The independent London newspaper

‘I was hit by terrifying £48k tax bill’

Clerkenwell woman among hundreds facing bankruptcy after receiving demands

31 May, 2019 — By Emily Finch

HUNDREDS of people in Islington have been hit by “terrifying” and unexpected tax bills totalling hundreds of thousands of pounds. They are now asking their MPs to help them avoid bankruptcy.

Jennifer Graham, 45, from Clerkenwell, whose surname we have changed at her request, said she was told to cough up £48,000 last month in “loan charge” fees.

She said: “I don’t have that kind of money. It’s terrifying. I don’t want to live in the UK any more if this is how people are treated

“I went to give evidence in Parliament recently and there were grown men crying about how much they were told to pay. A whistleblower said they knew of six suicides related to the loan charges.”

Loan charges are retrospective tax bills introduced by the Tory government in the 2017 Budget to close a tax “loophole” for freelancers. HMRC, the government body which collects tax, has sent out 330 letters to Islington residents this year asking for money tied to income dating back to 1999.

But Ms Graham, who work­ed at one point as a contractor for HMRC, said she “was not a criminal” and had not knowingly avoided paying tax.

“I didn’t work with a lawyer or an accountant to come up with a plan to screw the government,” she said.

Ms Graham was told to go through an “umbrella company” by a government recruitment partner to receive her salary for her research role at HMRC. “You’re working for the government so you’d think the people representing them will be approved and legitimate,” she said.

She also said she had to pay the umbrella company 18 per cent of her day-rate fees.

Umbrella firms offered “loans” to self-employed workers, which meant the employee and employer paid little or no tax or National Insurance contributions for work undertaken.

Ms Graham says she had had “little help” from her local MP, Emily Thornberry, when she visited her office.

The Islington South MP told the Tribune: “I know many constituents are facing difficulty because of this issue, and I will urge HMRC in all situations to look at people’s personal circumstances and come to sensible arrangements to give them time to pay the tax they owe.

“But on the basic principle, anyone knows that if they are being paid an income, and paying no tax on that income, then they are enjoying the benefits of all the public services we rely on, but unlike the rest of us they are getting them for free, and that is simply not right.

“While I sympathise with the personal difficulties many individuals are facing, I cannot and will not criticise HMRC for taking action.”

The new Treasury minister, Jesse Norman, has been asked by 175 MPs to review loan charge demands.

A government spokesman said: “The loan charge means people who paid themselves through loans, often from offshore trusts, will have to contribute their fair share to pay for public services. If we didn’t collect this money, it will mean less funding for vital services and taxpayers who play by the rules having to pay more to make up the shortfall left by those avoiding tax.”

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