MPs Highlight Similarities in Treatment of Loan Charge Contractors and Post Office Scandal by HMRC

HM Revenue & Customs (HMRC) is being compared to the Post Office Horizon IT scandal for its treatment of IT contractors who owe large amounts of unpaid tax due to the Loan Charge policy. The Loan Charge, introduced in 2017, aims to recover £3.4bn in unpaid tax from over 50,000 individuals who participated in loan-based remuneration schemes between 2010 and 2019. Many contractors were encouraged to participate in these schemes by reputable tax advisers and accountants, and some were even told they could only work for certain organizations if they accepted payment in loans. The affected individuals, often referred to as victims of mis-selling, now face six-figure tax bills for participating in schemes they believed to be legal and compliant. HMRC has classified these loans as taxable income, despite never approving of the schemes. The Loan Charge has gained the support of hundreds of MPs who have formed the Loan Charge and Taxpayer Fairness APPG to advocate for those impacted. The comparison to the Post Office Horizon scandal, in which subpostmasters were wrongfully prosecuted after an IT system error, was made during a debate in the House of Commons. MPs expressed concerns about the devastating financial and mental health consequences faced by those affected by the Loan Charge, and called for a fairer approach that holds the scheme promoters accountable.

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