Contractors asked to fill out Loan Charge APPG survey on affordability

Loan Charge contractors are being asked to complete a survey on the affordability of paying what the taxman claims they owe him.

Open for responses until 11.45 pm on Friday April 23rd, the survey has been posted by the Loan Charge APPG and contains 29 questions.

Explaining the need for the survey, MPs on the all-party parliamentary group said in a tweet that they wanted to be able to have a “clear picture” of the situation such contractors are in.

'HMRC hasn't published anything'

A campaigner agrees, telling ContractorUK yesterday that the survey is a must because “HMRC hasn’t published anything” about the people still facing the department’s charge.

“There’s no current picture of the situation…and MPs don’t know”, the campaigner said. “So it’s vital to get this detail [from taxpayers] to get a good sense of where the issue is now.”

But Ruth Cadbury, a Labour MP, does know that still not a single promoter of a disguised remuneration scheme affected by the loan charge has been prosecuted.

'Too little, too late'

She said: “Whilst ordinary people who are victims of mis-selling face ruin and bankruptcy, the government has so far done too little, too late, to go after those who promoted the schemes.”

Ms Cadbury highlighted the financially perilous position of scheme users (“the wrong target”) as opposed to scheme promoters at the Finance Bill’s committee stage on Tuesday.

But a real-world example of the loan charge’s impact actually came before, at the weekend, when taxpayer ‘Jeanette’ revealed she had been chased by HMRC for a six-figure sum.

“Totally life-changing,” she told Radio 4, recalling that she used a scheme on the recommendation of an award-winning, UK regulated accountancy tax specialist. “Horrific.”

'Homeless'

In a statement read out on-air, HMRC said it reached “affordable” and “manageable” payment plans, and further insisted that nobody had to sell their home to pay the loan charge.

But Jeanette scoffed at the latter half of the statement, saying she became “homeless” precisely because HMRC demanded the loan charge and so her home was sold as a result.

“The loan charge scheme was vigorously promoted by enablers. They walked away scot-free but they left devastation in their wake,” Dame Margaret Hodge MP said this week.

“I understand from the APPG on the loan charge that seven… people [were] driven to suicide because they were conned by enablers into participating in a scheme that later unravelled.”

'Truly shocking'

The former Public Accounts Committee chair added that such loss of life is “truly shocking” and to make promoters accountable, she wants a new ‘double-reasonableness’ test introduced.

Graham Webber, a loan charge expert, took to LinkedIn to say that the Labour MP for Barking was an inappropriate person to advise on avoidance, due to her actions as PAC chair.

But to the idea of HMRC “chasing promoters,” he says “yes please,” partly on the basis that is unjust that “individuals [are] being harried and bullied for the errors of promoters”.

'Make your voice heard'

The questions of whether contractors need to sell their home to pay HMRC, and whether contractors face bankruptcy are among those posed in the Loan Charge APPG survey.

“All Loan Charge victims please complete…[this] by Friday 23rd April,” says lobbyist Loan Charge Action Group. “Make your voice heard by MPs and government.”

But on behalf of the government this week, HMT’s Jesse Norman sounded unmoved, saying, “It’s all very well to complain about the loan charge, but these are highly contrived schemes.”

'Patronised'

“No Government should wish to weaken that important principle that people are responsible for their own tax,” Mr Norman added, rejecting the two Labour MPs who were seeking amendments.

“People, from whatever walk of life, are perfectly competent -- they do not need to be patronised by Labour MPs -- at working out when something looks too good to be true.

“That is why so many -- such a high percentage; well over 90% of people -- do manage to work out what is too good to be true and behave on that basis.

'HMRC working as hard as it can'

“To suspect otherwise,” continued the Treasury minister, “when HMRC is absolutely working as hard as it can to make sure that the truth is out there and well understood, and is closing down opportunities for misleading advertising, in a recent initiative with the Advertising Standards Authority and a whole host of other things, is completely wrong.”

But since his comments, the Loan Charge APPG has uploaded documents appearing to prove the minister wrong in his implication that it is easy to spot DR schemes.

“Here’s one of many examples of how this simply isn’t the case,” the MPs said, citing a promoter’s brochure featuring “a leading tax counsel’s opinion” as one of its 10 compliance checks.

'Total compliance'

Reflecting on the professional-looking brochure, which talks of "total compliance," being HMRC “safe” and offering customers “peace of mind,” the APPG said: “[This is] how so many people have been mis-sold and misled into using such schemes.”

To complete the MP group’s survey, please visit here but be aware that the online form can only be filled in once, and that all responses can only be left anonymously.

The MPs said that responses to the survey, which also asks if covid-19 and IR35 reform has impacted the participant’s income, will contribute towards the APPG’s “understanding of developments related to the loan charge,” meaning the answers will be used to inform the group’s future campaigning.