‘We served for Britain – now HMRC’s tax bill will crush us’

Nearly 90pc of the 50,000 contractors who face enormous tax bills have yet to settle despite the looming deadline. Figures released in HM Revenue & Customs’ annual report show that it has agreed payment plans with just 7,000 of the estimated 50,000 people affected by the “loan charge”, a levy on those who used loan-based avoidance schemes dating back 20 years.

The tax office has been encouraging people to settle by the end of September. This involves agreeing to pay all the tax due from involvement in so-called disguised remuneration schemes. Those who fail to settle will have to pay the loan charge.

The schemes involved payment via tax-free loans, usually from offshore trusts, which were never repaid. Those affected have said they were following the advice of accountants or employers.

The law was changed in 2016 to ban the schemes and tax those who

used them. This move has been criticised by MPs and Lords as “retrospective”, while a report published this week by the Treasury Committee concluded that HMRC’s actions had caused “widespread anxiety and distrust”.

Among the tens of thousands yet to settle is Zoe Taylor, 48, a military veteran who later worked in human resources. Her husband band is a serving officer in the RAF, AF, so the couple have had to relocate ocate frequently – Mrs Taylor estimates timates she has moved 31 times in her life – making contracting an attractive tractive option. She used loan schemes mes for 18 months on the advice of an accountant and now faces a £26,000 tax bill.

“The accountants guaranteed this was all legal al and said everyone was doing ng it,” she said.

Mrs Taylor added that she had first heard of the loan charge when her scheme provider wrote to her, prompting her to contact HMRC. Since then, , she has put her house on the market to ensure she can pay. HMRC has said no one will be forced to sell their home or be made bankrupt because of the loan charge and it will offer flexible payment arrangements to those who might struggle to pay. Mrs Taylor said: “It’s like t there’s a road with a 40mph spe speed limit and one day they chang change it to 30, but anyone who had previ previously driven at 35 gets fined.” An HM HMRC spokesman said: “The loan char charge means those who paid themsel themselves in this way, often throug through offshore trusts, now contr contribute their fair share for our vital public services.” C Campaigners claim as many as five people who faced the loa loan charge have committed su suicide. HMRC has referred on one case to the watchdog. A At a Conservative Party lea leadership hustings in June, Bor Boris Johnson promised to look into the matter and order an indep independent review. Ag A government spokesman said d details on specific policies would be announced over the comin coming months. The estimated number of contractors who face huge tax bills under the loan charge policy

Zoe Taylor must pay HMRC £26,000 000