This week on my CROSS QUESTION show we had a fairly robust discussion which ended with a text question on something which on the face of it is very unfair.
Thousands of self-employed people are being harassed by HMRC for thousands of pounds – in many cases tens of thousands of pounds. They took part in various HMRC approved schemes, which all of a sudden HMRC announced were illegal, despite having previously given them their blessing.
So these people are being chased for back taxes for the last twenty years. This is affecting nurses, doctors, IT contractors and many other people too. These are not rich people. They are ordinary hard-working people whom through no fault of their own, have been caught up in something which should never have been allowed to happen.
Mel Stride, the Financial Secretary to the Treasury was, however, unrepentant and fully supported the HMRC action. He defended it very robustly and given it was a subject he wasn’t expecting to be asked about did it in good humour too.
I’m not sure many people found it very convincing though. From what I know of the subject I cannot see how it is possible to defend HMRC’s action with any degree of logic. Fine, if there was an issue, introduce legislation to solve it, and ensure that people in future understand what the law is. But to penalise people for taking part in schemes which HMRC approved of and then try to claim back taxes over twenty years, well, I can’t see how a Conservative minister can defend that.
Stride said that anybody who owed less than £50,000 could have five years to pay it back, as if that was a major concession. But the trouble is that many people who have filled in the forms and sent them back to HMRC in advance of the end of September deadline have heard absolutely nothing back.
Campaigners say there are people on the verge of taking their own lives as a result of this because there is no way they will be able to find the money. There are people who might lose their houses.
This is a political crisis in the making. If I were Philip Hammond or Mel Stride I’d make sure my case as absolutely watertight, because if they have got this wrong, the consequences could be appalling.