Thousands of families face 'never ending nightmare' due to loan charge, Treasury is told

The Loan Charge Action Group (LCAG) has written to the two key Treasury Ministers who will have responsibility for the loan charge in the reshuffled Government under new Prime Minister Liz Truss.

The letters from LCAG urges both Ministers to “stick to their convictions” and agree to review and resolve the loan charge and work with campaigners and sector professionals to do so. The loan charge was designed to tackle tax avoidance schemes where individuals receive income in the form of loans that are not repaid to avoid income tax. Critics believe the loan charge is a flawed and punitive policy. Opponents of the loan charge have included the Rev Richard Coles, the broadcaster and retired priest, who called on the Tory party leadership contenders to find a resolution to the loan charge as an urgent priority “before more families are destroyed”.

A spokesman for the action group said: “Both the new Financial Secretary to the Treasury, Andrew Griffith and the Economic Secretary to the Treasury, Richard Fuller, have expressed concern about the loan charge and HMRC’s approach to people facing it. Mr Griffith has been an active member of the Loan Charge and Taxpayer Fairness All-Party Parliamentary Group (APPG) and in a parliamentary debate called for an amnesty for loan charge victims.”

Spokesperson for the Loan Charge Action Group, Steve Packham, said: "We are heartened that at last we have ministers in the Treasury who have spoken up against the dangerous loan charge and criticised the way HMRC have behaved.

“We urge both Andrew Griffiths and Richard Fuller to have the courage of their convictions and to act to review and resolve the whole loan charge scandal.

“We also hope, to quote the Economic Secretary to the Treasury, Richard Fuller that we will now see Treasury Ministers “running the show“, not HMRC.”

Mr Packham added: “We hope to be able to engage with the Treasury now to find a way out of the never ending nightmare for thousands of UK families and also a way to allow the Government to move on and focus on the cost-of-living crisis and the economy, to which freelancers, contractors and company directors make a huge contribution.”

The new Prime Minister, Liz Truss, was questioned about her stance on the loan charge at a hustings event hosted by Croydon Conservatives.The questioner highlighted the reports of suicides linked with the policy and asked Ms Truss if she would commit to a “genuinely independent review” and resolve this issue before more people take their own lives.She said: “It is appalling to hear about that and the way the whole situation has been handled has been very poor in my view and we’ll look at what we can do on that specific issue.”

The Treasury declined to comment in response to the LCAG’s letter.