The “Next Horizon scandal” is the HMRC tax enforcement connected to ten suicides
The “Next Horizon scandal” is the HMRC tax enforcement connected to ten suicides. The controversial “loan charge,” which affects thousands of workers, is called for to end by MPs.
The “next Horizon scandal” is a tax crackdown on independent contractors and agency workers connected to 10 suicides and one abortion.
On Thursday, members of parliament demanded an end to the contentious “loan charge” levied by HM Revenue & Customs. This tax levy affects 60,000 people, including IT contractors, teachers, and nurses, and leaves them with enormous bills.
Self-employed people and contractors signed up for heavily advertised tax-saving plans, which meant they received loans for pay.
Because they were compensated through loans, they were exempt from paying national insurance and income tax.
But in 2017, HMRC required individuals who made use of them to pay taxes on all of the loans they had taken out at once.
Some incurred six-figure back tax payments at the highest 45 percent rate since they had been using the loans for an extended period of time.
The accusation has been officially connected to ten suicides. On Thursday, it was revealed that one victim had decided to have an abortion rather than become a parent because she couldn’t afford to raise a child with the tax dispute looming large over her head.
Compared to the four suicides connected to the Post Office Horizon controversy thus far, it is more than double.
During the House of Commons debate on the charge, Members of Parliament accused HMRC of ignoring the problem and accusing the governments of turning a blind eye to the victims of the loan charge schemes because they were “easy targets” rather than going after their “unscrupulous” promoters.
East Antrim MP for the Democratic Unionist Party Sammy Wilson declared, “We are looking at another Horizon scandal.”
“This is a classic example of the state abusing its power through aggressive tax collection,” stated Jacob Rees-Mogg, the Conservative MP representing North East Somerset.
Sold from the year 2000, the loans were crafted to evade taxes and were justified to the contractors as according to UK legal regulations.
It is even alleged that some employees were coerced into these programmes by their bosses.
Sarah Green, the Liberal Democrat MP for Chesham and Amersham, stated that one of her constituents underwent an abortion due to financial concerns around having a child. The Conservative MP for Chingford and Woodford Green, Sir Iain Duncan Smith, charged that HMRC was acting “virtually impunity.”
“There is a growing body of evidence which shows that contractors and freelancers across a variety of sectors from IT to health and social care were either unintentionally dragged into these schemes or were inadequately advised of the risks, and are now facing unaffordable and life-changing tax bills,” stated Sarah Gabbai of the law firm McDermott Will & Emery.
HMRC may have influenced the 2019 review that found the fee should stay in place, therefore MPs, including Ms. Green and Gerald Jones, demanded on Thursday that the government start a “genuinely independent review” into the loan charge problem. 2019 saw the government order Sir Amyas Morse of the National Audit Office to conduct an impartial examination of the loan charge.
Numerous recommendations from the evaluation were adopted, one of which said that loans issued prior to 2010 should be exempt from the penalty.
However, HMRC was accused of meddling in a report by the Loan Charge All-Party Parliamentary Group, notably by obtaining an advance look at the review’s conclusions prior to publication. Multiple requests for access to information revealed this.
Merthyr Tydfil and Rhymney Labour MP Gerald Jones stated: “The 2019 Morse Review cannot be the final word on this matter.”
The Treasury’s financial secretary, Nigel Huddleston, informed MPs that he did not believe there was a sufficient case for a second assessment.
He went on, “The Morse review was extensive, and 19 of the 20 recommendations were put into practice.”
He said that after HMRC issues a formal order to cease promotions, known as a “Stop Order,” it will be illegal to advocate tax evasion schemes under provisions in the Finance Bill “currently progressing through this house.”
For the loan charge, an estimated 40,000 are still being sought.
“The loan charge seeks to recover tax that has been avoided by disguising income as loans,” an HMRC spokesman stated. It is our duty to collect the taxes that individuals are due.
“We take the welfare of all taxpayers extremely seriously and acknowledge that having to cope with significant tax obligations can put a strain on people.
“One of the tools we have available to assist individuals in resolving their past tax evasion is the ability to pay in installments. The length of time we can extend payments out depends only on the taxpayer’s financial situation. We urge anyone who is concerned about not being able to pay what they owe to get in touch with us right away so that we can discuss their options.
“Our main goal is to stop people from falling into these kinds of situations, and we want to make it very clear that if a tax plan seems too good to be true, it probably is.”
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