loan charge

Loan Charge claims tenth suicide

As another suicide is linked to the controversial tax recovery policy


The government has been urged to find a resolution to the Loan Charge injustice by the All-Party Parliamentary Loan Charge and Taxpayer Group (APPG), with a tenth suicide linked to the controversial tax recovery mechanism. 


The connection between the suicide and the Loan Charge was confirmed in correspondence between Jim Harra, the Chief Executive Officer of HMRC, and Harriet Baldwin MP, the current chair of the Treasury Select Committee, in early January, as reported by the Yorkshire Post (paywalled).


The news follows the publication of an open letter to Rishi Sunak and Jeremy Hunt in November 2022, sent by the APPG and signed by 120 MPs, which warned of “a real risk of more suicides, as well as many families facing hardship” as a direct result of the Loan Charge.


The APPG had urged the government and HMRC to review the Loan Charge, “not just out of compassion, but also commonsense”, calling it “a significant problem, as well as being a wholesale failure as a policy”.


About the Loan Charge


The Loan Charge was introduced as part of a crackdown on tax avoidance and evasion aimed at contractors who had worked through disguised remuneration schemes.


Disguised remuneration schemes avoid income tax and national insurance contribution payments to HMRC. The Loan Charge seeks to recover these taxes from the scheme participants rather than the scheme operators, however, which has been a source of controversy since its introduction.


How much a scheme participant owes is calculated by adding together the value of all the loans they received. This sum is then treated as income in one year and taxed at the prevailing rates of income tax and national insurance.


The way the rule is applied has left many thousands of contractors facing significant backdated tax bills, with HMRC estimating as many as 50,000 people are affected and that £3.2bn is recoverable.


The significant tax bills have reportedly led to 10 suicides, and the policy is now under increasing scrutiny, with the government mounting pressure to review it.


Contractors are still exposed without SEB


Having recently abandoned its pledge to introduce a Single Enforcement Body (SEB), experts have argued that the government has left contractors and freelancers exposed to the threat of tax avoidance schemes. 


The SEB included plans to introduce regulatory reform to the umbrella sector as well as unifying the three bodies which monitor compliance with employment law and regulations. 


Specialists have said the failure to regulate the umbrella industry has been responsible, in part, for the proliferation of tax avoidance schemes in the sector. 


Abandoning the government’s manifesto pledge was labelled a “short-sighted move” which leaves contractors at risk – and rogue operators of tax avoidance schemes unpunished.


If you believe you may be involved in a tax avoidance scheme, you should use HMRC’s interactive risk-checking tool. You can also report suspected tax avoidance online.


If you’re struggling, you can speak to a Samaritan at any time, any day of the year. Call for free on 116 123, or email


  • alla says:

    Right. You correctly point out that the scheme operators are not subject here – their promotion, management, etc of these scheme that lulled people into using their schemes were never in HMRC’s line of sight. They were presented as legal tax planning schemes at the time. And in fact they were – it is only the legislation applied retrospectively that made them illegal!

    You say: “The way the rule is applied has left many thousands of contractors facing significant backdated tax bills”

    Well, the truth is that the legislation was changed and applied retrospectively. There was nothing illegal with the schemes at the time that they were used.

    Oh, and there was no way to check whether a scheme was risky with “HMRC’s interactive risk-checking tool” then. The schemes were legal, so what was the risk.

    Anyway – I hope it is clear that the governance system can be as capricious as it likes. If it sees a pile of money it can write itself legislation to take that. And have the legislation apply into the past too.

  • Huw says:

    I went to a promotional meeting about the loan charge when it first raised its head. I’m no financial expert, but it was obvious from the start that it was a very dodgy methodology – the presenters even said they thought it would only be good for about four years, as the “loophole” would eventually be closed.

    The only people taken in by this were the greedy who actively wanted to avoid paying tax. I’m sorry that people have taken their lives, but in this (one) case, HMRC are not to blame.

  • JoJo San says:

    Needless complexity… yet again!!!

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