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Over 100 Parliamentarians write to the Prime Minister and Chancellor calling for a resolution to the ‘Loan Charge scandal’ before more lives are lost

Over 100 Parliamentarians have signed an open letter to the Prime Minister and Chancellor urging a resolution to ‘the Loan Charge scandal’ that avoids many bankruptcies and the risk of further suicides, with nine people having already been confirmed as taking their own life facing the Loan Charge. The ninth suicide was announced in a letter from the then Financial Secretary to the Treasury in July, which prompted the Loan Charge and Tax Fairness APPG to write to the then Chancellor.

The open letter states, “If the Government does not act to instruct HMRC to change course, we are fearful of what the consequences will be as thousands of people simply cannot pay the huge sums being demanded”. The letter refers to the survey conducted by the Loan Charge and Taxpayer Fairness APPG in Spring 2021, that showed that there is a real risk of more suicides, as well as many families facing hardship as a result of the Loan Charge and associated HMRC activity.

The open letter also urges the Government to engage with all appropriate parties, including with those facing the Loan Charge and tax sector professionals who have called for a resolution. Over 50 tax sector professionals have now signed up to a proposal to resolve the Loan Charge and the hope is, that the Government and HMRC realise that it is in everyone’s interests to find a resolution that both avoids bankruptcies and further suicides, but also tackles the huge administrative burden facing HMRC.

The open letter points out a resolution is in everyone’s interests and also refers to the central injustice, that those who have been mis-sold schemes are being hit with huge bills, whilst those who recommended, promoted and operated the schemes are not being chased for a penny of the disputed tax. The letter states:

“We urge you to act, not just out of compassion, but also common sense. A resolution is in everyone’s interests, not only the tens of thousands of families stuck in the Loan Charge nightmare, but also in the interest of HMRC and the Government, for whom the Loan Charge has become a significant problem, as well as being a wholesale failure as a policy. As well as pushing people to take their own lives and causing numerous mental and family breakdowns, the Loan Charge has failed to stop the promotion of tax avoidance schemes. There is also the central injustice – that those who recommended, promoted and operated these arrangements are not being asked to pay a penny of the disputed tax, but those they mis-sold these arrangements to are being hit with bills they cannot possibly pay”.

The letter concludes by urging the Prime Minister and Chancellor to instruct Ministers “to seek a fair resolution and to properly engage with all parties and consider all options to resolve this issue, fairly and practically, once and for all so that an end can be put to this nightmare for tens of thousands of UK families”.

Commenting, Loan Charge APPG Co-Chairs said:

Sammy Wilson MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG (DUP):

“The draconian Loan Charge was passed into law in 2017 and now five years and nine suicides later, it is time that the Prime Minister and Chancellor intervened, to change course to avoid many bankruptcies and the ongoing risk of more tragedies.

“The fact that over 100 Parliamentarians have now signed a letter to the Prime Minister and Chancellor shows the strength of feeling in Parliament and we urge the Government to finally listen and instruct HMRC to find a way out of the current situation, which is a nightmare for thousands of UK families but also an ongoing mess for HMRC”.

Greg Smith MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG (Conservative):

“The Loan Charge and associated settlements and demands remain a huge worry for thousands of people and families who simply cannot afford the sums they are being forced to pay. The current situation, with the Loan Charge, with unfair settlements and with HMRC also seeking action over pre-2010 arrangements, is a nightmare for thousands of families who simply can’t see a way out of this that doesn’t involve them selling the family home or going bankrupt.

“It has also has become a significant problem for HMRC and the Government and it is surely in everyone’s interests now to come up with a fair resolution that avoids thousands of bankruptcies and also allows HMRC to focus on other things. I hope that Rishi Sunak and Jeremy Hunt will listen and act and will work with the tax sector professionals calling for a resolution, to find a way out of this mess for all sides”.

Baroness Susan Kramer, Vice-Chair of the Loan Charge and Taxpayer Fairness APPG (Liberal Democrat):

“We are deeply concerned that if HMRC and The Treasury don’t look at this again, there will be many bankruptcies and a risk of further suicides. The Loan Charge has also been a complete failure as a policy. As well as pushing people to breakdown and suicide, it has also failed to stop the operation and mis-selling of schemes, with dodgy promoters pushing even more schemes and often to low-paid workers.

“It’s clear that individuals were mis-sold these schemes and were given no warning of pursuit by HMRC, yet it is these individuals who are facing ruin, whilst those who mis-sold the schemes to them have faced no action at all. This is unfair and we implore the Government to look at the Loan Charge again and find a better way to resolve this whole mess without ruining lives. We hope that more and more Parliamentarians will sign the letter, to show the strength of feeling that a resolution is vital to finally dealing with the whole debacle”.

[Ends]

Notes to Editors

  1. 107 Parliamentarians have now signed this open letter
  2. The Loan Charge and Taxpayer Fairness APPG (All Party Parliamentary Group) consists of parliamentarians of all parties from both Houses of Parliament to raise concerns about the 2019 Loan Charge as well as the wider context of fairness of tax legislation and the conduct of HMRC. The Loan Charge APPG is an officially registered Parliamentary Group, as described on the UK Parliament website www.parliament.uk/about/mps-and-lords/members/apg/. The APPG website is www.loanchargeappg.co.uk and the APPG is also on Twitter @LoanChargeAPPG.
  3. The Officers of the Loan Charge APPG are as follows:
  • Sammy Wilson MP (DUP) – Co-Chair and registered contact
  • Greg Smith MP (Conservative) – Co-Chair
  • Baroness Susan Kramer (Liberal Democrat) – Vice-Chair
  • Dr Lisa Cameron MP (SNP) – Vice-Chair
  • Sarah Olney MP (Liberal Democrat) – Vice-Chair
  • Gerald Jones MP (Labour) – Vice-Chair
  • Rushanara Ali MP (Labour) – Vice-Chair
  • Fleur Anderson MP (Labour) – Officer
  • Henry Smith MP (Conservative) – Officer
  • Alex Sobel MP (Labour) – Officer
  • Mohammed Yasin MP (Labour) – Officer