Can’t pay, shouldn’t pay

You probably haven’t heard of the loan charge. I hadn’t until a couple of months ago, when I told listeners to my LBC radio show that I would soon be interviewing Mel Stride, the financial secretary to the Treasury. Following this, I was bombarded by texts and emails from something called the Loan Charge Action Group and its many, many sympathisers. I then became acquainted with what might be the next storm to hit the government.

The messages, many of them emotional and some borderline aggressive, told the same story: hundreds of what politicians like to call ‘hardworking families’ were facing unpayable and unjust tax bills as a result of a Treasury U-turn on what previously had been a perfectly legal tax scheme. Freelancers and contractors had been allowed to be paid through an employee benefit trust; the payment was via ‘loans’ that were never repaid. An odd arrangement, to be sure, but it was once accepted and promoted as a legitimate way for the self-employed to reduce income tax.