Loan charge is pushing people into homelessness and bankruptcy, says former Conservative Party leader Iain Duncan Smith

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Mr Duncan Smith said he had contacted Mr Johnson and the new Chancellor Sajid Javid asking they take “urgent action to rethink the highly unfair and harmful loan charge”.

The 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 public services.

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

In his letter to Mr Johnson, Mr Duncan Smith said: “Thus far the retrospective loan charge has caused numerous businesses to close, forced some to lose their jobs and livelihoods and has also pushed several into bankruptcy.

“Many have faced tax bills of well over £100,000 leading to some risking homelessness.”

“The loan charge APPG has reported that in a recent poll over 40 per cent (of people affected by the charge) have contemplated committing suicide.”

So far 210 Parliamentarians - including 80 Conservatives - have signed the open letter organised by the APPG calling for a suspension and an independent review of the loan charge. The latest MP to sign is Andrew Bowie, who was the former Prime Minister Theresa May’s Parliamentary Private Secretary.

A government spokesperson said: “The loan charge is designed to tackle tax avoidance and ensure everyone pays their fair share. It builds on more than two decades of HMRC action to challenge these schemes.

“The PM and his team of ministers will be setting out more details on their planned policy agendas over the next few weeks and months. As always, decisions on tax are for the Chancellor to announce at fiscal events.”

An HMRC spokesman said previously: “We have committed to giving people as long as they need to pay the loan charge as we completely understand that facing a large tax bill can be difficult and stressful. Our teams are trained to identify customers who are anxious, worried or need extra support and ensure they get the help they need.”