HMRC scandal is the ‘next Horizon’

MPS compare loan charge crackdown linked to 10 suicides with miscarriage of justice by Post Office

A TAX crackdown on freelancers and agency workers linked to 10 suicides and an abortion has been labelled “the next Horizon scandal”.

MPS yesterday said the Government faces “another Post Office scandal” as they called for an end to HM Revenue & Customs’ “loan charge” – a tax charge affecting 60,000 workers including nurses, teachers and IT contractors.

They entered into widely promoted tax-saving schemes which meant they were paid wages via loans. But in 2017 HMRC demanded that tax be paid on all the loans they had received in one go, often resulting in six-figure bills charged at the highest 45 per cent rate.

The charge has been formally linked to 10 suicides, while yesterday it emerged one victim had chosen to have an abortion to avoid having a child with the tax dispute hanging over her.

Debating the charge in the House of Commons, MPS accused HMRC of chasing the victims of the loan charge schemes because they were “easy targets”, and said governments turned a blind eye to the issue. Sammy Wilson, the Democratic Unionist Party MP for East Antrim, said: “We are looking at another Horizon scandal.”

Sir Jacob Rees-mogg, Tory MP for North East Somerset, called it “a classic example of the state abusing its power through aggressive tax collection”.

The loans, sold from the turn of the millennium, were argued to the contractors as compliant with UK law. Some were forced into the schemes by their employers, it is claimed. Sarah Green, the Lib Dem MP for Chesham and Amersham, said one of her constituents had an abortion as she was concerned about the affordability of having a child because of the charge.

Sarah Gabbai, of law firm Mcdermott Will & Emery, said there is evidence that contractors “were either inadvertently dragged into these schemes or were inadequately advised of the risks”.

Last night, MPS including Ms Green called for the Government to launch a “genuinely independent review” into the scandal. In 2019, the government ordered an independent review to be carried out by Sir Amyas Morse of the National Audit Office. Many of the its recommendations were accepted – including one that the charge should be repealed for loans made before 2010.

But a report by the Loan Charge Allparty Parliamentary Group alleged that HMRC interfered, according to several Freedom of Information requests.

About 40,000 people are still being pursued for the loan charge.

An HMRC spokesman said: “We take the wellbeing of all taxpayers very seriously and recognise that dealing with large tax liabilities can lead to pressure on individuals.”