Oral Answers to Questions

Ruth Cadbury Excerpts

Tuesday 7th September 2021 Commons Chamber

The Chancellor of the Exchequer was asked—

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

1. What recent estimate he has made of the number of people subject to the loan charge who have been declared bankrupt.

[Mr Speaker]

I call the Minister.

[The Financial Secretary to the Treasury (Jesse Norman)]

Good morning to you, Mr Speaker. It is great to be in a Chamber that is 100% full strength after so many months. If I may make a personal note without undue deference, Mr Speaker, I will say that I thoroughly appreciated your remarks about standards within the Chamber.

To date, Her Majesty’s Revenue and Customs has not initiated insolvency proceedings against any taxpayer for a loan charge debt. No estimate can be provided for the number of people who have fallen into debt or who have been declared bankrupt and are subject to the loan charge because, where debts arise, HMRC is not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some may choose to enter insolvency themselves based on their overall financial position.

[Ruth Cadbury]

We know that there are many, many thousands of nurses, social workers and other public sector workers who have been caught up in the loan charge. They took work via agencies that basically told them, “Sign here or you don’t get the work.” Checking to see whether they would be liable for the loan charge was not an option. Last week, the Yorkshire Post reported that a number of former services personnel had been affected and that one is feeling suicidal as a direct result. What does the Minister say to this veteran and the thousands of other public servants whose lives have been turned upside down by this retrospective taxation?

[Jesse Norman]

I thank the hon. Lady for her question. Taxation is often a difficult matter for the relatively small number of individuals who may be affected by particular pressures. Of course the Government recognise and understand that, but it is nevertheless the case—it is indeed a foundational principle of the tax system—that people should be responsible for their own tax returns. If I may, I would like to refer the hon. Lady to the very wise words of the former shadow Chancellor, the hon. Member for Oxford East (Anneliese Dodds), who said in 2018 that

“we would obviously welcome tightening in the area of disguised remuneration schemes…We are concerned that the measures in the Bill do not go far enough…There should be no excuse”—

these are her words—

“for people not to be aware of the situation”.––[Official Report, Finance (No. 2) Public Bill Committee, 9 January 2018; c. 30.]

I am afraid that she was right about that.