MPs tell Reeves the loan charge review is drawn too narrowly to reach contractors

The government's new inquiry examines only how contractors settle, not whether they should have to, and cross-party MPs want to know why.

On 26 February 2025 the cross-party Loan Charge and Taxpayer Fairness All-Party Parliamentary Group wrote to the Chancellor, Rachel Reeves, warning that the government's newly commissioned review of the loan charge had been drawn too narrowly to deliver justice for the tens of thousands of contractors caught by the policy. The letter posed a series of questions about the review's remit and independence, and pressed the Treasury to clarify who would actually be helped.

A review of settlement terms, not the policy

The review had been announced on 23 January 2025 by James Murray, the Exchequer Secretary to the Treasury, and handed to Ray McCann, a former senior HMRC inspector and past president of the Chartered Institute of Taxation. Its terms of reference confined it to the settlement terms "available to those who are subject to the Loan Charge who have not yet settled", and to "whether HMRC's settlement and debt management processes sufficiently take into account their ability to pay". It was due to report by summer 2025, with a government response expected at the Autumn Budget.

What the review would not examine was the legitimacy of the loan charge itself, HMRC's conduct in enforcing it, the role of the scheme promoters, or cases predating 2010. Announcing it, Murray said that allowing taxpayers to escape liability would be unfair to the majority who comply with the law. The government estimates that around 50,000 people were affected by the charge, with roughly 40,000 still facing it.

MPs press the Chancellor

The APPG, co-chaired by Sammy Wilson MP and Greg Smith MP, told the Chancellor that "clearly what has been announced is not the full review/inquiry that we had called for in our letter to you in December." The group repeated its case for a genuinely independent inquiry led by someone with no history at HMRC, staffed from outside the department and the Treasury. It also objected to the official description of HMRC's demands as "tax liabilities", arguing the sums had never been proven in court as tax due, which was the very feature the loan charge had been designed to sidestep.

Campaigners were blunter. Steve Packham, a founder member and spokesperson of the Loan Charge Action Group, said the announcement "is not a review at all, as it actually astonishingly excludes reviewing the Loan Charge. It is a complete sham and a betrayal of the promise made by Rachel Reeves last year."

What it meant for contractors

The loan charge fell overwhelmingly on IT and other freelance contractors who had been paid through disguised-remuneration schemes, typically loans routed via umbrella companies or agencies and never intended to be repaid. Legislated in 2017 and taking effect in April 2019, the charge originally reached back to loans made in 1999, before Sir Amyas Morse's 2019 review limited it to arrangements entered into on or after 9 December 2010. At least ten suicides have been linked to it.

For contractors still holding HMRC demands, the McCann review offered a narrow but real prospect of more affordable, better-calibrated settlement terms. It offered nothing to those who had already settled, or whose cases fell before the 2010 cut-off, and it would not reopen the question campaigners most wanted answered: how the schemes came to be sold in the first place.

McCann's findings, and the Treasury's answers to the APPG's questions, would determine whether the review closed the matter or merely deferred it.