Harrowing tales that show the PM must now help

BACK in April in the House of Commons, something rather strange took place.

There was a debate on what to many might have seemed an obscure subject, yet the chamber was packed with MPs of all parties.

So many wanted to speak that there simply wasn’t enough time. But one thing became clear, all of them agreed that their constituents were suffering a gross injustice.

The subject was the 2019 Loan Charge introduced in the Finance Act 2017. This is a levy on all payroll remuneration through loans made since 1999.

These schemes were entered into with the full knowledge of Her Majesty’s Revenue and Customs and were perfectly legal with no concerns or objections being made by HMRC despite its advice being sought.

Anyone who has ever been employed through such a structure is now being hit by a retrospective charge in the 2019-2020 tax year to be paid in one year.

More than 50,000 people are affected; most are decent people who have small businesses and who work long hours to make ends meet. Sadly, this charge is even now causing businesses to close and has forced people to lose their jobs and pushed many into bankruptcy.

Many are facing tax bills of more than £100,000 and so great is the effect on their lives I understand a number have either committed, or contemplated, suicide directly as a result.

Giving evidence last November to the Treasury Select Committee, the previous Chancellor, Philip Hammond, was clear and confirmed the payments were legal and above board. YeT

those who entered these schemes facing demands from HMRC feel they are now being treated like criminals.

As Labour MP Andy Slaughter said about his constituents caught up in this: ‘[It] was fully declared in the tax returns and HMRC was aware of what was happening.’

That is the point: throughout the past two decades HMRC has been aware of this process and only in 2017 did it decide to legislate.

For HMRC, the whole point of this is that it believes it will claw back billions from all those affected, and it appears this inducement has made it deaf to the worries and concerns of those whose lives are being blighted by this.

I, too, have constituents caught up in this, some of whom have come to see me in desperate straits, facing bankruptcy and scared about the future for themselves and their families.

They genuinely believed these loans to be a perfectly acceptable practice, otherwise they wouldn’t have entered into them. It is harrowing having to listen their stories and know that HMRC in turn does not appear to be listening.

In a recent letter to all MPs, the minister in charge, while explaining the position of HMRC, added that ‘HMRC acknowledges that the service has sometimes fallen short’, and that HMRC seemed to accept ‘the policy may breach established norms of taxation by reopening tax years which have already been signed off’.

If so, then as the All Party Parliamentary Group (APPG) has said, the Government should hold an independent inquiry into the Loan Charge.

This was something that the new Prime Minister, Boris Johnson, himself recognised when he signed an APPG letter in 2018 to the then Chancellor.

In fact, during the Conservative leadership campaign he underlined that when he said ‘it seemed superficially unjust that they should be retrospectively pursued’ and he called for such a review.

For everyone involved, it is the regressive, retrospective nature of this demand that causes the concerns. It was always a principle that retrospective taxation breaks the notion of natural justice.

This new Government must recognise the genuine threatening nature of these issues and act to hold that inquiry before taking any further action.