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Norfolk contractor urges end to cash scandal that is ‘costing lives’

PUBLISHED: 08:25 27 August 2020 | UPDATED: 09:52 28 August 2020

Chancellor of the Exchequer Rishi Sunak arrives at the Foreign and Commonwealth Office (FCO) in London, ahead of a Cabinet meeting to be held at the FCO, for the first time since the lockdown. Picture: PA Wire/PA Images/Stefan Rousseau

Chancellor of the Exchequer Rishi Sunak arrives at the Foreign and Commonwealth Office (FCO) in London, ahead of a Cabinet meeting to be held at the FCO, for the first time since the lockdown. Picture: PA Wire/PA Images/Stefan Rousseau

PA Wire/PA Images

A Norfolk contractor affected by the loan charge scandal is urging the chancellor to “see sense” and back plans for a settlement to the issue, which he says is “still costing lives”.

Campaigners fighting tax changes, which it is feared could leave thousands at risk of financial ruin and mental health problems, have called on the government to reach a settlement.

Activists battling the loan charge - a retroactive tax measure intended to recoup Treasury losses from a legal scheme which saw contractors paid by third-parties - have urged Her Majesties Revenue and Customs (HMRC) to reach settlement with those liable and bring in a six month delay.

The loan charge all-party parliamentary group (APPG) said the offer was “reasonable” and said doing nothing would risk “bankruptcy, homelessness, breakdown and suicide”.

READ MORE: Warnings of ‘devastating’ bankruptcy and mental health concerns over HMRC loan charge introduction

Tim, a Norfolk contractor affected by the loan charge, said he backed moves for a settlement.

“It seems like the first sensible approach,” he said. “Hopefully the chancellor will see sense and try and push this through. It will save a lot of money for HMRC as well.”

He added: “Someone got a letter saying they were going to get locksmiths to get access to their house to start reclaiming debt. You can’t imagine what that’s like for people. It’s still costing lives.

“Everyone can get on with their lives. It’s something you can pay rather than people having to lose their house.”

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The move would see people pay a 10pc income tax rate on loan balances as a final settlement - which is campaigners say amounts to around half of what HMRC says it is owed.

The APPG have also called for a delay period for voluntary settlements, until January 2021.

The group has claimed payment terms are “vindictive” and “far harsher” than those imposed on people guilty of fraud and theft.

Sir Mike Penning, Conservative APPG co-chair, said: “We urge the Government and HMRC to do the right thing and announce a delay and genuine fair settlement.”

While Sir Ed Davey, Liberal Democrat co-chair, said: “Current settlement terms are simply unpayable for most people so produces no money and only prolongs misery for the taxpayer.”

And Ruth Cadbury, Labour co-chair, added: “The scandal is not going to go away as a political issue or as a serious mental health crisis. Doing nothing will mean individuals are at risk of bankruptcy, homelessness, breakdown and suicide.”

A government spokesman said: “The loan charge was introduced to tackle disguised remuneration tax avoidance schemes. It is the view of HMRC that loans made through these schemes have always been taxable. The government will continue to tackle this and other forms of tax avoidance vigorously.

“HMRC has to be fair to all taxpayers, and this includes those who have already settled with HMRC or have never used tax avoidance schemes in the first place. They will only settle for an amount that is consistent with the law.

“The government has already extended the deadline for individuals affected by the loan charge to submit their 2018-19 self-assessment tax return to September 30, 2020.”

READ MORE: Warnings of ‘devastating’ bankruptcy and mental health concerns over HMRC loan charge introduction


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