Loan charge revelations highlight injustice of 'devastating' policy: Greg Wright

The revelation was dropped by the Conservative MP Greg Smith, co-chair of the Loan Charge and Taxpayer Fairness All Party Parliamentary Group (APPG), towards the end of a relatively bland Treasury Questions session in the Commons.

Mr Smith addressed the Chancellor, Rachel Reeves: “A recent freedom of information request has revealed that, for a number of schemes, HMRC has settled with large corporations for just 15% of what was owed. With the loan charge review ongoing, does the Chancellor agree with me that individuals should be treated no differently from the large corporations for which this precedent has been set?”

Freedom of Information requests help the public find out what is really going on in the corridors of power. They also enable journalists to discover what officials are saying and doing behind closed doors.

The FOI cited by Mr Smith, which The Yorkshire Post understands relates to the minutes of a meeting in 2019 linked to the loan charge, certainly caused eyebrows to be raised. Mr Smith was not the only MP to express concerns about the controversial tax policy, which has been linked with a number of suicides.

Labour MP Emily Darlington rightly described the loan charge scandal as “absolutely awful and devastating”, affecting tens of thousands of people's lives.

She added: “It failed to be addressed under the last Government. Can the Minister please tell us what he is doing to make sure people are not still being sold this illegal product?”

Responding for the Government, Exchequer Secretary to the Treasury, James Murray stressed that there was an independent review into the loan charge ongoing, adding: “It's really important that I as a minister don't comment on that and let the independent reviewer complete his work and then report back to us as a Government."

Mr Murray told Ms Darlington that, alongside the loan charge review, “the Government have published a consultation on a comprehensive package of measures to close in on the promoters of marketed tax avoidance schemes. As we know, these contrived schemes both deprive public services of funding and leave their clients with unexpected tax bills.”

MPs have previously criticised the limited scope of the latest review into the loan charge, which was announced in January, with Mr Smith describing it as “not actually a review of the Loan Charge, which is what the Chancellor promised”.

It’s hard to argue with the simple point made by Mr Smith during Treasury questions. When it comes to taxation, surely individuals should be treated in the same manner as large corporations? Isn’t that a fundamental principle of justice?

Greg Wright is the deputy business editor of The Yorkshire Post