Campaigners and MPs have called for a parliamentary inquiry into the loan charge scandal, accusing HMRC of “whitewashing” its tough tax crackdown linked to a number of suicides.
The Loan Charges Action Group (LCAG) has hit out at the Treasury Board after writing to the Inland Revenue requesting information about the contractor loan scheme’s approach.
These measures were widely (but incorrectly) advertised by employers in the early 2000s as being HMRC compliant, and tens of thousands of workers who signed up to them are now facing the consequences of having their employers pay Payroll tax bills, bills that ruin their lives.
Campaigners said the Treasury Board letter was “nothing more than a tick-box exercise prompted by all the recent reporting on the issue”. loan fees“And there needs to be an investigation that hears from victims and tax experts.
LCAG spokesman Steve Packham told Sky News: “It is frustrating that the Treasury Select Committee did not hold a full select committee inquiry to hear evidence from those facing lending allegations and tax sector professionals, Instead simply write to HMRC.
“This appears to be nothing more than a tick-box exercise triggered by all recent reports of loan charges, allowing HMRC to respond with what is often misleading and one-sided.”
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Loan program sparks tax storm
He accused the committee of “failing to accept parliamentary scrutiny, just as the Post Office has not been properly challenged for too long” – References Horizon IT Scandal.
“What we need is a comprehensive select committee inquiry and we urge committee members to announce an inquiry and call a variety of witnesses, including those whose lives have been ruined by HMRC’s practices.”
Sky News has previously reported how tens of thousands of people across the country are facing tough tax demands from HM Revenue and Customs (HMRC). The activity was linked to 10 suicides.
What are loan fees?
It all goes back to legislation in 2016 that required individuals to pay their employer’s share of the tax – the “loan charge”.
HMRC has been criticized by MPs and tax experts for not regulating the contractor industry when implementing the schemes.
The employer pays wages through the loan – and it is widely advertised as HMRC compliant.
Some people facing loan charges, including nurses, cleaners and teachers, said they had no choice but to be paid this way when they took the job, while others insisted they were trying to do the right thing and Following the introduction of complex self-employment rules.
No plan sponsors have been prosecuted
In a letter to the Treasury Board, HM Revenue and Customs Commissioner Jim Harra confirmed, No individuals have been prosecuted for “promoting and/or operating” what is now known as a disguised remuneration (DR) scheme, noting that “promoting or operating a mass marketing tax avoidance scheme does not in itself constitute a criminal offence”.
He said HMRC did not have data on how many people had “inadvertently” joined the scheme. But “the motives of those who participate in tax avoidance schemes do not affect whether tax is payable.”
Mr Harra’s letter also revealed that the median settlement amount for individuals was £19,000, but noted that around 40,000 people had yet to settle. A total of about 50,000 people are estimated to be affected.
He rejected accusations that the department was operating without scrutiny, saying “HMRC is not irresponsible” and “we act under the general guidance of ministers”.
firm line Recent criticism of ‘sinister’ new tacticsHe said: “We do not accept the suggestion that we are deliberately being heavy-handed. We certainly do not deliberately write to taxpayers on specific days, such as their birthdays, to increase the impact of our interventions.”
“We do not play with people’s emotions. We recognize there is a human story behind every case and we take our Charter responsibilities very seriously.”
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HMRC ‘whitewashed the whole mess’
Conservative MP Harriett Baldwin, chair of the Treasury Committee, said: “Many of my colleagues have expressed concerns about the implementation and administration of HMRC’s loan charges. As a committee we believe that it is a good idea for our It’s important that colleagues get answers.” MPs and their constituents.
“I hope the information contained in Mr Harra’s response will make a useful contribution to the public debate.”
However, Tory MP Greg Smith, co-chair of the Loan Charges APPG, said that while it was “welcome” for the council to increase loan charges, “and has written to HMRC, it also needs to hear from victims and tax Professional advice can suggest that much of what HMRC is saying is simply not an accurate depiction of the loan charge scandal.”
Greg Smith. Image: PA
He said: “As usual, HMRC are sugarcoating the whole mess to give the false impression that they acted at the time and warned users, when the reality is they failed to regulate the contracting sector and failed to warn contractors , then invented loan charges so that they were retroactive, but only for workers, not those running the scheme.
“With 10 confirmed suicides and 13 attempted suicides, and countless lives having been ruined, the Treasury Select Committee should also seek evidence from other parties to give a truer picture of the entire lending allegations scandal.”
He warned: “We are very worried about the consequences if HMRC does not change its approach and we hope the Select Committee will join us in properly holding HMRC to account before more lives are ruined”.
Anyone feeling emotionally distressed or suicidal can contact Samaritans for help on 116 123 or email jo@samaritans.org in the UK.
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