Loan Charge

Part of the debate – in the House of Commons at 4:14 pm on 11th April 2019.

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Photo of Ruth George Ruth George Labour, High Peak 4:14 pm, 11th April 2019

Constituents who have come to me are overwhelmingly people with their own businesses who took out a scheme in order to free up more money to invest in those businesses, to employ people and to make sure that that business had a sustainable future. They do not object to the fact that it has, since 2012, been found that those schemes are wrong, but they do object to the fact that they are being sought for payments from before that time. The advice they are getting from the Inland Revenue on settlement figures is extremely late. One of my constituents was informed on Tuesday 2 April that he needed to make a settlement agreement by that Friday, when he was working abroad and had no access to his accounts. That sort of behaviour is simply unreasonable, and no taxpayer should have to accept it.

The Inland Revenue has stated that it does not expect anybody to have to sell their main residence, yet it is requiring taxpayers to seek to take out a large loan or mortgage on their only or main residence. These people are often in their late 40s or 50s, coming to the end of their working life, so they cannot take out such large loans on their property, and if they do they are in danger of defaulting, in which case they will lose the property anyway. I therefore ask the Minister to look at what the Inland Revenue is requiring by way of loans on main properties. Does he stand by the Inland Revenue’s advice that main properties are not to be put at risk?

I also ask the Minister, and those who are supporting people with the loan charge, to look at the case of professional indemnity insurance for the chartered accountants or tax advisers who often gave this advice, and at whether the scheme promoters were covered by the Financial Services Compensation Scheme, because if it was pensions or any other area of financial services, we would be going straight to professional indemnity and to the Financial Ombudsman Service to seek compensation.

The Minister needs to look at the advice that is being given. The Inland Revenue told the Public Accounts Committee two weeks ago, “Among the disguised remuneration users, there are undoubtedly people who have liabilities for years, where under the normal rules we do not now have assessing rights…we have asked those people to settle voluntarily for those years, which they may choose to do so.” Those figures are not divided out and people are not given the opportunity to pay back the loans to the companies that made them. Will he look at that?