estimates that more than 30,000 people wil benefit and an estimated 11,000 wil
be taken out of scope of the Loan Charge altogether. These changes wil have an Exchequer
cost of £745m.
We have addressed the specific concerns raised in your letter in more detail below.
You suggest the scope and objectives of the Review were narrowly defined so as to limit the
potential for far-reaching recommendations to be made. It is standard practice, when
setting up an independent review into Government policy, for the terms of reference to be
agreed between the review’s chair and the commissioning department. This does not mean
that the terms of reference were designed to limit the scope of the Review’s potential
recommendations; rather, their purpose was to ensure that the Review was appropriately
targeted at the issues most in need of being addressed. The terms of reference did not
curtail the Review’s independence; Sir Amyas had full discretion to set the terms of
reference as he deemed appropriate and more broadly to determine how the Review was
run, the stakeholders he engaged and the content of his report. Moreover, he had extensive
scope to consider whether the Loan Charge was an appropriate policy response and to
make wide-ranging recommendations for its reform, which he did in his report.
You also make a series of claims about the independence of the Review relating to the
composition of the secretariat and the collaboration between the secretariat and
HMT/HMRC. In particular, you assert that (i) the Review lacked independence as a result of
the fact that the secretariat was comprised of secondees from HMT and HMRC, (ii) HMT
and HMRC sought to improperly influence the Review, including by seeking to influence the
choice of experts, (ii ) the secretariat had an improperly close relationship with HMT and
HMRC staff, (iv) there was inappropriate collaboration between the secretariat and the
Chancel or’s Press Secretary, and (v) there were improper communications between the
secretariat and HMRC in preparing answers for the Treasury Select Committee (“the TSC”).
Responding to each of these concerns in turn:
(i) It is usual practice for staff from a commissioning department to be seconded to
the secretariat of independent reviews in order to provide support to the review
and expertise in the particular policy area. The secondees were al civil servants
bound by the Civil Service Code and expected to carry out their roles in line with
the core values of integrity, honesty, impartiality and objectivity; as such, the
secondees had a clear remit to support Sir Amyas in the conduct of the Review.
(ii) HMT and HMRC did not seek to improperly influence the Review. Sir Amyas had full
control over the Review’s management and recommendations, and received
evidence from a range of external experts and stakeholders, including individuals
affected. Sir Amyas also chose to conduct a call for evidence, which led to over 700
impact statements and testimonies being received, as well as meeting on multiple
occasions with many individuals affected by the Loan Charge, their family and their
(ii ) The secretariat did not have improperly close relationship with HMT and HMRC
staff. Friendly exchanges between members of the secretariat and HMT or HMRC
staff is not evidence that those departments somehow had undue influence over
the conduct of the Review.
(iv) While it is true that there was a degree of collaboration between the Chancel or’s
Press Secretary and the secretariat, this was intended to ensure that there was
consistency in communications regarding matters such as the progress of the
Review and the nature of its recommendations. This does not call into question the
independence of the Review.
(v) Further, exchanges between the secretariat and HMRC staff to ensure the accuracy
of statements to the TSC are not evidence of improper communications; rather, it is
civil servants’ duty to ensure evidence presented to TSC is correct, in order for the
TSC to fulfil its role in examining the expenditure, administration and policy of HMT
Finally, you state that the fact that HMT and HMRC were afforded privileged access to the
Review’s conclusions is evidence that the Review was not independent. HMT and HMRC
were allowed to review Sir Amyas’s report prior to publication in order to give them the
opportunity to correct any factual errors or misinterpretations, which is normal procedure
for independent reviews. This did not enable either department to influence the Review’s
findings and recommendations, and the final decisions on what, if any, changes were made
to the report as a result of concerns raised by HMT and HMRC rested with Sir Amyas.
For the reasons set out above, we do not consider it necessary to ask Sir Amyas to
reconsider his findings and recommendations in the light of the APPG Report.
We hope this letter wil reassure you and your clients that the Review was conducted
independently of any form of Government interference and that its recommendations are
the product of a robust and independent process.