More than 130 MPs call on Government to suspend all activity linked to the loan charge

MORE than 130 MPs have called on the Government to suspend all activity related to a controversial policy which has been linked with seven suicides.

Sir Ed Davey has been an outspoken critic of the loan charge.
Sir Ed Davey has been an outspoken critic of the loan charge.

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The All-Party Parliamentary Group on the Loan Charge (APPG) said that Parliamentary support is growing for an immediate suspension of the "draconian" loan charge and associated accelerated payment notices (APNs).

The APPG recently wrote to Sir Amyas Morse, who is leading the Loan Charge Review, stating that the group has been informed of another suicide of someone facing the charge.

The APPG said: "This is the seventh suicide of someone facing the loan charge that has been reported to and confirmed to the Loan Charge APPG."

Opponents of the loan charge argue that it is retrospective and overrides taxpayer protections - claims which have previously been disputed by the Treasury.

A review has been commissioned into the loan charge after hundreds of MPs expressed concerns about 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. Workers from a wide range of professions have been hit with large tax bills, which in some cases date back to 1999.

The open letter to the Chancellor Sajid Javid, which has been signed by at least 138 MPs, says: "We are writing this urgent letter to you calling for an immediate suspension of both the Loan Charge and other related HMRC activities, including APNs, until the Loan Charge Review has concluded and the Government has implemented its recommendations.

"This is vital for two reasons. First of all, it is quite wrong and undermines the whole basis of the independent review for HMRC to continue pursuing people for arrangements subject to the Loan Charge.

"Assuming that this is a genuine review, the Loan Charge may be changed as a result, so it is wrong that people do not know if they may be later penalised for not settling now, whilst not knowing whether they will face the Loan Charge in its current form or not.

"A suspension of the Loan Charge and all associated activity is clearly fundamental to a genuine review. Secondly and most importantly, an immediate suspension is vital due to the serious risk of suicide, if the Loan Charge is not suspended and if associated APNs are not put on hold.

"The delay that the Treasury have announced, not to the Loan Charge or APNs, but only to the process of finalising settlements, is inadequate and risks further suicides."

The letter states that the Loan Charge Action Group volunteer helpline has reported an alarming increase in the number of calls of people reporting suicidal thoughts.

The letter adds: "This is as a result of people realising that despite the review, the threat of the Loan Charge remains in place and, in particular, that they are still being pursed for related APNs. It is simply outrageous, as well as reckless, for HMRC (or any appointed debt enforcement agencies) to continue to pursue people for APNs that are linked to schemes subject to the loan charge, whilst a review is taking place.

"Since the Loan Charge debate in the House of Commons, over 200 MPs signed up to the previous open letter which called for such a suspension of the loan charge and an independent review and over 100 MPs have written personal letters to the Prime Minister or the Chancellor supporting the calls for a suspension. It is notable that eight Ministers in the current Government, including three Cabinet Ministers, including the Prime Minister, have previously publicly supported a suspension. So we call on you to announce a complete suspension of the Loan Charge, of HMRC debt enforcement for any signed settlements and for any outstanding APNs."

Leading figures in the APPG include Sir Edward Davey MP, Ross Thomson MP Ruth Cadbury MP and Baroness Kramer.

An HMRC spokesperson said recently: “HMRC is committed to treating all those we serve with respect and consideration.

“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.”

The Treasury has commissioned an independent review to consider the impact of the loan charge.

A spokesman said: “Sir Amyas Morse is independent and has full control over the review. He will report back by mid-November, so we can give taxpayers certainty about what they need to do in advance of the January Self Assessment filing deadline.”