Loan Charge
Debate between Nic Dakin and Teresa Pearce
Nic Dakin
The hon. Gentleman makes the point clearly; the retrospective element is particularly disturbing. I am concerned that a small number of ordinary working people who are not millionaires with broad shoulders, but who are on average incomes and have acted in good faith, are being hit by significant tax penalties implemented in the most unfair manner.
Several hon. Members rose—
Nic Dakin
I do not know the details, but I think the Financial Secretary will be able to update us on that when he responds, and I think that that is being looked at. The reality is that people who wanted work were pretty much forced to go into these schemes, which they believed, having checked them out, were perfectly reasonable and legal. Many years later, they are picking up a big tab that does not seem to equate to the money they got at the time, but seems much bigger.
Nic Dakin
No, I will complete my speech, because other Members need to speak.
Another of my constituents, Jonathan Davidson, told me:
“The loan charge continues to be a real worry to myself and my family. HMRC have only now”—
this is a couple of weeks ago—
“advised me of the actual settlement figures which are much higher than my expectations, as such I am being forced out of retirement even though my health is not great and I am now actively looking for employment.”
That is an example of what is happening to real people’s lives. For all my constituents affected, this issue is causing severe emotional and financial distress, which HMRC is neglecting and not taking note of. It is behaving as though it does not understand that this is about real people’s lives. This is serious and should not be minimised. This is having a devastating impact on people’s lives, and the distress is very real.
HMRC’s actions are also self-defeating, as they will undoubtedly push ordinary working people into bankruptcy, restricting HMRC’s ability to recover these tax liabilities. That does not seem very sensible, and it will create pressures on the public purse in other areas. We need some common sense—I see the Financial Secretary as the personification of common sense. It is time for the Government to pause the loan charge and think again about the best way forward, which should be fair to the Exchequer but also fair to honest working people who believed they were doing the right thing and have unfortunately—and, for many, unavoidably—been caught up in these schemes.