Loan Charge
Debate between Neil O'Brien and Sammy Wilson
Sammy Wilson
The other point about the retrospective nature of this is that many people thought they had put in their tax returns and given the information. They were not told that there would be an inquiry into their tax affairs, and they believed that what they were doing was perfectly legal, and that their payments would not be subject to additional tax.
My second point is about certainty. Many of those who gave evidence said that for years they were given tax bills that did not even work. They were given bills for sums that did not coincide with what they had earned, and in some cases they were told that the figure was just an estimate. One person said that when she queried the bill, HMRC said, “That is what most other people are paying.” That is how the tax bills were worked out in some cases. There was no degree of certainty, and often the bills were not related to the years that people had worked, or to their income.
Is it fair that none of those who promoted these tax schemes have been pursued? The people being pursued are the recipients of the schemes, who in some cases were forced into them, as they would not have got employment otherwise. Their employer said, “This is the way you will get paid, and that is what you have to do.” The promoters of those schemes—many of whom are based offshore or are no longer in business—are not being pursued, and those who needed to join these schemes in order to find employment are now faced with a tax liability.
Some evidence that we received suggested that if people did not settle, they might be taxed not just on the money they received, but on the fees taken by those who have now disappeared. Is that fair? My third point was about convenience. That is why we use pay-as-you-earn, and we pay tax on a monthly basis or whatever, rather than being hit with a huge sum of money all at once.
Neil O’Brien (Harborough) (Con)
The point about people being asked for a huge sum of money all at once gets to the nub of the issue. Regardless of the rights or wrongs of the case, does the right hon. Gentleman agree that these people need huge amounts of time to pay, or in some cases debt forgiveness because they simply cannot afford to pay?
Sammy Wilson
I was just coming to debt forgiveness. When it comes to large companies, HMRC is prepared to negotiate and cut tax bills significantly. In these cases, however, it is a case of, “This is the sum owed. Enter into a discussion and settlement with us, or you will be hit by the loan charge.” For all those reasons, as the hon. Member for Mole Valley (Sir Paul Beresford) said, this problem does not simply require us to sit down with our constituents and a tax inspector; this requires action by the Minister. We have asked for reasonable action from a reasonable Minister, and I trust that is what we will get today.