Government’s promise to deliver justice over Horizon scandal prompts calls for action over Loan Charge
MPs are set to debate the Loan Charge scandal on Thursday 18th January, against the context of the government’s commitment to review and act on the Post Office Horizon scandal.
The debate has been tabled by Sammy Wilson MP, Chair of the Loan Charge & Taxpayer Fairness All-Party Parliamentary Group (APPG), among others.
It follows two letters sent by the APPG to HMRC in December and will give MPs a chance to raise concerns about the Loan Charge scandal, “taxpayers’ rights and the need for reform of HMRC”.
The debate also coincides with the government’s promise to review and act on the Post Office Horizon injustice. It has become headline news again following an ITV drama, aired in early January, which shed light on the story and renewed calls for justice.
At least one tax expert has called on the government to adopt the same approach in addressing the Loan Charge, which they argue has had a similar effect on thousands of contractors.
“If you think the Post Office Scandal is bad…”
Dave Chaplin, CEO of Contractor Calculator and IR35 Shield, took to X (formerly Twitter) to share his thoughts on the similarities between the Loan Charge and Horizon scandals, ahead of the Parliamentary debate.
“If you think the Post Office Scandal is bad, wait until you hear what HMRC did, with the blessing of Ministers, to over 50,000 taxpayers”, Chaplin said, referring to the Loan Charge.
Introduced in 2019, the Loan Charge was intended to recover taxes that were lost to what have now been designated as disguised remuneration tax avoidance schemes.
These arrangements typically saw workers paid via loans, which avoided income tax and national insurance payments. These schemes were often promoted as compliant.
Contractors who received payments like this between 1999 and 2019 are now subject to the Loan Charge – leaving many facing unpayable tax bills.
Chaplin noted: “Some contractors… knew exactly what they were doing, in the early days”. However, the majority “were sucked in” to these arrangements, with “lots having no idea what was going on”, and HMRC has failed to “discern between the two” groups.
At least 10 suicides have been linked to the Loan Charge.
Treasury “shill” behind Loan Charge and IR35
Chaplin offered further criticism, suggesting that “the patterns of behaviour in the Post Office Scandal, Loan Charge Scandal and IR35 are the same”.
He also accused former Financial Secretary to the Treasury, Mel Stride, of being “a shill” who had “pushed the Loan Charge through Parliament” and who “was also responsible for IR35 reform”.
“At the Post Office and HMRC we have allowed them to operate, without sufficient accountability and consequences for their actions”, he said.
Chaplin also encouraged his followers on social media to tune into Thursday’s Parliamentary debate and to “ask your MPs to attend”. “The debate is about HMRC’s abuse of power, which affects you if you are affected by IR35”, he added.
You can watch the debate via the Parliamentary website.
If you’re struggling, you can speak to a Samaritan at any time, any day of the year. Call for free on 116 123, or email jo@samaritans.org.
Happy to see that this issue is finally being taken seriously by the government. I was contacted by HMRC in 2012 regarding an ‘umbrella company’ that I had used in the past. 11 years leter, they still can’t give me the details that my accountant has requested, so that we can settle the outstanding balance. A few years ago we set up a direct debit to begin paying back the shortfall. After three or four payments, HMRC stopped them and have no record of what was taken. Yet I still receive letters threatening me with a prison sentence on a regular basis. Because of this, I’ve been on anti-depressants and my marriage has been at threat for almost a decade. How can a government department that is supposed to assit us, be allowed to do this?