Loan Charge debate gets muted response from government

An impassioned debate last Thursday [18 January 2024] about the Loan Charge and Tax Fairness in the House of Commons led to little reaction from the finance secretary to the Treasury, Nigel Huddleston.

Huddleston told the participants at the end: “I do not believe a case has been made for another review.”

Led by Sammy Wilson, MP for East Antrim, the debate featured high-profile speakers such as Sir Jacob Rees-Mogg, Sir Iain Duncan-Smith, Sir David Davis, and a number of others who called for another review of the Loan Change and its effects on as many as 60-70,000 people who unwittingly paid their earnings into uncompliant payroll schemes. The Morse Review in 2019 was not sufficiently independent, MPs argued, and “cannot be the final word”, said Darren Jones, MP for Bristol NW.

Ten suicides have resulted from the pressures of the Loan Charge, MPs argued, along with more than 20 self-harm and attempted suicide incidents. Jim Shannon, MP for Strangford described the thousands of victims of HM Revenue & Customs’ (HMRC) pursuit of repayments as “with the greatest respect, the ‘little people’ – people who accept the systems that we put down before them. There must be a way to help them”. 

Many speakers focused on HMRC’s lack of accountability to government, operating with lack of oversight, saying: “It does not provide public accounts, and ministers come and go but they do not really run that dept. That really is the issue.” 

Comparisons were drawn with the ongoing Post Office scandal and the effects on sub-postmasters, highlighted in a recent ITV TV series. One MP commented that the Loan Charge situation could lead to its “own TV drama”.

After Huddleston rejected the requests for another hearing, Wilson said: “I think it is the duty of the minister and the duty of Parliament to hold those who have this power to account and to make sure that it does not continue to be abused.”

Those attending the debate accepted the question put and resolved the following:

“That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes; further notes that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of HM Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the Government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act.”

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