Why the loan charge would make a harrowing but unforgettable TV drama: Greg Wright

This is fact, not fiction, as anyone who listened with horror to the debate about the loan charge can testify. It was Parliament at its best, with eloquent, dignified contributions from across the political divide. For probably the first time, Sir Jacob Rees-Mogg and John McDonnell sang from the same hymn sheet.

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. The Government said “significant changes” were made to the charge following a review in 2019, but MPs still believe the policy is flawed because HMRC is targeting the wrong people.

To quote DUP MP Sammy Wilson: “It seems that HMRC is going after those whom it regards as easy targets. The promoters of the scheme have not paid one penny, despite the fact that they have made hundreds of millions of pounds from the schemes, have mis-sold them and have disappeared when there is any attempt to get at them.”

Liberal Democrat MP Sarah Green said a constituent in “great distress told me how she made the difficult decision to have an abortion, based on concerns about affordability stemming from the loan charge.”

She added: “Combined with the number of suicides that have taken place, this paints a truly harrowing picture of the impact this unfair charge is having...With over 50,000 people directly impacted and the tragic death of 10 people, it is vital that we do everything we can to find a fair and final resolution to the loan charge scandal. To gain public trust, far greater transparency from HMRC and the Treasury is needed.”

The response from Nigel Huddleston, the Financial Secretary to the Treasury, went down like a lead balloon. He said HMRC does seek, where possible, to collect revenue from employers and later told MPs: “I don’t believe the case has been made for another review, I stand ready always to listen but that review (by Lord Morse) stood up well … it was thorough, significant and 19 of the changes were implemented, so a hugely impactful review.”

A General Election is looming and Labour is committed to taking a different approach. Shadow Treasury minister Darren Jones warned that the Government’s handling of the loan charge means that ordinary people who are victims of mis-selling are suffering financial ruin and personal harm. The outrage which followed the debate suggests the tide might be turning. Tragically, any action to scrap or modify this deeply flawed policy will not ease the anguish of 10 grieving families.

Greg Wright is the deputy business editor of The Yorkshire Post

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