HMRC’s retrospective 2019 ‘Disguised Remuneration Loan Charge’ continues to make headlines across the web (see below). The widely-criticised tax penalises those who entered into so-called disguised remuneration schemes, some dating back as far as 1999. The Revenue has targeted approximately 50,000 people, many of whom entered into the schemes, which took various forms, on their employers’ advice. In fact, some had no choice but to enrol if they wanted to keep their jobs. It was claimed that the loan charge would target wealthy ‘financial services’ professionals who knowingly avoided paying income tax and national insurance contributions by getting paid via a loan (from an ‘umbrella company’), which was paid to them monthly (like a salary) and never intended to be paid back.
In reality, many of those affected are far from wealthy and, thanks to the Revenue’s devious tactics, now face financial ruin. Obviously, some were/are wealthy and may have been deliberately avoiding tax (not a crime), but many were public sector workers (nurses, cleaners etc.) who didn’t even know they were enrolled in a scheme.
Either way, HMRC knew about the schemes and chose not to criminalise them. Those enrolled submitted their tax returns every year and in most cases HMRC signed them off without raising any concerns. To add insult to injury, many contractors ended up paying ‘interest rates’ to the aforementioned umbrella companies so it was only their employers who benefited financially, not them.
If anyone should be held accountable, it should be the dodgy scheme providers, along with employers who took advantage of trusting employees to avoid paying NICs. Except not even, because HMRC failed to condemn them at the time so can’t go looking for its ‘pound of flesh’ now, two decades later. We’ve already written on this extensively, but wanted to publish another article highlighting the devastating effect this unlawful tax is having on people’s lives (see below).
Real world consequences…
Going back to work tomorrow after a suicide attempt a week past Wednesday, dreading it. This may be hard to read for some of you but I’m exhausted trying to hide how I truly feel.— Davie Adam🍀☠️💀🏴☠️ (@DavieAdam1969) August 12, 2019
I know it’s counter intuitive with the #LoanCharge hanging over me but I’m thinking of quitting my contract – I am so anxious and depressed I can’t concentrate at work, relax at home. Life feels bleak to unbearable #STOPTheLoanCharge— Gaynor (@Gina73642894) August 13, 2019
The loan charge is sucking the life from thousands of people like me. No joy, no hope, no future.. this is the reality. #STOPtheLoanCharge— Richard Horsley (@retrotaxvictim) August 12, 2019
Deadline today. Under immense pressure from HMRC to settle today. The stress is unbearable. At my wits end. Don’t know what to do for the best. Why won’t someone stop this madness. #LoanCharge is so unjust.#STOPtheloanCharge— Paul Smeeton (@PaulSmeeton) August 5, 2019
As both a constituency MP and Vice-Chair of the @loanchargeAPPG I’ve seen first-hand the devastating impact that the loan charge has had on individuals & families.— Ruth Cadbury MP (@RuthCadbury) August 12, 2019
That’s why I’ve written to the Chancellor Sajid Javid calling for a delay & independent review into the LC. pic.twitter.com/2pZHSNSknY
Harrowingly, the tip of the iceberg if #LoanCharge is allowed to continue beyond 31st August without the promised postponement. @BorisJohnson @10DowningStreet @sajidjavid you are now in a position to #SaveLives #STOPtheLoanCharge pic.twitter.com/Yhyoc9306V— LowHangingFruit #STOPtheLoanCharge #SaveLives (@fruit_hanging) August 14, 2019
I am 67, looked forward to playing with my grand kids, instead all I do now is stare at the computer, and watch the news, hoping for a glimmer of hope for the rest of my retirement, this is no life, it’s time to #StopTheLoanCharge https://t.co/zrwrX9ee0m— Davedoors (@Davedoors1) August 14, 2019
HMRC are ridiculous. Taxed as staff but no holiday, sickness, pension. Meanwhile public are told that you’re not paying your fair share and senior HMRC pensions dwarf those of the individuals being pursued. Something smells very fishy here and it ain’t fish #STOPtheLoanCharge— S.O.S. #stoptheloancharge (@SammiMckean) August 14, 2019
2+ years ago I felt alone and petrified that I was somehow a criminal now and had NO HOPE! Today I have two amazing organisations @LCAG_2019 and @WTTBigGroup, Over 150 MP’s solidly on side and a new cabinet that I truly believe KNOW THIS IS WRONG! FINISH IT! #STOPtheLoanCharge— James B (@TexanJamesB) August 14, 2019