Loan Charge
Debate between Mohammad Yasin and Bambos Charalambous
Mohammad Yasin (Bedford) (Lab)
It is an honour to speak in this important debate. In January last year, Labour’s shadow Treasury Minister said of the impending deadline for people to pay the loan charge by April next year:
“We cannot let vulnerable people who have been exploited end up with massive tax debts hanging over their heads for many years to come. If we see bankruptcies, failing businesses, repossessions and even suicide, that will be because this Government have not done the outreach needed and not invested in adequate training.”—[Official Report, 20 November 2018; Vol. 649, c. 291WH.]
I am sorry to say that on 1 April we heard that HMRC had reported itself to the police over the death of an individual who had been notified of a loan charge bill. It was the first time that HMRC had felt it had been given sufficient evidence to link a death to the loan charge. I do not know any details about the case and I do not want to speculate, but it was a tragic loss of life and a reminder to all of us of what is at stake.
Bambos Charalambous (Enfield, Southgate) (Lab)
Some constituents have told me that they will be severely affected by the retrospective loan charge if it is rolled out tomorrow. It will have a devastating effect on them and their families. Does my hon. Friend agree that the charge should be halted and that a review should be set up to investigate HMRC’s actions?
Mohammad Yasin
I thank my hon. Friend for making that very important point. I entirely agree with him. It is very important that we make sure that people do not suffer because of this very unfair loan charge.
I have a number of constituents whose lives have been turned upside down by changes made three years ago to tax legislation for disguised remuneration schemes. On the face of it, I support the Government’s move to clamp down on tax avoidance schemes, but the way in which the loan charge has been handled is confusing and cruel, and seems less guided by principle than by rushing through a badly designed process to reclaim tax.
The director general for customer strategy and tax design at HMRC told the House of Lords Economic Affairs Finance Bill Sub-Committee in October 2018 that
“the loan legislation was put in place because it was just too much time and trouble for HMRC to exercise its pre-existing powers conferred by Parliament”.