Finance (No.2) Bill

Written evidence submitted by a person wh o wishes to remain anonymous (FB19 )

This has been a brutal few years for my family and my children and I’d like some privacy as I face the breakup of my marriage, the loss of my home and impending bankruptcy. Please do not publish or include any personal details relating to this submission.

Government and society demonise tax avoiders , quite often avoidance is confused with evasion (which is illegal). A mistake I made years ago has had life changing consequences.


I would like to make representation to the Committee in relation to the proposed 2019 Loan Charge.

· The 2019 Loan Charge could be an opportunity to bring to a close the many years of uncertainty experienced by taxpayers who used schemes on the advice of professionals. At present, the legislation does not offer that finality.

· The 2019 charge should close all years in question to bring fina lity to both taxpayers and HMRC, a llowing taxpayers to get on with their lives and HMRC to direct resources to other tax-raising challenges.

· The 2019 Loan Charge should offer a simple flat-rate on the loan amounts (say 30%) and long-term Time To Pay (TTP) arrangements that will maximise the tax take and minimise tax payer insolvency.

· The 2019 Loan Charge should be modified to recognise that the impact on many taxpayers will be extreme hardship and bankruptcy.

· HMRC state they are allowing users to settle their affairs , however the amounts and time to pay inflexibility will cause me bankruptcy and therefore HMRC will not allow me to settle.

· I face ruin as a result of advice taken from professional accountants in good faith and by a tax system that was slow to react and which I cannot challenge. I am not a criminal and I want a reasonable end to this that allows me to pay tax without ruining my life.

· The stress of the past few years and the worry caused by my impending insolvency that will be caused by the 2019 Loan Charge has seen my family broken, my marriage come to an end and my decent into mental illness. I am currently under psychiatric care. I

· I will be unable to work in my industry once I have been bankrupted. This is a blow, which, in my 50s, I will be unable to recover from.

· HMRC allowed schemes to run for many years without challenge. They are targeting loans up to 20 years ago. Seeking to claw back disputed tax in one tax year is unfair and does not recognise HMRC’s complicity in allowing these schemes to flourish.


Many years ago, on the advice of an accountant, I signed up for what I believed was a legitimate UK based Umbrella scheme. It was backed by QC opinion and my accountant assured me it was legal .

HMRC was aware of this, and other, schemes as it was declared under DOTAS but did nothing to challenge it thus giving tacit approval. Scheme promoters often misled their clients using accountants to market schemes, declarations of HMRC compliance and published QC opinion.


We are all complicit in the result of these schemes - HMRC, the scheme promoters and myself - however, it is I who has faced years of uncertainty, depression, marriage breakdown and the looming loss of my home and bankruptcy.  I have three kids who have seen their father descend into mental illness and their parent's marriage founder on the stress caused by years of slow HMRC progress. You may see tax avoidance as an ‘evil’ to be destroyed, but the price HMRC is exacting from me and my family is too high. I want this nightmare to end.

The Government policy paper states:

The government anticipates that some of these individuals will become insolvent as a result.

While also stating:

This package is not expected to have a material impact on family formation, stability or breakdown.

It has , and will ha ve , a material impact on my family and me .

The proposed 2019 Loan Charge.

In 2019 the loan charge will be introduced which will treat all Loan amounts as earnings for that year and require a tax payment. This charge can go back up to 20 years and require individuals to pay ruinous sums in one tax year.

Many of us impacted worked as IT specialists, we do not earn large amounts and the sums involved are many times more than our annual salary. This is not recognised in the legislation, which simply acknowledges " individuals will become insolvent as a result .

To make matters worse, the 2019 charge does not bring any fin ality to the years in question; they remain ‘open’ leaving taxpayers in a state of on-going limbo. The only finality available to me, at present, is bankruptcy.

Fixing the problem. Change the legislation.

There is an opportunity here to address the may open years by  applying a flat one-off percentage charge , say 30%, that closes all the years in question.   HMRC would allow extended Time To Pay arrangements  to recognise that the retrospective nature and large impact of this charge will cause immediate hardship.  Closing all the years impacted by the charge would give finality to the impacted taxpayers  allowing them to recover.  Further, it would relieve pressure on HMRC and their on-going investigations into multiple schemes.

Why not settle?

Like many, I cannot settle before the charge is introduced simply because I do not have the means to make the settlement payment. HMRC ignored the schemes for years, and then let investigations drag on, but it is now expecting me to pay in 12 months an amount that would take many years to earn.  As I can’t pay the amounts of my settlement I am unable to settle.


I urge you to see past the glib ‘tax avoiders can afford it’ hype and to recognise that this will ruin many as a result of taxpayer naivety, promoter’s mendacity, and HMRC and previous government failings.  There is an opportunity to raise a one off flat-rate levy to close all years in question and let us get on with our lives .

Whatever you do, none of this will bring my family back, but I’d like an opportunity to rebuild my life and release myself from the past few years stress and mental decline.

The 2019 Loan Charge, as it stands, will make me , and many others, insolvent.

I urge you to examine the proposed legislation with vigour and compassion and to take advice from those representing groups of individuals impacted by this poorly formed bill and to consider the many professional bodies that have requested change to the bill in its current form. There is an opportunity here to end this nightmare once and for all in a fair way.

January 2018


Prepared 10th January 2018