Victoria Atkins MP

Financial Secretary to the Treasury

Ref: ML.RG.C0080.CM.8.11.22

Dear Victoria,

I am writing to you, further to correspondence I have had with other Ministers, about the Government’s loan charge.

I welcome steps to ensure the tax system is as fair as possible. However, constituents who inadvertently bought into disguised remuneration schemes appear to have been disproportionately targeted over and above those promoting and selling the loan schemes. It’s also been reported to me that for contractors presumed to be self-employed the position was never clear - leaving some open to being manipulated into these schemes. I therefore support calls for a proper review into self-employment and contracting, to provide clarity in both tax and employment law.

My constituents and I also share cross party concern at the retrospective nature of the loan charge payments and the devastating impacts of the policy for thousands of UK families – you will know that it has resulted in the issuing of huge bills, with extreme financial hardship, bankruptcy, family and mental breakdown, and suicide some of the documented outcomes.

I support the many calls to scrap the loan charge entirely – and note that one of your predecessors and current Economic Secretary to the Treasury, Andrew Griffith MP, called for an amnesty in all but the most egregious cases.  If the Government is not prepared to consider that, then the Loan Charge and Taxpayer Fairness APPG, of which I am a member, argues that loan remuneration arrangements should be subject to taxation only from the point of the introduction of legislation, i.e. prospective from 16th November 2017.  The critical point is a solution that is fair to all involved.

To that end, I would be grateful for your response to the tax experts who have developed a proposal for a settlement as a way forward. This would not be intended for individuals who knowingly took a risk with a tax avoidance scheme, but for contractors and freelancers either inadvertently dragged into these schemes or who were inadequately  advised of the risks or material consequences.

I would also encourage you to instigate a proper independent review, and  ideally an inquiry, into the policy, its impact on people mis-sold arrangements, and into the actions of HMRC and HMT in relation to the loan charge. You will be aware that there’s widespread criticism of the previous review, conducted by Amyas Morse and published December 2019, in particular that there was significant input from the Treasury and HMRC, rendering it far from independent, the recommendations were not comprehensive, have not been fully implemented and do not stop loan or other similar arrangements from being offered to unsuspecting taxpayers, and that there remains ongoing problems with clarity and certainty for those potentially impacted. 

I look forward to hearing from you.

Yours sincerely, Caroline