The Chancellor can save lives by finding 'fair resolution' to loan charge in the Budget, says action group
The Loan Charge Action Group said an intervention from the Chancellor could save lives and restore faith in the tax system.
The group, which represents people affected by the loan charge and associated HMRC activity, has sent a budget submission to the Treasury, calling on the Ministers to listen to the group of tax sector professionals who have called for a resolution. The group is also calling for measures which it believes will deliver “much needed taxpayer fairness something; that is vital to restore trust in HMRC”.
In a statement, the group said: “There have now been 10 suicides of people facing the controversial loan charge. The tenth tragedy was announced by HMRC’s First Permanent Secretary and CEO, Jim Harra in a letter to the House of Commons Treasury Select Committee on January 6.”
It added: "A resolution is essential, because affected taxpayers simply cannot afford to pay the demands HMRC are making of them. This is also the message of the group of tax and accounting sector professionals who have proposed a loan charge resolution in the form of a new settlement opportunity, but on terms that actually allow people to make full and final settlement of an appropriate and affordable proportion of the disputed tax and over a time period that makes payments affordable without hardship or having to sell their home.
"Such a resolution would not only assist the tens of thousands of families whose lives are currently blighted due to the situation they are in, but would also assist the Government and HMRC.
"It would significantly reduce the huge administrative burden of dealing with this issue and would allow HMRC to focus on other areas of important work and compliance. Tax sector professionals also believe that such an opportunity would actually bring in significantly more to the Exchequer than the current approach as many people would then be able to and be prepared to settle.”
The majority of people facing HMRC action were genuine victims of mis-selling with scheme promoters and operators stating that they were legal, ‘tax law compliant’, ‘QC approved’ and with little, or in most cases, no mention of any risk of challenge by HMRC, according the group.
"Despite this, promoters and operators of loan schemes are not being asked to pay a penny of the tax HMRC says should have been paid, despite the huge fees they took, but instead are ruthlessly pursuing those who used schemes in good faith.”
A Government spokesperson said: “The Loan Charge targeted tax avoidance schemes that sought to avoid income tax and National Insurance contributions by paying earnings in the form of loans. Significant changes were made to the Loan Charge following Lord Morse's independent review in 2019 which reduced its impact. HMRC takes the wellbeing of all taxpayers very seriously and recognises that large tax liabilities can add significant pressures for some people. For those who may need specialised help, HMRC advisers encourage them to contact organisations such as Samaritans or Mind.”