CENTRAL Devon MP Mel Stride has defended himself against accusations of misleading MPs over a controversial tax which has reportedly driven people to suicide.

Mr Stride gave ‘partial and misleading answers to parliamentary questions’ in his ministerial role as financial secretary to the Treasury over the ‘loan charge’, an all-party parliamentary group of MPs has said.

The tax aimed at cracking down on ‘disguised remuneration schemes’ was introduced on April 5.

The Loan Charge All-Party Parliamentary Group (APPG)’s inquiry report said: ‘HMRC and the Treasury, including ministers and in particular Mel Stride, have chronically misrepresented information to both justify the policy and to cover up reality.

‘Their deeply questionable, and at times clearly cynical, use of propaganda to silence criticism and mislead parliamentarians and journalists has demonstrated a complete and arrogant disregard for accountability and for parliamentary scrutiny.’

The report said that 100,000 people are being hit by bills of tens of thousands of pounds through the ‘loan charge’, which is being brought in by HMRC this month.

Those affected are contract workers – among them locum doctors, nurses and supply teachers – who took the loans as part of their wages after signing up to third party schemes.

These arrangements, which the report said people entered in good faith and often at the insistence of their employer, are considered by HMRC to be tax avoidance schemes.

People are being asked to repay the loans or pay tax on them. Those affected, though, have crticised the HMRC for demanding the tax owed on loans daing back as far as 20 years in a single hefty bill.

Some people felt ‘criminalised’ by the HMRC in seeking for the loan to be repaid and at least one person had committed suicide over the Loan Charge, the inquiry heard. A whistleblower within the HMRC put that figure as high as six people.

The report from the APPG was highly critical of Mr Stride as the minister with responsibility for the HMRC and the Treasury.

It said he had referred to a court case concerning the legality of the Loan Charge misleadingly to answer criticism by MPs several times. It also criticised him for failing to give evidence to the All Party Parliamentary Group’s inquiry early in March.

However, Mr Stride roundly defended both his own conduct and that of the HMRC.

‘Disguised remuneration schemes are contrived arrangements that pay “loans” in place of salary, typically routing the loan through an offshore trust in a low or no tax jurisdiction, with the sole purpose of avoiding income tax and National Insurance contributions. The loans are not expected to be repaid and the income was always taxable,’ he said.

‘I appreciate that few people like having to pay taxes but it is only fair that we all pay what is due. If some are allowed to avoid tax then others have to pay more and our vital public services including our nurses, teachers and our police force have to go without. 

‘Over 99 per cent of taxpayers have had nothing to do with these avoidance schemes with many concluding that what appears too good to be true is too good to be true.

‘Most people if offered a scheme that seeks to disguise their income as a loan routed through an offshore trust in order to avoid tax would not want to get involved. 

‘In most cases it is businesses not individuals that are required to repay the tax owed and HMRC is very flexible in agreeing repayment terms that are affordable.

‘They have also made it very clear that no one will be required to sell their home in order to settle what they owe. 

‘The vast majority of taxpayers who pay their tax correctly and on time are quietly appalled by these tax avoidance schemes and expect the Government to act.

‘As to the APPG’s accusations, I am confident that I and all those civil servants advising me on this policy have upheld the highest standards of integrity, honesty and objectivity throughout.

‘I met with the APPG, alongside the Chancellor, for a very frank exchange of views on the policy in January and my policy officials followed up with another meeting with them more recently, so it is completely untrue to imply we have not engaged.

‘And finally I take the health and well-being of our most vulnerable customers extremely seriously, which is why we’ve made sure there are manageable payment arrangements in place, given assurances around bankruptcies and family homes, and enhanced HMRC’s support systems for vulnerable taxpayers.’