Loan charge: Letters from HMRC counter-avoidance are causing 'huge distress', MPs tell Chancellor

The tax policy has affected an estimated 60,000 people and been linked to 10 suicides, the House of Commons was told during a debate last year. In January, the Government acknowledged that there remain ongoing concerns about the loan charge, including the size of liabilities owed by some of those affected and their ability to pay the tax that they owe in a reasonable timeframe. Mr Murray, who met with MPs and loan charge campaigners last year, said the new independent review aims to bring the matter to a close for those affected while ensuring fairness for all taxpayers and that appropriate support is in place for those subject to the Loan Charge.

However, members of the All-Party Parliamentary Loan Charge & Taxpayer Fairness Group have now written to Ms Reeves “to raise some important further points relating to the McCann Review into Loan Charge settlement terms about the letters HMRC have and are sending about it”.

The letter from the MPs states: “We have received correspondence from individuals expressing considerable distress at receiving the letter from Counter-Avoidance about the McCann review.

"This is the department of HMRC that has been responsible for the whole Loan Charge fiasco, has routinely failed to respond to correspondence in a timely and correct fashion and of course the department of HMRC that has been sending the demands, the ‘brown letters’ that have caused so much distress.

"To therefore have these letters sent from Counter-Avoidance was completely thoughtless and unnecessarily distressing (as well in our view, as being inappropriate as the part of HMRC that should itself be under investigation as it would be under a genuinely independent review of the Loan Charge).”

"The distress caused is worse where HMRC Counter Avoidance has sent these letters out to individuals classified as vulnerable and above all those especially vulnerable individuals where HMRC have an agreement in place to not to contact them directly. One of the people who has tried to take his own life and who met with James Murray last year emailed the APPG expressing huge distress at receiving one of these letters from HMRC Counter Avoidance.”

The MPs state that it was inevitable that for people to receive letters from HMRC Counter Avoidance, during what is being presented as an independent review and with the Treasury suggesting that cases are on hold, would trigger the same anxiety and distress as other letters from Counter-Avoidance, which are assumed to be letters making demands for the disputed tax.

"This was completely avoidable had these letters come from the review, not HMRC (and of course, better still, if this was a genuine full review/inquiry of the whole Loan Charge Scandal, which would not have involved HMRC in any way, other than as a party to be investigated and scrutinised).”

In response to the letter, a HMRC spokesperson said: “We wrote to all disguised remuneration customers following the announcement of the Loan Charge Review to inform them that a review was taking place.

“We gave each customer a named caseworker who could discuss their case and informed them whether we believed if their situation would be considered by the review.”

HMRC said it appreciated there’s a human story behind every tax bill and it takes the wellbeing of all taxpayers seriously.

"We recognise dealing with large tax liabilities can lead to pressure on individuals and we are committed to supporting customers who need extra help with their tax liabilities. Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about your options.”