LCAG Media Release 29th January 2019


Three MPs raised the Government’s controversial 2019 Loan Charge policy in the House of Commons today, criticising its retrospective nature and calling for a delay in its introduction.

Former Government whip, Liberal Democrat MP Alistair Carmichael (Orkney and Shetland), Conservative MP Andrea Jenkyns (Morley and Outwood), and Labour MP Janet Daby (Lewisham East) joined a growing list of MPs and peers expressing serious concern about the loan charge, which if it comes in unamended in April this year will force thousands of people into bankruptcy.

The Loan Charge breaks normal legal convention and allows HMRC to go back twenty years, demanding huge tax bills for arrangements that were legal and declared to them at the time.

In Treasury questions today, the Rt Honourable Alistair Carmichael challenged the Government over the clearly retrospective nature of the loan charge which MPs and peers have said undermines the rule of law. Andrea Jenykns MP became the latest Conservative MP to speak out about the Government’s policy, calling for a delay to allow for a genuine review before many people are forced to declare bankruptcy.

Mr Carmichael mentioned oil and gas workers in his constituency saying one of them “now finds himself facing bankruptcy before his twenty-ninth birthday.”

He also challenged the Minister, Mel Stride on the retrospective nature of the loan charge explaining, “[under the Loan Charge] the HMRC are allowed to back to 1999 to look at tax records, including those in closed years” and continued, “if that’s not retrospective, I don’t know what is.”

Andrea Jenkyns called on the Government to delay the implementation of the policy asking, “What assessment has the Chancellor made concerning an immediate suspension of the Loan Charge, and all settlement discussions for an appropriate period of time, to allow the Loan Charge review to be properly conducted, and any recommendations to alter the legislation to be implemented?”

During Topical Questions to the Chancellor of the Exchequer, Janet Daby MP asked, “What action and plans does HMRC have to litigate against those who have disguised remuneration arangements since 2016?”

However, as usual, the Minister responsible, Mel Stride, the Financial Secretary to the Treasury, resorted to HMT spin and refused to alter the policy, despite knowing the effect it will have on people.

Thousands of freelance workers face bankruptcy, anxiety and stress due to the Loan Charge. The victims – who include social workers, teachers, doctors, nurses, oil and gas workers as well as IT contractors – simply followed professional advice and submitted their tax returns every year, with HMRC never challenging them in a timely manner. Yet now they face life-destroying tax bills they cannot pay and cannot fairly appeal.

LCAG questioned 500 of its members about the impact of the Loan Charge and a huge 71% of those facing the Loan Charge said that they will be forced to declare bankruptcy. A shocking 39% – well over a third of all affected – reporting suicidal thoughts and a risk of self-harm.

Three weeks ago, on the 8th January, the Government was forced into accepting a cross-party amendment to the Finance Bill regarding the Loan Charge because it was clear they would lose a vote if they continued to oppose it.  Sir Ed Davey’s successful amendment called for the Government to conduct a review of the policy and to do so before the end of March. However, it is already clear that the Government is refusing to conduct a genuine review and is set to proceed with the Loan Charge and accept the inevitable bankruptcies it will cause.

Opposition to the retrospective Loan Charge has already attracted widespread political support. A total of 118 cross-party MPs, including Conservatives and DUP MPs, have signed an Early Day Motion calling on the Government to ‘revise the legislation to avoid significant damage to independent contractors and freelancers in the UK’. HMRC’s unfair and aggressive pursuit of the retrospective Loan Charge tax has also been condemned in a powerful report published by the House of Lords Economic Affairs Committee on 4th December 2018, which said there is “disturbing evidence” and “reports of increasingly aggressive behaviour towards taxpayers”. The report calls on the Government to reform the Loan Charge, which the Lords Committee declared is “clearly retrospective” and “undermines basic principles of tax fairness and certainty.

Steve Packham, Spokesperson for LCAG said:

“The Loan Charge Action Group are extremely grateful that Alistair Carmichael, Andrea Jenkyns and Janet Daby raised the Loan Charge in the House of Commons and clearly exposed its retrospective nature. We are very pleased that they have called for a delay to the Loan Charge and a genuine review. This is now essential to avoid thousands of bankruptcies and, worse still, some people feeling they have no choice but to take their own lives. Our experience is that people are becoming increasingly anxious and desperate as we approach March and yet even now, the Government are refusing to listen.

“The fact that the Treasury never understood the impact this policy would have is shocking, but they cannot any longer ignore the fact that if it comes in unamended in April, it will cause thousands of bankruptcies which will destroy and actually cost lives. No responsible Government can possibly push ahead regardless of this and Ministers must now listen, or they will be responsible for the damage it does to people”.


Notes to Editors

Media Contact: Mark Sebright – [email protected] / 07988 680796

1. The full questions and answer is here:

2. About the Loan Charge Action Group: The Loan Charge Action Group seeks to raise awareness and reform of the retrospective IR35 tax charge introduced by HM Treasury in the 2017 Budget and build a community where affected individuals can find information and support. The Group does not provide any form of chargeable service or professional advice. Visit

3. LCAG members’ survey: In summer 2018, LCAG surveyed 500 of its members about the impact of the Loan Charge and the following were the responses as to how if was affecting people:

Depression / Anxiety / Mental health impact: 68%
Bankruptcy: 71%
Loss of residence / home: 49%
Divorce / Relationship breakdown: 31%
Loss of career: 30%
Suicidal thoughts / self-harm: 39%

4. House of Commons Early Day Motion 1239: That this House expresses its concern at the 2019 Loan Charge; notes that it is retrospective applying back to 1999; further notes that as a result of the introduction of IR35, umbrella companies were set up and recommended by professional advisers and employment agencies; recognises that the Charge will affect contractors, freelancers and agency workers, including social workers, supply teachers and bank and locum nurses and doctors; notes that employment was not an option and in some cases the company or organisation insisted on those arrangements, including to avoid paying National Insurance; notes that these individuals did not receive sick or holiday pay; believes it is unfair that HM Revenue and Customs (HMRC) are pursuing people who acted in good faith rather than the client organisations, agencies or umbrella companies all of whom benefited significantly; notes that HMRC are aggressively pursuing individuals through Advanced Payment Notices with no independent right of appeal; further believes that the Charge is likely to cause financial distress and bankruptcies, impeding HMRC’s ability to recover these tax liabilities and causing a devastating impact on people; believes that retrospectively taxing something that was technically allowed at the time, is unfair; calls on the Government to revise the legislation to avoid significant damage to independent contractors and freelancers in the UK; and calls for the Charge to apply only to disguised remuneration loans entered into after the Finance Act 2017 received Royal Assent. For full register of MPs supporting Parliamentary motion see

5. Suicide Risk: – HMRC and HMT are aware of the suicide risk being created by the Loan Charge (as reported in the Evening Standard, yet so far have refused to set up a 24 hour helpline for people needing urgent counselling, see .