St Albans MP forces review of Loan Charge which has driven people to ‘suicidal thoughts’
- Credit: Archant
St Albans MP Anne Main has forced a review of a retrospective tax which has driven people to have ‘suicidal thoughts’.
For the past 20 years, contractors and self-employed people were loaned money on terms which meant it was unlikely to be repaid, rather than being paid directly.
These loans were not subject to income tax or National Insurance - until the Government decided to recoup the lost tax income in 2017 through the Loan Charge, landing thousands of people with an additional tax bill.
During a debate on last year’s Budget measures, Mrs Main said: “I have serious concerns about the retrospective nature of the tax being collected.
“Several of my constituents were advised to use the scheme as a way of keeping more of their own money.
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“It is worth remembering these people are not employees. They take on more risk, with no sick pay, maternity pay or other forms of support offered to an employee.”
She targeted Her Majesty’s Revenue and Customs (HMRC) for how it handled these cases, saying: “I have constituents who say HMRC was made aware of these arrangements, but no objection was raised until many years later. That has to be fundamentally wrong.
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“One of my constituents, who worked as an IT professional in the FinTech industries, is being pursued for £900,000 by HMRC for the loan charge.
“This has put him and his family under considerable stress. He had been advised that what he had done was lawful and he considered it to be so.
“He told me, worryingly, that he tried to settle the case with HMRC for about £700,000, but that had been rejected.
“Many people who find themselves in tax difficulties manage to make negotiated settlements with HMRC.
“It appears that this particular group of people are being treated very unfairly and are being left in the very difficult situation of not knowing exactly how much they owe or how quickly they have to pay.
“The huge pressure and distress – even suicidal thoughts – that this measure has put in people’s minds is totally unacceptable.”
Mrs Main tabled an amendment to the Finance Bill, which is used to put the Budget into law, which would force the Treasury to review the Loan Charge.
The amendment was accepted by the Government and ministers will report to the Commons on the review by March 30, before the charge comes into force in April.