HM Revenue & Customs (HMRC) has invested £186 million over six years to recover unpaid taxes linked to “disguised remuneration” schemes, a move critics have labeled “shameful” and “disgusting.” This ongoing crackdown centers around the Loan Charge, introduced in 2019, which targets individuals involved in arrangements where income was paid through loans rather than reported as earnings.
An independent review revealed that HMRC spends approximately £31 million annually enforcing loan charge compliance. This figure has fueled concerns about the fairness and effectiveness of the agency’s approach. The Loan Charge and Taxpayer Fairness group—a coalition of 156 MPs and Lords—has called for a public inquiry into HMRC’s practices, describing the situation as a “profound failure.”
Freedom of Information requests uncovered that HMRC settled with 800 individuals, recovering £44 million. However, public figures and campaigners argue that the tax authority has been focusing its efforts on taxpayers rather than pursuing the promoters who designed and sold these schemes.
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Sir Jacob Rees-Mogg, former Conservative cabinet minister, condemned the retrospective enforcement, saying, “Retrospective action is completely unconstitutional. HMRC didn’t raise objections at the time, and it’s extremely unfair that these schemes are now deemed illegal. Innocent taxpayers believed they were acting legitimately and, tragically, some died by suicide due to this unfair treatment. HMRC should have targeted the scheme promoters instead.”
Mid Buckinghamshire MP Greg Smith echoed these sentiments: “HMRC has consistently targeted the wrong people. Meanwhile, the current government continues to pursue victims of mis-selling without recovering the millions profited by those who mis-sold these schemes, which is deeply shameful.”
Steve Packham, co-founder of the Loan Charge Action Group, criticized Labour’s reversal on the issue, noting, “In opposition, Rachel Reeves demanded HMRC pursue the perpetrators, but in government, there’s been a complete U-turn. While those who mis-sold PPI face repayments, the promoters of contractor loan schemes remain unaccountable—this is a glaring double standard.”
In response, an HMRC spokesperson stated: “Following the 2025 Loan Charge Review, the Government agreed on a new settlement offer, and we are working collaboratively with affected individuals to resolve this matter.”