Frontline NHS staff are still facing the 'devastating' loan charge - Greg Wright

The last thing they need is financial anguish when they return home.

However, a number of locum nurses, care workers, hospital cleaners and surgeons are still facing significant financial pressures due to the loan charge.

Over the last week, I have been contacted by health professionals who are extremely worried about the charge.

Last year, a review led by Sir Amyas Morse made a series of recommendations about the design of the loan charge and its impact on those in its scope.

The review found that the loan charge should remain in place, that disguised remuneration schemes are a form of tax avoidance and that it was right for the Government to try to tackle them, as they were unfair to the vast majority of taxpayers who pay the correct tax.

However, evidence uncovered by the Loan Charge All-Party Parliamentary Group found that, in the vast majority of cases, these arrangements were not entered as aggressive tax avoidance and were often a condition of employment, especially in the public sector.

Furthermore, a substantial number of people, especially in the public sector, did not know or understand that their pay arrangements involved loans.

One female health worker affected by the charge, who said she works in NHS front line services, told me: “I work with NHS locums who would not have a clue about the loan charge and would just contact the HMRC and set up payment.”

She was staggered by the amount she was expected to pay in connection with the charge.

“It was a devastating amount to receive and I didn’t have any understanding of how I had been caught up in this,’’ she said. “Many of my locum health care professionals will be caught out by this and would never challenge the HMRC.

“These are the very people working so hard and making such personal sacrifice.”

Another man facing the loan charge, who is a consultant surgeon, said he was directed to a scheme with the assurance that it was legal.

He added: “As a result of the loan charge and huge tax bills I stopped working for the NHS in January. I now work solely in the private sector through my limited company. The NHS lost a skilled and dedicated surgeon when surgeons are in short supply.”

“Obviously, when I made these decisions I knew nothing about COVID 19.

He added: “I am now doing almost nothing, I am not prepared to go back to the NHS and get paid PAYE due to the loan charge. When I left the NHS I lost my death in service and sick pay entitlement and was in the process of trying to buy similar cover, I cannot get this with the current crisis.

“I wrote to NHS England and asked, ‘If I volunteered my services, would they cover sick pay or death in service?’ They said they wouldn’t. I also wrote to HMRC regarding the loan charge and asked if my family would have to pay it if I died as a result of volunteering to work with COVID patients. They have not replied.

“For me now helping the NHS in any way is too risky as if I die my family will be presented with a huge tax bill and the one person that could work to pay it off will be gone."

The Treasury has said it recognises the concerns raised by the loan charge review and has responded by accepting all but one of its recommendations.

More than 30,000 people are estimated to benefit from these changes, around 11,000 of whom will be taken out of the charge altogether, according to the Treasury’s estimates.

The Government has published a policy paper on tackling the promoters of loan charge schemes and it has also issued a call for evidence on how to raise standards in tax advice.

Whenever I speak to people affected by the loan charge, I am struck by their quiet dignity.

They are honest people, often on modest incomes, who trusted their advisers to do the right thing. While the promoters of these schemes vanish into the shadows, the victims are left facing life-changing sums.

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