The latest line out of the Treasury is that HMRC is pursuing up to 700,000 individuals linked to tax avoidance schemes. To the casual reader of the FT, that sounds reasonable. Tax avoidance, after all, is a bad thing. Crack down on it. Job done.

The reality is rather different. The 700,000 figure includes vast numbers of agency nurses, IT contractors, locum doctors, supply teachers and ordinary self-employed workers who, between roughly 1999 and 2017, were sold "loan schemes" by tax advisers who told them — in writing — that the schemes were legal. HMRC has now spent a decade chasing those people, retroactively, for tax bills that in many cases run to six figures. This is not Robin Hood. This is the state extracting cash from working people because the Chancellor has run out of other places to find it.

Who HMRC Is Actually Pursuing

The truly egregious tax avoiders — the multi-millionaires with offshore trusts, the corporate vehicles in Jersey, the structures inside Mossack Fonseca — are not the people receiving the 700,000 letters. They have lawyers. They have accountants. They have, frankly, the political connections to make sure the rules never quite touch them.

The people getting the letters are the people without those defences. The locum nurse who was told by a contractor agency "this is how everyone in your sector gets paid". The IT contractor who took the tax adviser's signed letter at face value. The supply teacher who never had any idea what a "loan scheme" even was, just that the agency told her it was the standard arrangement. These are the people Rachel Reeves's Treasury is pursuing. These are the people whose lives are being destroyed by retrospective tax bills.

A Treasury That Cannot Afford Honesty

The reason this is happening now is straightforward. The Government's books do not balance. Frozen tax thresholds, the energy price cap, the asylum hotel bill, the public sector pay rounds and a stagnant economy are pulling the revenue line in the wrong direction. The easiest cash to find is cash from people who cannot fight back. Mid-career professionals in their forties and fifties who took tax advice in good faith twenty years ago tick that box exactly.

So the Treasury sends out the letters. Some recipients pay because they do not have the energy to fight. Some declare bankruptcy. A significant number — the Loan Charge campaign has documented this — take their own lives. That is not a metaphor. The Loan Charge has been linked to ten suicides as of the most recent parliamentary review. The Treasury is aware of the figures. The Treasury continues regardless.

The Rule of Law Goes Both Ways

One of the foundations of British civil society is the principle that the law applies forwards, not backwards. If a scheme was legal when you used it, you should not be hauled back twenty years later and told you owe a six-figure bill because the rules were retrospectively changed. That principle has been quietly abandoned by HMRC over the last decade. No party in office has been brave enough to confront it. Labour's enthusiasm for headline-grabbing tax raids has now made it considerably worse.

HMRC will tell you that 700,000 figures are scheme participants, not bills. That is a fig leaf. Once you are on the list, the letters start. Once the letters start, the legal costs alone — even before any tax payment — are enough to wipe out a small business. This is the actual operating reality of the Reeves Treasury.

What Reform UK Would Do

Reform UK would draw a line under retrospective tax cases for any scheme HMRC accepted as legal at the time of use. We would direct HMRC's enforcement resources where they belong: on genuine offshore evasion, on corporate structures designed to defeat the spirit of the law, and on the multi-million-pound schemes that the Treasury currently finds politically inconvenient to challenge. We would also raise the personal allowance to £20,000 — the single biggest tax cut for low and middle earners in a generation — so that fewer working people are pulled into the higher-rate net in the first place.

Tax fairness should mean the same rules for the rich as for the rest. Right now, it means the opposite: a Treasury too weak to confront the well-resourced and too willing to crush the working professional. Reform UK would change that.