MPs and contractors urge UK authorities to U-turn on ‘manifestly unfair’ Mortgage Cost settlement phrases
The UK authorities stands accused of “betraying” 1000’s of contractors who’ve settled their Mortgage Cost liabilities in full by agreeing to chop the quantity nonetheless owed by those that are but to take action by “no less than 50%”.
The federal government dedicated to wiping 1000’s of kilos off the excellent liabilities of the 32,000 individuals who stay in-scope of the Mortgage Cost in November 2025, and are but to succeed in a settlement settlement with HMRC over the matter.
This dedication was in response to the publication of the most recent unbiased evaluate into the Mortgage Cost in November 2025, authored by former HM Income and Customs (HMRC) assistant director Ray McCann.
As beforehand detailed by Pc Weekly, the evaluate was commissioned by HM Treasury to resolve the fallout from the Mortgage Cost coverage, which has seen tens of 1000’s of contractors saddled with life-changing tax payments.
In line with the federal government, in its response to the McCann evaluate, people that select to have interaction with its revised strategy to settlements might see a discount of as much as £70,000 of their excellent Mortgage Cost liabilities.
“Most people might see reductions of no less than 50% of their excellent mortgage cost liabilities and an estimated 30% of people might have the ability to settle with out paying something,” the federal government response acknowledged.
In line with the McCann evaluate, round 12,000 contractors have already reached a settlement settlement with HMRC over the Mortgage Cost.
Mortgage Cost liabilities
Nonetheless, it has since emerged that many of those people shall be precluded from financially benefiting from the federal government’s proposed interventions, as a result of solely those that have delayed settling with HMRC will see the dimensions of their Mortgage Cost liabilities lower.
The state of affairs has been described as “manifestly unfair” by a cross-party group of MPs, who’re all members of the Mortgage Cost and Taxpayer Equity All Social gathering Parliamentary Group (APPG), in a letter dated 16 December 2025 and addressed to McCann.
“Those that settled with HMRC to keep away from the Mortgage Cost, with the specter of a lot increased HMRC calls for, now face having finished so on worse phrases than those that didn’t,” the letter states.
“It’s a matter of pure justice that each one those that settled have their settlements readjusted in order that they’re topic to the identical phrases as those that didn’t. That is one thing we imagine the federal government should handle, and as a matter of precedence.”
One contractor affected by the state of affairs, who spoke to Pc Weekly on situation of anonymity, stated they signed a settlement settlement with HMRC in late 2020, which has concluded within the reimbursement of a six-figure sum to HMRC over a five-year interval.
“Having paid a six-figure sum to HMRC to conclude settlement, I really feel betrayed and sickened that these, like me, who’ve settled should not being retrospectively supplied the identical phrases as those that sat again and did nothing,” the contractor stated. “It, fairly frankly, beggars perception that those that obfuscated and sat on their palms now get preferential remedy.”
If the contractor had determined to disregard HMRC’s settlement requests and delayed settling, they might have had their complete Mortgage Cost liabilities lower by tens of 1000’s of kilos, they claimed.
“It’s gutting that I’ve spent the previous 5 years paying again a big sum of cash to HMRC that has put myself and my household underneath big monetary stress … solely to seek out that if I had finished nothing and never complied, I’d have been higher off in consequence.
“The federal government’s personal concessions show that the unique settlement phrases have been extreme [and] unaffordable … [but] the brand new strategy advantages solely those that didn’t settle … leaving probably the most compliant taxpayers, resembling myself, considerably worse off.”
Pc Weekly contacted HMRC to see if there can be any monetary recourse for contractors which have already settled their Mortgage Cost liabilities, however was advised to contact the Treasury for a response.
Pc Weekly put the complaints of the contractor and the APPG to the Treasury, whose response didn’t straight handle any of the questions raised about whether or not the federal government has any plans to reassess the quantities paid by contractors which have already settled their Mortgage Cost liabilities.
“We settle for the evaluate’s discovering that the mortgage cost was a unprecedented piece of laws,” stated a Treasury spokesperson, in its assertion to Pc Weekly.
“By implementing these suggestions, we goal to attract this matter to a detailed in a way that balances the true considerations of these in scope with its broader duties for fiscal accountability and the broader public.”
“These in scope should nonetheless have interaction with HMRC and settle underneath revised phrases. On the similar time, we’re strengthening anti-avoidance enforcement to stop non-compliance.”
Anti-Mortgage Cost marketing campaign teams communicate out
Chatting with Pc Weekly, Mortgage Cost Motion Group (LCAG) spokesperson Steve Packham, whose organisation campaigns in opposition to the coverage, stated a lot of its members have been “pushed into deciding on unfair phrases”.
He additionally identified that the McCann evaluate acknowledged that the earlier settlement phrases the federal government supplied these in-scope of the coverage have been “unfair and unreasonable”, and “unduly harsh”.
“[And] but, disgracefully, the evaluate was designed to disregard those that settled on these phrases … so it’s fully unsuitable that the McCann evaluate excluded all these folks,” stated Packham.
Because of this, he stated LCAG is now intent on securing a “simply decision” for these people and everybody else affected by the Mortgage Cost. “Lots of those that settled beforehand did so underneath duress and since they believed they’d in any other case face far increased payments,” stated Packham.
“There are additionally 1000’s of people that have been engaged in settlement discussions with HMRC, for a lot of months and even a few years, who have been prevented from settling on account of HMRC delays and incompetence, or as a result of HMRC’s calls for have been merely unaffordable. All [those] affected ought to be supplied the identical phrases, no matter settlement standing or the years affected.”
In a press release to Pc Weekly, Mortgage Cost and Taxpayer Equity APPG co-chair Greg Smith echoed Packham’s dismay at how the McCann report criticises the earlier set of Mortgage Cost settlement phrases, but does nothing to assist those that needed to abide by them.
“It’s merely inconceivable, in addition to immoral, that the federal government can follow a place of most harshly punishing those that did what HMRC and ministers advised them they need to do,” stated Smith. “There should be a U-turn on this, and the Mortgage Cost and Taxpayer Equity APPG will hold pushing to proper this clear injustice.”
