HMRC’s Secret Deals: A Scandalous Betrayal of Taxpayers and Justice

 

The recent revelation that HM Revenue and Customs (HMRC) quietly offered large corporations an 85% discount on tax liabilities tied to the notorious loan charge scandal, while ruthlessly pursuing individual contractors with life-ruining bills, is nothing short of a grotesque abuse of power. Documents uncovered through a Freedom of Information request, brought to light by Conservative MP Greg Smith during Treasury Questions, expose a deeply unequal and morally bankrupt approach by HMRC. This is not just bureaucratic incompetence—it’s a deliberate, systemic injustice that demands accountability and reform.

The Loan Charge Scandal: A Brief Recap

The loan charge, introduced in 2017, is a controversial tax policy targeting disguised remuneration schemes—arrangements where workers, often contractors, were paid via non-taxable loans instead of salaries. These schemes, dating back to the 1990s, were often marketed as HMRC-compliant by trusted tax advisers, luring approximately 50,000 self-employed workers into financial arrangements they believed were legitimate. HMRC, however, retroactively deemed these schemes tax avoidance, pursuing contractors for back taxes, interest, and penalties, often resulting in bills that dwarfed their earnings. Tragically, the policy has been linked to at least 10 suicides, with countless others driven to bankruptcy, depression, and despair.

The Smoking Gun: Secret Deals for the Powerful

The bombshell dropped via the FOI request reveals that in 2015, a year before the loan charge was introduced, HMRC struck clandestine settlement deals with multi-million-pound companies involved in these same payroll loan schemes. These corporations—often major players in banking and financial services—were allowed to settle their tax liabilities for a mere 15% of what was owed, effectively receiving an 85% discount. Meanwhile, individual contractors, many of whom were coerced or misled into these schemes, were offered no such leniency. Instead, they faced crushing demands for 100% of the alleged tax owed, plus interest and penalties, with some bills exceeding their total earnings from the period in question.

Ray McCann, a former HMRC assistant director and leader of the ongoing loan charge review, admitted in 2019 minutes with Lord Amyas Morse that these “generous” corporate settlements included “significant discounts” not extended to contractors. McCann himself called this disparity discriminatory, noting that “contractors weren’t offered these terms” and that “settlement opportunities have always had a discount, and contractor one is the only one that didn’t.” This admission is damning—a clear acknowledgment that HMRC knowingly treated small-scale contractors far more harshly than corporate giants.

A Tale of Two Taxpayers

The hypocrisy is staggering. Large companies, with armies of lawyers and accountants, were quietly let off the hook with sweetheart deals, while ordinary workers—IT consultants, nurses, teachers, and others—were hounded relentlessly. For example, one contractor earning £13,000 annually was slapped with a £250,000 tax bill, a sum so disproportionate it defies reason. Meanwhile, corporations that facilitated these schemes, reaping millions in profits, paid a fraction of their liability and walked away unscathed.

This double standard isn’t just unfair—it’s predatory. HMRC’s own rhetoric claims the loan charge is about “fairness for all taxpayers,” yet their actions tell a different story: one where the powerful are coddled, and the vulnerable are crushed. The Loan Charge Action Group’s Steve Packham put it bluntly: “Ten people have killed themselves as a direct result of HMRC’s ruthless persecution of people who the Chancellor herself has described as ‘victims of mis-selling’.” Yet, HMRC allowed corporate enablers to escape with a slap on the wrist.

HMRC’s Complicity and Inaction

HMRC’s defence—that it never approved these schemes and that settlements are based on “individual facts”—rings hollow. Many contractors entered these schemes in good faith, relying on assurances from tax advisers and promoters that they were compliant. HMRC failed to act on red flags, such as DOTAS (Disclosure of Tax Avoidance Schemes) registrations, allowing these arrangements to proliferate for years. When it finally moved, it targeted the easiest prey—individual contractors—while largely ignoring the promoters and employers who designed and profited from the schemes.

The 2019 Morse Review, which led to some reforms, including limiting the loan charge’s scope to post-2010 loans, was supposed to address these injustices. Yet, HMRC’s continued pursuit of pre-2010 cases through alternative mechanisms like s684 notices shows a refusal to let go, even when the law’s clarity at the time was questionable. This relentless hounding, coupled with the revelation of secret corporate deals, undermines any claim that HMRC operates with integrity or fairness.

A Call for Accountability

MPs and campaigners, including Sarah Olney of the Liberal Democrats and the Loan Charge and Taxpayer Fairness APPG, are rightly demanding answers. They’ve called for contractors to be offered the same 15% settlement terms as corporations and for a full, independent inquiry into HMRC’s conduct. The parallels with the Post Office Horizon scandal are undeniable: a government agency pursuing ordinary people with devastating consequences, while those truly responsible—promoters and corporate enablers—evade accountability.

HMRC’s actions are not just a failure of policy but a betrayal of public trust. The agency’s secrecy, its discriminatory treatment of taxpayers, and its refusal to pursue scheme promoters with the same zeal it applies to contractors reveal a rotten core. The government must act swiftly: offer contractors the same settlement terms as corporations, pause all loan charge enforcement pending the current review, and launch a root-and-branch investigation into HMRC’s practices. Anything less is complicity in a scandal that has already claimed lives and livelihoods.

Conclusion

The loan charge scandal is a stark reminder of what happens when power is wielded without accountability. HMRC’s secret deals with large companies, while punishing contractors with crippling bills, expose a tax system rigged to favor the powerful. The human cost—10 suicides, countless bankruptcies, and untold suffering—demands justice. It’s time for the government to stop hiding behind HMRC’s excuses and deliver fairness to the victims of this egregious miscarriage of justice. The call for an independent inquiry is not just warranted—it’s urgent.

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Tax does have to be taxing.


HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Fujitsu’s £280m HMRC Contracts: A Disgraceful Betrayal of Taxpayers Amid Post Office Scandal

 

 

In a move that has sparked outrage among campaigners, victims, and taxpayers alike, HM Revenue & Customs (HMRC) has signed off on two contracts worth a staggering £280 million with Fujitsu, the Japanese IT giant at the heart of the Post Office Horizon scandal. These contracts, described as “bridging” arrangements to maintain datacentre operations and self-assessment system hosting while HMRC transitions away from Fujitsu’s infrastructure, represent a continued reliance on a company responsible for one of the UK’s most egregious miscarriages of justice. The decision to funnel hundreds of millions in taxpayer money to Fujitsu, despite its role in ruining countless lives, is nothing short of disgraceful and raises serious questions about accountability and government priorities.

The Post Office Scandal: A National Disgrace

The Post Office Horizon scandal, widely regarded as the biggest miscarriage of justice in modern British history, saw more than 900 sub-postmasters wrongfully prosecuted between 1999 and 2015 due to faults in Fujitsu’s Horizon accounting software. The defective system falsely reported financial shortfalls, leading to convictions for theft and fraud, ruined livelihoods, imprisonment, and even suicides among innocent sub-postmasters. The human toll was catastrophic, with families torn apart and communities shattered, while Fujitsu and Post Office management evaded accountability for years.

 

Public outrage intensified following the 2024 ITV drama Mr Bates vs The Post Office, which brought renewed attention to the scandal. Fujitsu, acknowledging its “corporate responsibility,” pledged to suspend bidding for new UK government contracts until the ongoing public inquiry into the scandal concluded. Yet, despite this promise, the company continues to secure lucrative deals, with HMRC’s latest £280 million contracts being a glaring example of business as usual.

HMRC’s £280m Deal: A Slap in the Face to Victims

HMRC’s decision to award Fujitsu two contracts—one for datacentre operations and project services, and another for hosting applications on a virtual platform—has been met with fierce criticism. Campaigners and former sub-postmasters, including one who was imprisoned while pregnant due to Horizon’s errors, have called the move “truly wrong” and “an insult to victims and the inquiry itself.” Kevin Hollinrake, the former postal affairs minister, condemned the government, stating, “The least Labour could do is secure the interim payment that we pushed for whilst in office before pressing on with these multi-hundred million contracts. Anything less would be another betrayal of postmasters and the British taxpayer.”

 

The contracts, signed off as HMRC plans to transition away from Fujitsu’s datacentres, are framed as a necessary stopgap. A government spokesperson emphasised that the deals are “contingency measures” to ensure continuity while HMRC migrates to a cloud-based system managed by a hyperscaler. However, the justification rings hollow when taxpayers are footing a £280 million bill for a company that has yet to contribute meaningfully to compensation for Horizon victims. The inquiry, expected to release its initial report soon, has already cost taxpayers dearly, and the entire financial burden of compensating victims—estimated at over £1 billion—has fallen on the public purse.

Fujitsu’s Unbroken Grip on Taxpayer Funds

Fujitsu’s deep entrenchment in government contracts is a troubling reality. Despite its role in the Horizon scandal, the company has raked in billions from the UK government over the years. In 2022 alone, Fujitsu secured £430 million in government contracts, and last year, HMRC paid the firm £310 million. Posts on X reflect public frustration, with users like

@premnsikka

noting that Fujitsu “makes millions from govt contracts” while facing no penalties for its role in the scandal. Another user,

@paullewismoney

, highlighted a £500 million HMRC deal in 2022, calling it a reward for complicity in the Post Office cover-up.

 

The government’s reliance on Fujitsu stems from the complexity and risk of replacing entrenched IT suppliers in major public sector systems. HMRC’s “bridging” contracts are a testament to this dependency, as the department admitted that only Fujitsu can fulfil these roles during the transition period. This raises a broader issue: why has the government allowed itself to become so reliant on a single provider, especially one with a track record of catastrophic failure?

A Failure of Accountability

The decision to extend Fujitsu’s contracts comes at a time when the public inquiry is still investigating the company’s role in the Horizon scandal. MPs and peers, including Lord Bellingham, have demanded clarity on Fujitsu’s continued involvement in public sector contracts, particularly as the company has not yet contributed to victim compensation. The police investigation, Operation Olympos, has identified seven suspects and over 45 persons of interest, including Fujitsu management, but no prosecutions have materialised. This lack of accountability fuels public distrust, as Fujitsu continues to profit handsomely while victims fight for redress.

The government’s response has been inconsistent at best. Initially, officials claimed the HMRC contracts were part of a broader effort to “quickly and securely remove” Fujitsu from government systems, only to retract that statement and clarify that the goal applies only to HMRC’s transition. This flip-flopping undermines confidence in the government’s commitment to holding Fujitsu accountable. Meanwhile, the Business Secretary’s March 2025 meeting with Fujitsu to discuss victim compensation has yet to yield tangible results, leaving taxpayers to shoulder the financial burden.

A Call for Justice and Reform

The HMRC-Fujitsu contracts are a stark reminder of the government’s failure to prioritise justice over corporate convenience. Awarding £280 million to a company responsible for devastating lives is not just a pragmatic necessity—it’s a moral failing. The government must act swiftly to:

1. Suspend Fujitsu Contracts: Halt all non-essential contracts with Fujitsu until the inquiry concludes and the company contributes significantly to victim compensation.
2. Accelerate Decoupling: Invest in expediting the transition away from Fujitsu’s systems to reduce long-term dependency.
3. Ensure Accountability: Support the police investigation and push for prosecutions of those responsible at Fujitsu and the Post Office.
4. Compensate Victims: Streamline the redress process, which MPs have criticised as “too slow,” to ensure sub-postmasters receive the payouts they deserve without delay.

   

Conclusion

HMRC’s £280 million contracts with Fujitsu are a disgraceful continuation of a system that rewards failure while taxpayers and Horizon victims pay the price. The Post Office scandal exposed Fujitsu’s role in a national tragedy, yet the company continues to suck at the teat of public funds with impunity. As the inquiry progresses and public anger grows, the government must stop treating Fujitsu as an indispensable partner and start treating it as a corporate culprit that must be held to account. The British taxpayer—and the sub-postmasters who suffered for decades—deserve nothing less.

Tax does have to be taxing.



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"