HMRC chief executive Sir Jon Thompson has written to the Loan Charge All Party Parliamentary Group (LCAPPG) expressing concern about reports of suicides among taxpayers faced with large tax bills arising from their use of disguised remuneration schemes
He says that HMRC takes the welfare of customers very seriously but, despite repeated requests, is having difficulty in finding out information about the individuals that it can send to its oversight body, the Independent Office for Police Conduct.
His email to LCAPPG chair Sir Ed Davey and vice chairs Ruth Cadbury and Ross Thomson said that the Loan Charge Action Group (LCAG) first mentioned someone had taken their own life because of their liabilities in November last year.
“Since then a number of references have been made to suicide, either by members of LCAG or others on social media,” Sir Jon says. “We have also been contacted by an individual through the complaints process.”
“Despite both direct approaches to individuals, and repeated requests to LCAG, no information has been provided that has enabled us to identify an individual that we can link to both taking their own life and the loan charge. Clearly, we refute any suggestions that we have failed to act in the appropriate manner.”
Last week, Aberdeen South MP Ross Thompson, a vice chairman of the APPG, raised the issue at Prime Minister’s Questions. He called on prime minister Theresa May to personally intervene to delay the loan charge “before more lives are damaged”.
“Last week,” he said, “MPs heard harrowing testimony from family members of a man who tragically committed suicide because he faced the loan charge – a 20-year retrospective tax facing thousands of families in my constituency and across the UK.”
His call was backed by the LCAG, which was set up in March last year by three taxpayers caught up in the disguised remuneration issue to raise awareness of the loan charge and provide information and resources for others affected by it. It now has more than 3,000 members, including NHS workers, teachers, public sector agency staff, power, gas and oil industry contractors, as well as IT, digital and banking sector specialists.
LCAG urged May to personally intervene to delay the introduction of “this draconian legislation”, bearing in mind not just the “tragic news of another suicide” but also “the reported risk among those facing the loan charge”.
The group pointed out that thousands of contract and freelance workers were facing bankruptcy, anxiety and stress as a result of the charge, “which breaks normal legal convention and allows HMRC to impose a retrospective 20-year tax grab for arrangements that were legal and declared to them at the time”.
“From LCAG survey figures, a huge 68% of those facing the loan charge admitted to suffering from depression and anxiety. A shocking 39% – well over a third of all affected – reported suicidal thoughts and a risk of self-harm,” it said.
It accused the Treasury and HMRC of ignoring the suicide risk and “instead resorting to misleading and inflammatory propaganda to seek to justify the retrospective tax and cover up HMRC’s own failings”.
LCAG added that the risk of people committing suicide had been raised in the House of Commons by MPs Peter Bone and Ann Main, as well as Ruth Cadbury. “Cadbury raised the recent testimony to the Loan Charge APPG during a House of Commons debate to the responsible minister, Mel Stride, on Monday, who astonishingly simply ignored it,” it said.
The group also said that it had asked HMRC and the Treasury to set up a helpline for distressed taxpayers but both had refused “despite being aware of the suicide risk posed by their policy”. “There are serious question marks about the duty of care of both the Treasury and HMRC now it is known that they ignored warnings and people have actually taken their own lives.”
In his email to the MPs, Sir Jon refers to the request but points out that a dedicated helpline for avoidance scheme users already exists, with call handlers trained to deal with vulnerable taxpayers and to direct them, if ne be, to relevant organisations, including The Samaritans. “Counselling is not an area of expertise one would associate with a tax authority,” he adds.
“My concern is that the tone of some of the debate around the loan charge, and the spreading of unconfirmed rumours, risks creating additional concern for vulnerable customers,” he tells the LCAPPG.
He asks the MPs to encourage worried taxpayers to get in touch with HMRC. “Constant tweets implying that the loan charge will be dropped and therefore people should hold off approaching us does nothing to help those with disguised remuneration liability.”