Loan Charge Bankruptcy 2024-02-06
2024-02-06
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
MP expressed concern over the potential impact of the loan charge leading to increased bankruptcy cases.
I am concerned about the potential impact of the loan charge on levels of bankruptcy. In an internal document from HMRC, there were around 100 bankruptcies linked to the loan charge. Can you tell me why this figure was never made public and what the current number is?
I have pushed HMRC for assurances on safeguards against forced bankruptcy due to the loan charge. However, where bankruptcies occurred, they were often due to factors outside the loan charge or individuals declaring bankruptcy voluntarily. If evidence suggests otherwise, I would like to know about it.
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Assessment & feedback
Specific number of current bankruptcies not disclosed
Reiterating Voluntary Declarations
Pushing For Further Evidence
Response accuracy
Q2
Partial Answer
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Context
MP noted concern over the impact statement made by Treasury which claimed no significant effect on family stability, but there have been numerous divorces and suicides.
The original impact statement said the loan charge would not affect family formation or breakdown. Yet we now see countless divorces, mental health issues, bankruptcies, and at least 10 suicides. Why was this statement incorrect, and how can Parliament be misled in such a way?
The House is concerned about suicides related to the loan charge. Independent reviews have taken place, and HMRC provides generous support plans for those in debt. I urge engagement with HMRC to establish reasonable time-to-pay arrangements rather than fearing worst-case scenarios.
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Assessment & feedback
No commitment to new investigation or admitting fault
Redirecting To Engage With Hmrc
Mentioning Independent Reviews
Response accuracy
Q3
Partial Answer
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Context
MP highlighted the negative impact on individuals due to misleading statements made by Treasury regarding family stability.
The original impact statement said the loan charge would not significantly affect families, but there have been many divorces, mental health issues, bankruptcies, and suicides. This shows a gross error in assessment. We need a full investigation into how Parliament was misled on this matter.
We had an independent Morse review in 2019 which led to action. The review has occurred, but I challenge HMRC and listen to concerns from colleagues. If more needs to be done, we will take it, though another review is not necessary as the Government accepted most of the recommendations.
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Assessment & feedback
Refusal to commit to a new independent review
Mentioning Past Morse Review
Response accuracy
Q4
Partial Answer
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Context
MP expressed frustration over Government's approach to the loan charge causing financial ruin for individuals.
The loan charge has become a nightmare for people across the country due to mis-selling and facing severe consequences. The current situation proves the need for reconsideration. Will you agree today to commission a new, independent review?
We had an independent Morse review in 2019 which led to action based on its recommendations. Another review is not necessary as the Government has already taken significant steps following the original one.
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Assessment & feedback
Refusal to commit to a new independent review
Referencing Past Morse Review
Response accuracy