Commons Sense

House of Commons · Ministers' Questions

Loan Charge: Bankruptcy

Tuesday 7 September 2021 · 5 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 5 Not answered 0

Key points

  • Ruth Cadbury questioned the Minister about the impact of the loan charge on nurses, social workers, and a veteran's mental health.
  • The Minister responded that individuals should take responsibility for their tax returns and highlighted a thorough review by Sir Amyas Morse.
  • HMRC has put extra care and support in place for people affected by the loan charge, with no insolvency proceedings initiated against taxpayers for loan charge debts.

Topics (select to filter)

Questions & Answers

Q1 Ruth Cadbury Lab Brentford and Isleworth
NHS Taxation Veterans
Context

The loan charge has affected many people, including public sector workers who were misled into signing up for schemes. A Yorkshire Post report highlighted the distress of a former service personnel feeling suicidal.

Question

There are thousands of nurses and social workers caught in the loan charge due to misleading information from agencies. One veteran is reported to be suicidal as a result. What does the Minister say to this?

Answer from Jesse Norman

Taxation can be difficult for individuals affected, but people should take responsibility for their tax returns. The former shadow Chancellor acknowledged that there was no excuse for people not to be aware of the situation.

Partly answered

Not addressed: Did not directly address the veteran's distress or provide additional support measures

How: Referenced Previous Statements

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Q2 Ruth Cadbury Lab Brentford and Isleworth
Taxation
Context

Ordinary people who were misled into schemes are now suffering financial ruin and personal harm due to the loan charge. There have been harrowing accounts of individuals pushed to extreme measures.

Question

Ministers heard about severe cases where people's lives were turned upside down by the retrospective taxation and tragic outcomes like suicides. A new approach is needed urgently. Will the Treasury review the loan charge scheme?

Answer from Jesse Norman

HMRC takes these cases seriously and has put extra care in place for those affected, including following Sir Amyas Morse's thorough review. The Labour party did not oppose this policy during its passage through Parliament.

Partly answered

Not addressed: Did not commit to a new review of the loan charge scheme or address urgent need for changes

How: Cited Previous Reviews, Referenced Other Mps

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Q3 James Murray Labour (Co-op) Ealing North
Taxation
Context

Ordinary people were misled into schemes and the loan charge became a retrospective piece of legislation. HMRC's current approach is not adequate.

Question

Both sides agree that ordinary people were duped, making this a retrospective piece of legislation. The shadow Minister approached this reasonably, asking for a review of HMRC's approach to prevent further harm.

Answer from Jesse Norman

HMRC has put extra care and support in place for people affected by tax issues. No insolvency proceedings have been initiated against taxpayers for loan charge debts, showing careful handling of this issue.

Partly answered

Not addressed: Did not commit to reconsidering HMRC's approach or address the retrospective nature of legislation

How: Cited Existing Support Measures

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Q4 Peter Bone Con
Taxation
Context

HMRC provided misleading information and signed off on schemes that are now being pursued retroactively. The chief executive tried to obtain legal analysis but with little success, raising questions about the legality.

Question

People were misled into schemes based on HMRC's initial approval and regularisation of payments through contracts. How can it be right to pursue people for things they were led into?

Answer from Jesse Norman

HMRC ended relationships with contractors using disguised remuneration when discovered. There is no evidence of HMRC signing off on or approving any schemes positively, though they may have signed off tax years.

Partly answered

Not addressed: Did not address the legal standing concerns raised about retrospective pursuit of previously approved schemes

How: Referenced Actions Taken

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Q5 Sammy Wilson DUP East Antrim
Employment
Context

The loan charge has resulted in significant financial distress for many individuals, with some facing bankruptcy. An estimate is needed to understand the scale of this issue.

Question

What recent estimate has been made regarding the number of people declared bankrupt due to the loan charge?

Answer from Jesse Norman

No estimate can be provided for the number of people declaring bankruptcy or falling into debt from the loan charge due to varying creditor involvement. HMRC has not initiated insolvency proceedings against taxpayers for loan charge debts.

Partly answered

Not addressed: Did not provide an estimate on bankruptcies related to the loan charge

How: Cited Lack Of Specific Information

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