LCAG Press Release 7 September 2018


“Broken promise on National Insurance is more evidence of the Treasury’s war on the self-employed”

Loan Charge Action Group


Self-employed people, business groups and opposition MPs are in uproar at the news that the Government has broken a clear promise on National Insurance, which the Loan Charge Action Group (LCAG) has said is more evidence of the Treasury’s “war on the self-employed”.

The Chancellor had promised to cut class 2 National Insurance Contributions (NICs) giving 3.4 million self-employed workers an extra £130 in their pocket, something which small business groups had welcomed and with self-employed people having to fund their own sick and holiday pay unlike employed people.

The Chancellor had previously said the Government was “committed to abolishing Class 2 NICs to simplify the system” yet now this move has been permanently shelved. Yet at the same time, the Treasury and HMRC slash tax for large companies and fail to clamp down on corporate tax avoidance, but are aggressively and unfairly pursuing self-employed people, including through the Loan Charge and other ill-considered IR35 tax changes.

This news also follows a survey by cloud accounting company FreeAgent of 600 UK freelancers and small business owners, a massive 73% of respondents said they believed their health had been put under strain at some point because of running their own business . The poll revealed that one in ten respondents (10%) felt only their physical health had been adversely affected from running a business, while a quarter (25%) said that it was only their mental health had been impacted. In addition, more than a third (38%) of respondents said that they believed both their mental and physical health had been put under strain.

This follows LCAG’s own member survey that shows that the Loan Charge is causing depression, anxiety, or other negative mental health consequences to 68% of those affected, with 51% facing bankruptcy, 49% losing their home. A shocking one in every four Loan Charge victims has experienced suicidal thoughts, something HMRC has brushed under the carpet.  With the Loan Charge Action Group having to field calls from suicidal people, they asked HMRC to set up a 24 hour helpline, yet HMRC failed to do this and only offered people help to “settle their tax affairs” during office hours!

84 MPs have signed a motion in Parliament protesting about the Loan Charge and urging change so that it no longer applies retrospectively .

Richard Horsley, Spokesperson for LCAG said:

“The broken promise on National Insurance by the Treasury is their latest attack on self-employed people in what feels like a war on the self-employed.

“It seems that this Government is interested only in unfairly collecting tax from self-employed people, in this case failing to cut and simplify National Insurance. This follows the introduction of the unfair Loan Charge, which will force thousands of people into bankruptcy and into losing their homes, so the evidence is mounting to show how little they care for the self-employed, yet continue to favour huge companies and fail to tackle corporate tax avoidance.

“We urge all MPs to stand up for self-employed people who contribute enormously to the UK economy every year and we urge Conservative MPs who understand and support self-employment to campaign for the scrapping of the Loan Charge to avoid huge damage to contracting and self-employment in the UK”.

Notes to Editors

Media Contact: Mark Sebright – [email protected] / 07504 042613

  • 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 HMG 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
  • About the Loan Charge: HM Govt has nasty surprise in store for anyone miss-sold an Employment Arrangement involving remuneration through ‘loans’ next April in the form of the 2019 Loan Charge. Everyone who has ever been employed through a loan scheme structure will be hit with a retrospective charge in the 2018-19 tax year.
  • 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:
Outcome Percentage
Depression / Anxiety / Mental health impact 68%
Bankruptcy 71%
Loss of residence/ home 49%
Divorce / Relationship breakdown 68%
Loss of career 30%
Suicidal thoughts/ self-harm 31%
  • The Early Day Motion states: “This House recognises that the (Loan) 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… believes it is unfair that 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…. with no independent right of appeal; further believes that the Charge is likely to cause financial distress and bankruptcies, and believes that retrospectively taxing something that was technically allowed at the time,  is unfair”.