MPs are urging the government to offer a suicide prevention helpline for those affected by the loan charge
The All-Party Parliamentary Loan Charge and Taxpayer Fairness Group (APPG) has written to the chancellor, urging the government again to rethink the controversial loan charge.
The move comes after seven confirmed cases of suicides were linked to those facing large tax bills relating to the charge.
The letter, seen by Contractor Weekly, stated that there is an “identified and serious risk of further suicides.”
The loan charge was introduced in 2016 to tackle loan schemes, which were considered non-compliant disguised remuneration arrangements used by the self-employed.
It is a tax charge on any such loan taken out on or after 9 December 2010 and outstanding on 5 April 2019.
Tax demanded by HMRC ‘never been legally proven’
The letter, written on behalf of the 245 members of the APPG, noted: “The sums demanded for tax that has never been legally proven to be due, are for many simply unaffordable irrespective of payment terms.
“These devastating amounts are having a seriously detrimental impact on people’s lives and those of their families, inevitably resulting in many bankruptcies and the potential loss of people’s homes.”
It goes on to state that HMRC and the Treasury must “take responsibility for the predictable impact” of the loan charge:
“The reality is that this was implemented to compensate for HMRC’s abject failure to close down these schemes or to adequately warn taxpayers not to use them.”
HMRC’s response to setting up loan charge helpline is ‘unacceptable’
The APPG is now encouraging the government to set up a 24-hour suicide prevention helpline for those affected by the loan charge after the volunteer helpline closed.
The tax watchdog previously said in response to the group’s call: “It would be inappropriate for HMRC, as a tax authority, to set up a helpline for those in severe mental distress.
“For taxpayers who need specialised help, HMRC advisors suggest they contact organisations like Samaritans or Mind.”
The APPG said this was not acceptable, because HMRC is implementing a policy that they and the Treasury “know has been linked with suicides and linked with the risk of further suicides.”
Morse Review was flawed
The letter, which has been signed by the group’s co-chairs Sammy Wilson MP, Greg Smith MP and Mohammad Yasin MP, said: “We do not think it is acceptable to push the responsibility for dealing with calls of suicidal people onto charities.
“[…] We also believe that HMRC themselves must take responsibility for the inevitable catastrophic impact the loan charge continues to have on people’s mental health.”
It went on to add: “We continue to implore you to look at the evidence that has emerged since the Morse Review and accept that the conclusions of that review were therefore flawed and so a further independent review is needed.”
Responding to the letter, Andy Chamberlain, director of policy at self-employed trade body IPSE, said: “IPSE remains deeply troubled by the loan charge and news of further suicides reinforces our concern.
True villains are the providers of the schemes
“Our thoughts are with the families of the people who have taken their own lives as a result of the charge. The human cost of this ill-conceived policy must be taken into account and we are grateful to the APPG which continues to press the government on this.
“The true villains of this story are the promoters and providers of disguised remuneration schemes. Government should have focused its sights upon them rather than targeting individuals who entered into the schemes – in many cases unwittingly.
“By refocusing HMRC’s energy on the people who sold loan schemes, government could enable a more lenient and less damaging approach to be taken to the people who used them.”
A spokesperson for HMRC told The Guardian: “Loss of life is complex and there is rarely a single cause when someone takes their own life. HMRC will cooperate fully with any inquest where asked to do so. We take concerns about the wellbeing of all taxpayers seriously and recognise that large tax liabilities can add significant pressures for some taxpayers.”
Earlier in 2021, Labour leader Sir Keir Starmer, said HMRC had “urgent questions” to answer over its handling of the charge.