'This terrible sham of a policy': Campaigners slam the loan charge
Critics have claimed that the Government’s planned settlement for the loan charge scandal cannot be described as fair or comprehensive because several groups have been left outside it.
The Loan Charge Action Group has highlighted the fact that many people have already paid stacked Loan Charge, interest and penalties. The group says there is still no clear framework to recalculate and refund over-payments.
One man affected by the loan charge, who settled five years ago for a total of £99,000, claimed that, if he had waited for the review he could have seen a large reduction in his settlement.
The man who asked to remain anonymous, said he believed the Government in opposition were cornered into accepting a review.
He added: “In power they then had a problem and did not deliver the review that was promised, it was not a review of the loan charge but a review purely on getting those who had not paid to pay.
“If they cared about individuals the review would have specifically included those who had settled but it did not.
“Even the £70,000 reduction is in reality a reduction from a fully loaded artificial position of all years income taxed in a single year.”
Another man affected by the loan charge, said he had “settled” his tax affairs with HMRC and is 5 years through a payment plan with HMRC that runs for 10 years.
He added: “This settlement left penalties still “hanging” outside the settlement agreement along with lots of interest on them as I was pressured to meet their timelines to agree the settlement. My settlement also included further interest as part of the time to pay arrangement and interest on the tax liabilities that is many thousands of pounds.
“I’m very much hoping that the review will be applied to all taxpayers caught up by this terrible sham of a policy. Otherwise I would have been much better off not settling in the first place.”
The loan charge was a very sloppy policy to attempt to make up for the years of HMRC failing to take action against mis-selling schemes by professional advisers, according to the man.
He added: “All it has done is cause mayhem for all involved, including HMRC with their costs running into many millions to collect relatively little in return.
“Fairness has to be the key to tax policies. It ultimately relies on the majority accepting and abiding by the policy.
“I really hope a “fair” approach is adopted to all tax payers that also ensures HMRC accepts the part they have had to play in this massive failure of policy.”
Another man said he was within a couple of days of “figuratively writing a cheque for HMRC” in connection with the loan charge, when the review was launched. He said that, prior to the review, he had reached a point where a figure of £288,000 was agreed.
He added: “Having seen the review, I can’t believe I was fortunate enough not to pay. If I had, I would be regretting it even more. As things stand, I should be able to resolve it with a reasonable reduction against the total amount.
“I will resent every penny, but will be thankful to be out of the nightmare and although tough, will avoid some of the financial burdens I was facing.”
The man said he always believed he acted in good faith, under the guidance of a professional practice, who had assured him the scheme was compliant.
He said this professional practice “continued for years without question while I was pursued relentlessly”.
“I know the review is not for everyone, especially for those who have already settled, but for me, right now it’s a way out and I’ll take it rather than keep going.”