HMRC’s ‘nil-impact’ loan charge assessment discredited by tweeting MPs

Tweets by MPs revealing the harrowing first-hand accounts of Loan Charge contractors have left the credibility of HMRC’s Disguised Remuneration ‘impact assessment’ in tatters.

Published in 2017, HMRC’s assessment stated that the DR “package” containing the charge “is not expected to have a material impact on family formation, stability or breakdown.”

But three successive tweets yesterday by MPs on the Loan Charge and Taxpayer Fairness APPG reveal the exact opposite -- an abundance of breakdown, instability and family implosion.

'I wish I didn't wake up, HMRC has destroyed my family'

Having called contractors caught by the loan charge to send them evidence of how the HMRC policy has impacted them, the cross-party parliamentary group quoted one directly:

“I am on medication for depression. I constantly worry about the Loan Charge. I go to bed and wish I didn't wake up.

“I will end up bankrupt and selling my house. HMRC seem set on a course of action that will destroy me. It has already destroyed my family.”

'Stress conditions from DR-related matters'

The MPs then quoted a second contractor, facing an even bigger liability due to the loan charge – more than £312,000.

“The personal impact continues to be immense, overshadowing everything else.”

The ‘call for evidence’ form completed by the contractor, and screenshotted by the MPs in the tweet, adds: “I was completely without medical conditions [before the loan charge].

“But now I have hypertension and high blood pressure purely down to the stress of DR-related matters. My general attitude to life has had a nosedive and yes, I've on occasions contemplated suicide.”


Quoting a third contractor, the MPs tweeted: “It has caused [me] mental health issues, depression and anxiety.

“This charge is totally unfair when we [were] assured the payment system was legal only to find the law changed. I have had suicidal thoughts, as bankruptcy is possible”.

On his feedback form, the contractor added that on top of his “physical and mental wellbeing” suffering, the loan charge put a “strain on my marriage, and relationship with my family.”

'You really should consider our proposal'

Sarah Gabbai, a tax lawyer at McDermott, Will & Emery reflected on the contractors’ first-hand accounts: “No tax system should be allowed to destroy people’s lives like this. Ever.”

The lead author of a proposal to achieve “fair resolution” for individuals caught by the loan charge, Gabbai has messaged Treasury minister Lucy Frazer directly on Twitter.

“You really should consider our proposal,” Gabbai wrote. “[Or] please consider passing legislation to write off the tax debts of those caught up in…DR scheme[s]”.

'Dire consequences'

But the minister did not reply. “It is deeply disappointing that you have…ignored the proposal for a resolution put forward by tax sector professionals,” the Loan Charge Action Group (LCAG) tells Ms Frazer in a new letter.

The campaigner-turned-support group adds: “[These professionals] can also see the dire consequences if this unfair policy is not amended.

“This was a direct approach to you personally from a group of senior professionals -- including fellow QCs, yet you failed to reply, instead asking [HMRC CEO] Jim Harra to respond.

“The letter was very clearly addressed to you and we urge you to show some leadership by agreeing to engage with these professionals, and to take responsibility for the Loan Charge yourself.”

'Please stop ignoring this'

In their letter to Ms Frazer, LCAG’s Steve Packham and Andrew Earnshaw ask the minister to meet with them to discuss how “bankruptcies, breakdowns and…more suicides” can be avoided.

Consequences totally at odds with HMRC’s 2017 impact assessment of the policy, such ‘bankruptcies, breakdowns and…more suicides” are currently “inevitable” without action, the two campaigners say.

Julia Kermode, boss of IWORK agrees Ms Frazer can “help stop this already disastrous policy getting even worse,” and has told her so in a tweet.

“Please stop ignoring this,” Ms Kermode appealed to the minister in a message.

“Please read [these first-hand accounts by contractors showing]…the very real and totally devastating impact of the loan charge.”

'I exist to pay off these debts'

Ms Frazer has also been reached out to by the Loan Charge and Taxpayer Fairness APPG, which has invited her to attend a two-hour “open” Q&A session on the loan charge. They wanted the session to be held in May.

“I exist to pay off these debts,” the APPG tweeted, directly quoting another contractor caught by the charge. “I cry daily and suffer panic attacks. My life and that of those dependent on me has changed forever.”

Mr Packham and Mr Earnshaw of LCAG told Ms Frazer: “As the responsible minister [it falls to you], to properly look at the whole Loan Charge scandal again and to seek a resolution that avoids the serious consequences of doing nothing.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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