I am grateful to be able to contribute to this debate on an issue that affects many of my constituents. I am pleased to follow Sir Mike Penning. I congratulate Ross Thomson and other colleagues who bid for this debate, and I thank the Backbench Business Committee for affording the time for it. I commend the leadership of the all-party group and thank the hon. Gentleman for his excellent opening speech. I wish to concentrate on relaying a few constituents’ comments to those on the Treasury Bench, to show the strength and depth of feeling on this issue. They speak much more effectively for themselves than I could do on their behalf.
Marc and his partner John wrote to me to express their concerns. For them, the main issue is the retrospective aspect of the legislation, which stretches back over 10 years, yet the schemes were allowed to operate with no notification to members at the time. They fear the knock-on effect of bankruptcy to contractors, which means Marc will fail credit checks and is unlikely to work in financial sector ever again.
Another constituent, Vladimir, says his loan provider shared his DOTAS number with HMRC every year and disclosed the promoter name and the benefit in kind that the loan was providing him. Similarly, Daniel says that the loans he received were all disclosed on his tax returns.
“As I moved from permanent to contracting I used an agency ‘Aston Mae’
who advised me about the benefits of using a limited company or using an LLP. I also used a UK Chartered Accountant who was fully aware of the LLP I was working for.”
Amjad got in touch to say that
“this issue has taken over my life since I received the letter from HMRC last August”,
and makes the same point about fully declaring.
Another constituent who is facing serious trouble, Rehan, wrote,
“on a personal level, the threat of the Loan Charge has made me incredibly stressed and physically unwell”.
Like many in his position, Todd contends that
“there was nothing ‘disguised’
about the arrangements. Taxpayers described in detail exactly what their tax arrangements were under DOTAS.”
Another constituent, Abdul, said that
“if the schemes have always been defective, why did HMRC not write directly to affected individuals and advise them of this?”
Richard got in touch and what he said echoes the previous point. He said:
“HMRC and the Treasury say these arrangements are ‘defective’
and have ‘never worked’. Yet, not once did HMRC communicate that they believed the scheme was ‘defective’
or ‘never worked’”,
and that means he is now liable for more than £200,000.
“It makes my blood boil when I hear ‘you should have known better’. No one told me! I am not an expert on tax and am risk averse, I would not have entered into the arrangement if I even had a sniff that it was not legal. I have already had to sell my house to pay the first lot of APNs which came through and don’t have any savings or a home.”
The solid theme of frustration, confusion and bleak despair runs through every e-mail, letter and meeting I have had on this issue. HMRC and the Minister keep saying that this change is not retrospective, that the average amount is £13,000 and that everyone knew what they were doing. Clearly, that is not the case, and it has been empathically contradicted by my constituents.
In conclusion, I thank the Loan Charge Action Group and its secretary, our former colleague Greg Mulholland, for their work on this issue. Three recommendations from the group’s report stand out for me, and they are certainly reasonable recommendations, as several colleagues have already said: first, the request for a six-month delay to the loan charge; secondly, a 24-hour HMRC-funded mental health helpline, to help to prevent more suicides; and finally, a full and proper review led by an expert tax judge. I look forward to the Minister’s response. Given the unanimity of the opinion in the Chamber so far and the number of compliments that the Minister has been paid by so many colleagues from all parties, my hopes have been raised.