Locum nurses and doctors face unexpected bills after being hit with the loan charge

The loan charge has been debated in the House of Commons.
The loan charge has been debated in the House of Commons.
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Locum nurses and doctors are facing unexpected tax bills after being hit with the loan charge, according to a group of MPs.

In a statement on Twitter, the Loan Charge All Party Parliamentary group said that an independent review into the loan charge by Sir Amyas Morse did not provide a just resolution to the loan charge scandal.

It added: “The Morse review doesn’t end retrospection, nor deal with promoters.”

Evidence presented to the House of Lords has also indicated that locum nurses are being pushed into loan arrangements by umbrella companies maximising profits.

The APPG said on Twitter: “We’re very concerned to hear of all the public including NHS locum nurses and doctors being hit with the loan charge.

“As well as taking no action against those selling these schemes, the loan charge has failed to stop the sale of schemes.”

Sir Amyas, the former head of the National Audit Office, concluded the schemes were a form of tax avoidance but made a series of recommendations about the design of the charge and its impact on those in its scope.

The review was commissioned to look at the impact of the charge, which was introduced to tackle what the Treasury described as “disguised remuneration schemes”.

After publishing his review, Sir Amyas said: “The foundation of our tax system is fairness and where this is undermined through avoidance schemes it is right that these are tackled.

“However, in doing so, the Government and HMRC must act proportionately and responsibly.

He added: “As my review makes clear, the design and delivery of the loan charge didn’t get the balance right between tackling tax avoidance and protecting the rights of taxpayers and, in some cases, has caused serious distress to the individuals affected.”

Earlier this week, the Financial Secretary to the Treasury, Jesse Norman, told MPs: “Of the estimated 50,000 individuals affected by the loan charge, the Government currently estimate that more than 30,000 will benefit from the changes. That includes about 11,000 people who will be taken out of paying altogether. In addition, individuals who have settled or who are settling their tax liability with Her Majesty’s Revenue and Customs will be out of scope of the charge.”

However, during the same debate, Seema Malhotra MP said: “Neither the law nor HMRC made clear the position regarding loans and self-employed people.

“Indeed, it was not until 2016 that it was announced that the law would be changed to include the self-employed and others who did not even find out until a year or two later, such as my constituent Dhruv Salotra.

“Will the Financial Secretary do the obvious thing, get rid of all retrospection and apply the loan charge from when the law was clear and applied to everyone, including the self-employed, and, in addition, clamp down on those who promoted these disguised renumeration schemes in the first place?”

Mr Norman replied: “The hon. Lady is absolutely right that it is important to crack down on promoters, and at the Budget we will bring forward a package about how to do that. Her wider point, however, is wrong: this is not a retrospective measure.

He added: “It is also true that the Government have to some extent been vindicated by Sir Amyas Morse, who found that the loan charge was an appropriate way to respond to tax avoidance and, after detailed argumentation, suggested a date in December 2010 as the correct date from which to date the legality of it.”