MPs call for an urgent rethink of loan charge after suicides linked to tax bills

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.


  • Gary Andrews says:

    More gaslighting from the government and revenue, the 8 suicides are a direct result of the punishment strategy followed by HMRC which aims to push victims into bankruptcy.

    Like IR35, the money is not important to them but several Tory donors running schemes were at risk. The existing law rendered them liable after the Rangers verdict ruled the employer was responsible for the extra PAYE. Hence the retrospective loan charge to move the liability from employer to employee.

    Setting up a suicide helpline after illegally taking a person’s home, life savings, causing marriage breakdowns, loss of family, bullying from a well-funded Behavioural Insights department then claiming “Loss of life is complex and there is rarely a single cause”.

    Government never answer questions on this policy and move “heaven and earth” to prevent any discussion in parliament or select committees. They just repeat the propaganda and offer time to pay or PR helplines that don’t exist. Probably the same helplines they gave the Afghan interpreters and probably just as useful.

    Jim Harra already admitted there’s no legal basis for the loan charge, why does government not answer legitimate question posed by large groups of MPs, journalists, tax lawyers and the people effected. Like every bungled policy of this government, ministers will do anything to prevent it being examined in court where questions must be answered and truth must be exposed.

    • Alex C says:

      Investigative journalist Greg Wright of the Yorkshire Post is doggedly pursuing this story like Nick Wallis on the Post Office Horizon scandal.
      Why won’t Lord Morse respond to his or MP’s questions?
      Was Morse’s inquiry a sham?
      What are HMRC hiding from?

      • Arthur says:

        Lucy Frazer, financial secretary to the Treasury, is blindly ignoring the letter signed by members of the 245-strong All-Party Parliamentary Loan Charge and Taxpayer Fairness Group. Even Rishi Sunak has failed to answer MPs questions in the open letter!
        Conspiracy of silence.

        • Matt says:

          You do know Lucy Frazer’s husband David Leigh runs one of the schemes that was in the crosshairs for the PAYE liability. God knows who he could have leaned on to get him out of that one but the Tories managed to change the law and rewind time in order to land the end user with the bill.

  • Paul says:

    When are HMRC going to tackle this disguised remuneration scheme that’s been running for years and pays zero taxes of any kind, yes ZERO!
    Members of the House of Lords are paid an “allowance” for expenses rather than as a salary as an employee, they don’t have to pay tax or national insurance on it.
    It means if they attend 150 sitting days a year, they could pocket nearly £50,000 tax free.

    • Matt says:

      Brilliant, I didn’t realise you could do this. That’s my January tax return all sorted, forget income tax and NI, just write off all income as expenses. This should take me only a few minutes to file and save me a fortune, thanks for the tip.

      • XY says:

        Errr… no, try claiming that your income is all expenses and you’ll be seriously disappointed at the outcome.

        All business expenses are subject to scrutiny.

        Whatever the HoL is doing, it won’t be scrutinised by HMRC.

        • Johnny says:

          It’s about time we had some scrutiny of the HoL then.
          Baroness Mone is one of those voting these laws through. She and her husband, Doug Barrowman also ran a cluster of loan schemes via their Knox group and would have been bankrupted had they not cooked up the loan charge with their friends in cabinet to transfer the debt.

  • Stephen Birchall says:

    In jun this year I had enough of the stress of HMRC demanding money for the last 8 years. I did use schemes that were classed as tax avoidance I admit. But this was not tax evasion. I was told by the companies that offered theses solutions that it was in no way illegal. But somehow HMRC changed that retrospectively. My accountants told me that they also have no idea how they managed to do this retrospectively. Once it was clear to me that this scheme was not allowed I stopped using it.
    HMRC are claiming that I owe them around a quarter of a million pounds!
    I have zero assets, zero savings and tiny pensions.
    Yes, I have been hopeless in managing my money and that has meant that I couldn’t even repay that huge amount in ten lifetimes. So when the stress got to me and started affecting my health (physically and mentally) I decided that declaring myself bankrupt was the only way out.
    Now at the age of 68 I have three years of my life where I have to live like a hermit.
    I had a heart attack last week and that was probably caused by the stress of this whole mess.
    I am not alone in this situation and several people have committed suicide and others suffering mental and physical issues. Please can someone help us?

    • Barry says:

      Stephen – You’re not alone in this, I’ve been cleaned out of savings, pension and lost my house. I’ve been flippant in the past about the subsequent divorce but humour is the only way I can cope.
      It was legal tax avoidance, fine to change the rules but must only apply from the 2017 date it was changed. Retrospective taxation is a crime, it needs to be amended to prospective to save the lives of 50K from financial and mental nightmare.

  • XY says:

    The root of all this is the terrible tax system creaking at the seams.

    We have people who are classed as self-employed who pay no Employers NI (which is fine)…

    We have some self-employed whop are forced into a Ltd Co and they are deemed to be both an employee and employer, so they pay both sets of taxes (which is NOT fine).

    Root cause: no other country is so daft as to have any equivalent of Employers NI.

    And then there’s the IR35 debacle, having the fox in charge of the chicken coup whereby Sunak can roll out IR35 into the private sector, in a pandemic… when the consultancies who lobbied for it are the beneficiaries and… Sunak’s father in law is co-founder of Infosys, the 2nd largest Indian consultancy.

    You couldn’t make it up.

  • Aldo says:

    This article reports “It is a tax charge on any such loan taken out on or after 9 December 2010 and outstanding on 5 April 2019.”…. That’s incorrect.

    Like somebody posted above, I stopped using a Loan scheme in 2010 when they first said that future use of the scheme would be seen as income…remember when they said they wouldn’t apply retrospectively.

    We know that changed and I was deemed liable for tax pre 2010 like many others.

    I eventually gave up the fight and settled under CLSO.

    Please all also note…while hmrc are charging you tax on the loan and saying it’s income…you will still be charged inheritance tax when the loan eventually settles or on your death…also those who gave you the loan can ask for it back…so it’s never ending.

    Hmrc and Government have acted terrible in all of this.

  • Stephen Birchall says:

    Sorry to hear of sone other people that have also suffered (sone more than me too).
    To make it retrospective is unforgivable. It is making us feel like criminals when all we did was to try to legally reduce our massive income tax costs.

  • First They Came says:

    The Loan Charge has shown the people of this country how dangerous this government is. Anyone can be punished in future for obeying the law today. If Bojo wants what you have, he just takes it.

  • Mark says:

    Do you know they are not paying the voluntary restitution back as per the Morse review. They have changed the wording in the law that basically says if they missed it that’s OK as long as they could have seen it at the time. So voluntary restitution in any settlement means nothing, complete and utter criminal behaviour

  • Sorry for your problems says:

    So sorry to read these posts

    It’s a pretty shittie system that prosecutes the victim but hey that’s the UK financial systems

    I never understood why HMRC would chase down a £1 and pay £1000 to do it

    You should have been warned that it was wrong and you would be prosecuted if you did it again

    But then was it wrong ?

    If the tax systems does not outlaw it then is it wrong ???

    It always appears that HMRC have their own universe

    Stay strong, suicide is not the answer YOU can make things better for yourself

    Good luck

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