HMRC’s assessment of ‘zero impact’ loan charges discredited by MPs tweeting

Tweets by MPs revealing the harrowing first-hand accounts of loan-charging contractors have left the credibility of HMRC’s disguised pay ‘impact assessment’ in tatters.

Published in 2017, the HMRC assessment said the DR “package” containing the charge “is not expected to have a significant impact on the formation, stability or breakdown of the family”.

But three successive tweets yesterday from MPs on the APPG on loan fees and taxpayer fairness reveal the exact opposite – an abundance of breakdowns, instability and family implosion.

“I wish I hadn’t woken up, HMRC destroyed my family”

After calling the contractors affected by the loan charges to send them evidence of the impact of HMRC policy on them, the all-party parliamentary group quoted one directly:

“I’m on medication for depression. I constantly worry about loan fees. I go to bed and wish I didn’t wake up.

“I will end up going bankrupt and selling my house. HMRC seems determined to follow a course of action that will destroy me. It has already destroyed my family.

“Stress Conditions Related to R&D”

MPs then cited a second contractor, who faced even greater liability due to loan fees – over £312,000.

“The personal impact continues to be immense, eclipsing everything else.”

The ‘appeal for evidence’ form completed by the contractor and captured by MPs in the tweet adds: ‘I was completely without medical conditions [before the loan charge].

“But now I suffer from hypertension and high blood pressure only due to the stress of DR issues. My general attitude towards life took a nosedive and yes, I sometimes contemplated suicide.


Quoting a third contractor, MPs tweeted: “This has caused [me] mental health issues, depression and anxiety.

“This charge is totally unfair when we [were] assured that the payment system was legal only to find that the law had changed. I had suicidal thoughts, because bankruptcy is possible”.

On his feedback form, the entrepreneur added that in addition to his suffering “physical and mental well-being”, the loan fees were “putting a strain on my marriage and my relationship with my family”.

“You really should consider our proposal”

Sarah Gabbai, tax attorney at McDermott, Will & Emery, reflected on the entrepreneurs’ testimonials: “No tax system should be allowed to destroy people’s lives like this. Already.”

The lead author of a proposal to reach a “just resolution” for those targeted by the loan charges, Gabbai messaged Treasury Minister Lucy Frazer directly on Twitter.

“You really should consider our proposal,” Gabbai wrote. “[Or] please consider passing legislation to cancel the tax debts of those caught in… the DR scheme[s]”.

‘Disastrous consequences’

But the minister did not respond. “It is deeply disappointing that you have … ignored the proposed resolution put forward by professionals in the tax industry,” the Loan Charge Action Group (LCAG) tells Ms Frazer in a new letter.

The activist-turned-support group adds: “[These professionals] can also see dire consequences if this unjust policy is not changed.

“This was a direct approach to you personally from a group of experienced professionals – including other QCs, but you did not respond, instead asking [HMRC CEO] Jim Harra to answer.

“The letter was very clearly addressed to you and we urge you to show leadership by agreeing to engage with these professionals and assume responsibility for the loan fees yourself.”

“Please Stop Ignoring This”

In their letter to Ms Frazer, LCAG’s Steve Packham and Andrew Earnshaw ask the minister to meet with them to discuss how “bankruptcies, breakdowns and…more suicides” can be avoided.

Consequences completely at odds with HMRC’s 2017 policy impact assessment, such ‘bankruptcies, breakdowns and… more suicides’ are currently ‘inevitable’ without action, say the two campaigners.

Julia Kermode, boss of IWORK, agrees that Ms Frazer can “help prevent this already disastrous policy from getting worse”, and told her as much in a tweet.

“Please stop ignoring this,” Kermode told the minister in a message.

“Please read [these first-hand accounts by contractors showing]…the very real and utterly devastating impact of borrowing costs.

“I exist to repay these debts”

Ms. Frazer was also contacted by the APPG on Loan Fees and Taxpayer Fairness, who invited her to attend a two-hour “open” question and answer session on loan fees. They wanted the session to be held in May.

“I exist to pay off these debts,” the APPG tweeted, directly quoting another contractor caught by the prosecution. “I cry every day and have panic attacks. My life and the lives of those who depend on me have changed forever.

Mr Packham and Mr Earnshaw of LCAG told Ms Frazer: “As responsible minister [it falls to you]to properly re-examine the whole loan fee scandal and seek a solution that avoids the grave consequences of doing nothing.

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