PEOPLE affected by the loan charge will only be asked to make repayments to HMRC if they can afford to pay, according to local MP Neale Hanvey.

Information received by the Kirkcaldy and Cowdenbeath MP, who met with HMRC bosses last week, confirmed that recovery teams will work with affected taxpayers and that people will not be expected to sell their homes to make repayments. Tax bosses stressed that affordability will be a key aspect of HMRC’s recovery approach.

Mr Hanvey has been assisting several constituents affected by the UK Government’s highly controversial loan-charge policy that allows HMRC to re-open previously agreed tax returns and issue retrospective tax demands.

The loan charge is a tax charge on all outstanding disguised remuneration loans made on or after 9 December 2010 and outstanding on 5 April 2019. Most people affected by the loan charge work as contractors or freelancers and were advised to follow these tax arrangements by independent financial advisors.

Mr Hanvey, who is a member of the cross-party group set up to look at the loan charge, has argued that the UK Government must U-turn on the retrospective element of the loan charge policy. He also recently joined colleagues from across the House in support of an amendment that proposed an independent review into the tax policy.

Commenting, Neale Hanvey said: “The constituents I’ve been assisting with the loan charge are worried that they’ll be left financially destitute and have explained the impact this is having on their mental health.

“So, the information from my meeting with HMRC bosses will be welcome news. I can assure them and anyone else impacted by the loan charge that they will not lose their homes and repayments will only be sought where a person can afford to make them".

He added: “But that doesn’t change the substance of the issue. We still have a situation where ordinary folk, through no fault of their own, are being chased for substantial amounts of money by HMRC.

“The majority of my constituents who are affected by the loan charge are low to middle earners, folk who work as contractors or freelancers, and who were advised to use financial companies to manage their tax affairs.

“They followed the professional advice of these alleged tax experts and now years later it’s the ordinary people who are being pursued for the unpaid tax.

“There are some people out there who do not realise that they have loan charge issues because they were paid in loans by their umbrella companies without their full knowledge or understanding. If you think this might apply to you, please get in touch with HMRC.

“I will continue to raise the unfairness of the loan charge in Westminster and will pass on any updates from HMRC. If you have been affected by the loan charge and think I could help in any way, please don’t hesitate to get in touch with my office.”