'How is this justice?' Iraq war veteran is latest victim of charge scandal - Greg Wright

For almost two years, The Yorkshire Post has been calling for robust punishment for the promoters at the heart of the loan charge scandal.
The report compiled by a House of Lords' committee says: "We question whether HMRC has struck the right balance between focusing on individuals who used these schemes and the promoters of such schemes."The report compiled by a House of Lords' committee says: "We question whether HMRC has struck the right balance between focusing on individuals who used these schemes and the promoters of such schemes."
The report compiled by a House of Lords' committee says: "We question whether HMRC has struck the right balance between focusing on individuals who used these schemes and the promoters of such schemes."

A powerful committee of the House of Lords supports this view, and is calling on HMRC to track down the promoters behind these schemes. Their victims, who include NHS staff, are facing ruin as the pandemic continues to disrupt life across Britain.

The latest victim to contact me is a female soldier who served on the frontline in Iraq in 2003. She is facing a potentially life-changing bill.

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The woman said she only recently discovered she had been using loan schemes from November 2015 to 2020. Her advisers never warned her of the risks, and she now expects to receive a tax bill running into tens of thousands of pounds.

She said: “It’s the same for any nurse or a doctor who has saved a life.

“If we knew this was wrong or there would be a charge against these loans, not a single person would have taken up these schemes.”

Another loan charge victim told me: “You go to sleep thinking about it and then you wake-up remembering it. I consider myself to be of good character and nature, but the way HMRC are acting as judge and jury at the moment is certainly starting to cause..unnecessary anguish.”

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One of the most thorough and impartial assessments of the loan charge controversy has been provided by the House of Lords Economic Affairs Finance Bill Sub-Committee.

The committee’s report - New powers for HMRC: fair and proportionate? - calls on the Government to redouble efforts to prevent the proliferation of new tax avoidance schemes.

It states: “We question whether HMRC has struck the right balance between focusing on individuals who used these schemes and the promoters of such schemes. HMRC must prioritise taking effective action against promoters.”

It also highlights the particular vulnerability of lower income taxpayers to these schemes and their continued use by some employment intermediaries.

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HMRC said it is aware of 20 promoters who have left the market in recent years as a result of the measures in place.

The report states that credit should be given to HMRC for its work in reducing the tax avoidance tax gap. However, an estimated 20 to 30 promoters are still active, and based on the Government’s evidence, it appears that a “not insignificant proportion” of users of those schemes are joining schemes for the first time.

So new victims - often on low wages - are being ruthlessly targeted every day by promoters who operate in plain sight.

To quote the report: “The continued sale and marketing of disguised remuneration schemes, most recently to returning NHS workers earlier this year, shows the need for the Government to act more effectively, using the full range of measures at its disposal, if it is to be able to close these scheme down.

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“As was the case with the loan charge, it seems that the involvement of some individuals in these schemes is at the instigation of their employer, and solely for their employer’s benefit. The Government should prioritise action against such employers, to stop the growth in lower paid workers at risk of being targeted by scheme promoters.

“Where possible, HMRC should pursue criminal action against promoters, including against those who have sold schemes in the past to which the loan charge applied.”

In its evidence, HMRC said that bringing a criminal prosecution against a promoter was not feasible in many cases because of the need to prove dishonesty.

Surely anyone promoting and benefiting financially from this type of scheme today is guilty of fraud, because they will have misled the scheme user about the potential benefits?

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A spokesman said HMRC was increasingly focusing on a few, hard core promoters who remain in the market.

Without effective deterrence, this horrific saga will continue to ruin the mental health of thousands of honest people. Just ask the soldier who risked her life defending the nation.

“I was fighting on the understanding I may die,’’ she said. “How is any of this justice?”

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