A GROUP of 100 MPs, including Monmouth's David Davies, have urged chancellor Sajid Javid, to scrap the controversial 'loan charge' scheme.

HMRC has sent bills to around 50,000 people in the UK who used a tax-saving scheme through which salaries were paid through loans paid out on terms which were unlikely to ever be repaid, over the past 20 years - with some facing demands for hundreds of thousands of pounds.

The organisation has said the so-called 'disguised remuneration' - or DR - schemes were never intended to be paid back, so amounted to regular taxable income, with the charges intended to cover the retrospective tax owed. And when a business is unable to pay the charge, HMRC has passed the responsibility to the relevant employee.

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Conservative MP Mr Davies has joined up with the group of MPs, who have said six people have killed themselves after being told to pay up, and these cases had been been reported directly to an all-party parliamentary loan charge group. A support helpline set up by the Loan Charge Action Group, the MPs added, had reported "an alarming increase in the number of calls of people reporting suicidal thoughts".

The Loan Charge Action Group has said a worker earning around £30,000 from a DR scheme over five years would need to pay HMRC a loan charge of £42,324, and those in such a scheme for 20 years could owe hundreds of thousands of pounds.

The action group said younger freelance workers were particularly liable to being offered DR schemes. Such schemes, it added, had been recommended by public sector organisations on a local and national level.

In early September, prime minister Boris Johnson said a "thorough-going review" of the loan charge would take place, and in their letter to Mr Javid, the MPs said "a suspension of the loan charge and all associated activity is clearly fundamental to a genuine review".

But the MPs said HMRC was continuing to chase down loan charges following Mr Johnson's announcement.

"In recent weeks, HMRC have clearly stepped up enforcement of outstanding [payment notices] linked to loan schemes," the MPs said in their letter to Mr Javid. "HMRC’s actions are contrary to the spirit of the announced delay to settlements and the review and are unreasonable and dangerous. We are urging you to instruct HMRC to cease all such action immediately."