HMRC's CEO apologises to MPs after people facing loan charge were sent letters referencing 'serial avoiders unit' by mistake

The chief executive of HMRC has apologised to a cross-party group of Parliamentarians after some taxpayers facing the loan charge were erroneously sent letters referencing a "serial avoiders unit".

Earlier this week, the All Party Parliamentary Loan Charge and Taxpayer Fairness Group (APPG) said people facing the loan charge were “deeply upset” at apparently being dealt with by a subdivision called the “serial avoiders unit” of HMRC.

The APPG said that it is unfair and wrong to label those facing the loan charge as serial avoiders because the vast majority of people facing the charge acted on professional advice and did not intend to avoid paying tax.

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The APPG wrote to Jim Harra, the Chief Executive and Permanent Secretary of HMRC, to express its concerns about “the continued existence, or not, of the serial avoiders unit”.

In his response to the All Party Parliemantary Group, Mr Harra states: "I apologise for any confusion and concern that this may have caused."In his response to the All Party Parliemantary Group, Mr Harra states: "I apologise for any confusion and concern that this may have caused."
In his response to the All Party Parliemantary Group, Mr Harra states: "I apologise for any confusion and concern that this may have caused."

The letter, which was signed by the APPG co-chairs Sammy Wilson MP, Greg Smith MP and Mohammad Yasin MP, says: “We have been contacted by people facing the loan charge, who understandably are deeply upset at being dealt with by something called the serial avoiders unit, when as HMRC are well aware, the vast majority of those facing the controversial loan charge took professional advice and many were also mis-sold schemes as tax law compliant and being without risk.

“As our own research shows the vast majority of victims caught by the retrospective loan charge used the arrangements they did as a result of taking professional advice and not to avoid tax, rather to avoid being caught by ‘IR35’ legislation and (ironically) therefore, to avoid the chance of being pursued by HMRC.

“We therefore also feel that for HMRC to label those facing the loan charge as ‘serial avoiders’ is unfair and wrong."

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The letter to Mr Harra says that a Freedom of Information request from November last year stated that the serial avoiders unit was closed down in 2019.

However, the APPG said it had been contacted by a person facing the loan charge who received a letter in October 2021 with the opening paragraph: “The serial avoiders unit is the subdivision of HMRC in which I work and the above is my address for correspondence purposes.”

In his response to the MPs who signed the letter, Mr Harra states: "I apologise for any confusion and concern that this may have caused. We have recently responded to a Freedom of Information Act request and a request for internal review on this subject.

"The Serial Avoiders Unit was created in 2014, as part of the inception of the Counter- Avoidance Directorate. Its purpose was to support customers who were involved in multiple avoidance schemes and wanted to settle; and secondly to address the most complex and high-risk customers who were persistent in their use of avoidance, being involved in a number of schemes over several years.

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"The team’s work was incorporated into the Complex Customer Resolution team within the Counter-Avoidance Directorate in 2019."

Mr Harra's letter added: "To maintain consistency, HMRC staff use a suite of letter templates and occasionally standard wording to construct correspondence. It appears that on a small number of occasions, outdated letterheads and/or wording were used, which erroneously referenced the Serial Avoiders Unit.

"I am sorry that happened. Since these errors have been brought to light, staff have been reminded of the importance of using the most up to date templates and wording.

"We are grateful for this being brought to our attention, as we aim to ensure all our communication with customers is clear and consistent."