Hundreds take to Twitter about DR loan charge scheme

People in Oxfordshire could be left bankrupt and without their homes if Boris Johnson doesn't 'act fast', says Layla Moran.

The Oxford West and Abingdon MP explained in a letter to the new Prime Minister that 'urgent' action needed to be taken.

The Loan Charge affects those who have taken out a disguised remuneration (DR) schemes from 1999.

The schemes came about in light of the 'IR35' – a piece of legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name – for example those with zero hours contact, or those who did a lot of freelance work.

The idea was that companies and employees signed up the scheme through companies, which were usually overseas.

The companies would then work as a middle man between the employer and employees paying employee their usual income in the form of non-repayable loans, and checking all IR35 paperwork was done – taking a fee for the trouble.

The Government said this was a tax avoidance scheme and that the employers, companies and employees didn't pay income tax or national insurance.

The gov website explains: "So they are no different to normal incomes and are taxable."

It means that those who took out a DR scheme will have 20 years of pay backdated and the tax not paid will be fined.

Ms Moran said: "The charge on the DR schemes is unfair in its retrospection."

Those on Twitter flooded the Oxford Mail with comments like: "It has taken thousands of hours to understand this scandal."

Another, @Camefirst added: "It is a disgrace that HMRC have been given powers to change the rules, backdate them 20 years and remove peoples right to a trial."