I WILL order a thorough review of the loan charge, Prime Minister tells MPs

The Prime Minister made the comments on the same day that opponents of the loan charge marched on Westminster to demand a suspension and a review of the policy.

The loan charge was introduced in response to the Treasury’s concerns about “disguised remuneration schemes” which involved individuals being paid through loans, usually via an offshore trust in a low or no tax jurisdiction, which they did not have to repay.

According to the Treasury, the loan charge means people paying themselves through loans will have to contribute their “fair share” to pay for our public services. Workers from a wide range of professions have been hit with large tax bills, which in some cases date back to 1999.

The All-Party Parliamentary Group on the Loan Charge (APPG) argues that the charge is retrospective and overrides taxpayer protections - claims which have been disputed by the Treasury.

During Prime Minister’s question time, Ross Thomson MP, the vice chairman of the APPG, said the loan charge was driving people to despair and reportedly some to suicide.

He added: “With over 8,000 people signing my petition saying that we cannot go on like this, can my Right Honourable Friend (the Prime Minister) advise the House on what urgent action his Government will be taking to address this.”

Mr Johnson said: “I thank my honourable friend because this is an issue that my own constituents have raised with me and I know that many of my honourable friends have had this issue raised with them...It is a very, very difficult issue. What I have undertaken to do is to have a thorough-going review of the matter. Of-course, I will make sure that my honourable friend has every opportunity to have further discussions with the Treasury about how to redress the situation.”

Afterwards, the APPG said on Twitter: “Well done Loan Charge APPG Vice Chair Ross Thomson MP for raising the loan charge at PMQs. It’s good Boris Johnson announced a review but it MUST be the INDEPENDENT review he promised and an immediate SUSPENSION, lives are at risk.”

In a statement, the Loan Charge Action Group said: “We welcome the announcement by Boris Johnson of a review. However the loan charge must be suspended during the review and it must be independent.”

Earlier, people affected by the loan charge held a demonstration outside the Houses of Parliament, to remind Mr Johnson about his previous commitment to review and suspend the charge. The speakers included David Davis MP, a long-standing critic of the loan charge, who said: “The power to tax is the power to destroy”.

Around 100 MPs have written individually to the Chancellor Sajid Javid and Mr Johnson calling for a suspension of the charge.

At least 214 Parliamentarians have also signed an open letter calling for a loan charge review.

A Treasury report into the loan charge said: “The Government considers that the rationale for this charge is clear and robust, and has been consistently clear there is no intention to change the relevant legislation which has been enacted by Parliament.

The report added: “The Government is clear that the legislation is not retrospective. It does not change the tax position of any previous year, the tax treatment of any historic transaction, or the outcome of any open compliance checks.”