Ben Wilkinson Personal Account

Campaigners fear this tax mess is as devastating as the Post Office Horizon scandal

The Post Office Horizon scandal had been rumbling along for years, but reached fever pitch this month after it was turned into a prime-time television series.

The ITV drama Mr Bates vs The Post Office brought to life the devastating human consequences of the ordeal and brought it to a crescendo. It has so far led to former chief executive Paula Vennells handing back her CBE and technology firm Fujitsu admitting it should contribute to the compensation bill.

The injustice was there for all to see.

Hundreds of sub- postmasters were accused of stealing and even imprisoned because of flaws in the Post Office’s IT system. Lives were destroyed and the powerful turned a blind eye.

There is another matter that has been causing distress in recent years, but it is unlikely to drum up the same sympathy. This is because the victims are those caught up in tax avoidance.

The controversial Loan Charge legislation has seen around 50,000 people hit with vast tax bills and has so far been linked to at least 10 suicides. Workers caught up in the scandal were typically self- employed contractors who were paid using tax-free loans from offshore trusts that did not need to be paid back. Employers, many of whom chose to pay workers in this way, were also not required to pay income tax and National Insurance contributions.

At the heart of the issue is whether or not it is fair to pursue people for tax they legitimately did not pay at the time, often after trusting the advice and processes of their advisers and employers.

But regardless of the morality of it, the “disguised remuneration” scheme was – at the time – a legal way of cutting tax bills. The Government decided to move the goalposts and send tax bills dating back as far as 20 years. The Loan Charge, announced in 2016, made the outstanding loans taxable income and repayment deadlines were set.

Collectively, HM Revenue and Customs has demanded £3.2bn is paid – an average of £64,000 for every worker caught up. This is money already spent on homes, mortgages, living expenses.

Telegraph Money has previously reported on how one family believed their grandfather was driven to suicide after receiving a £50,000 tax bill.

MPs and campaigners are demanding the loan charge pursuit is suspended and a “genuine” independent review commissioned. In Parliament on Thursday, Sammy Wilson, a Democratic Unionist Party MP, accused ministers of “turning a blind eye” to the suffering of tens of thousands of workers, and said: “We are looking at another Horizon scandal.”

Previously, HMRC has insisted it takes the “wellbeing of all taxpayers very seriously”, and encouraged those struggling with their mental health to contact the Samaritans or Mind.

The Loan Charge is “non- discriminate” legislation that does not take into account how or why someone came to owe tax, and it doesn’t consider how such a bill could destroy a life. The taxman’s Loan Charge campaign fixates on the victims and not the firms that facilitated these arrangements and profited from them.

HMRC is hounding ordinary workers as if they are tax-dodging corporations. Of course it has to do all it can to collect tax, but at what cost? ben.wilkinson@telegraph.co.uk