Workers ‘driven to attempt suicide’ by HMRC’s loan charge repayment demands

‘Each letter that you get, or each email or phone call, is akin to death by a thousand cuts. It’s just always chipping away, and you’re always terrified of the next one coming.’

This is how one worker described the stream of correspondence from HMRC demanding he settle a crippling tax bill his employer had failed to pay.

Tens of thousands of people across the UK have been affected by the loan charge – a controversial tax avoidance clampdown which has been linked to 10 suicides.

Another dozen have attempted to end their lives after being driven to despair by the injustice, which has been likened to ‘another Horizon scandal’.

Speaking to Sky News, one worker described overdosing after being overcome by the financial and psychological burden.

Dylan, not his real name, claims HMRC contacted him again while he lay in hospital recovering.

Another victim, an IT contactor speaking under the alias Mark, told the broadcaster he stepped in front of a minicab after being pursued for £60,000 over seven years.

He told the broadcaster he was initially ‘very naïve’ and called HRMC to tell them they had made a mistake, expecting ‘everyone would laugh or walk away from the table’.

But that wasn’t what happened.

‘Ever since that point, I’ve been under that constant pressure of feeling the impact of this loan charge on me,’ he said. ‘It hasn’t stopped.’

He says HMRC also contacted his partner asking after his whereabouts while she was in hospital being treated for breast cancer.

The loan charge policy typically targeted freelancers or self-employed contractors who were paid their wages via a third party, often an umbrella company.

Some of those firms were actually operating a tax avoidance scheme which would see staff paid in the form of loans.

Deductions on pay slips which appeared to be for tax and national insurance were in fact fees pocketed by the promoters.

Many of those caught up in the scheme had no idea what was really happening.

The loan charge was introduced in the 2016 Budget as a measure to claw back those unpaid taxes.

But there has been anger at the way HMRC is now chasing individuals for sums often totalling tens of thousands of pounds.

The agency has been accused of targeting individuals instead of the organsiers, many of which are based offshore, because it represents an easier route to get the money back.

Another worker, who did not wish to be named, told the broadcasted they had been ‘been thinking about suicide for a little while’ as the letters came in.

The man described pausing while chopping up food to hold the knife to his wrist and thinking ‘it would be a relief to just get it done’ before being ‘shocked out of it’ by his son walking in.

MPs earlier this year called for a fair resolution and ‘full independent investigation’ for the loan charge to avoid ‘another Horizon scandal’.

DUP MP Sammy Wilson said there are ‘frightening parallels’ between the loan charge and the Post Office-linked injustice, which saw more than 700 branch managers handed criminal convictions after faulty Fujitsu accounting software made it appear as though money was missing.

Mr Wilson and other MPs tabled a parliamentary motion that warned many people are facing ‘unaffordable demands’, there is the ‘risk of further suicides’ and that a review conducted by Lord Morse was ‘limited and not genuinely independent’ of the Treasury and HMRC.

They called on the Government to work with all parties to find a ‘fair resolution and for a full independent investigation, including into the conduct of HMRC’.

Treasury minister Nigel Huddleston has said there has been ‘scaremongering’ surrounding the loan charge and urged people with concerns to get in touch with the revenue agency.

He told MPs calling for a ‘truly independent’ review following reports of suicides, relationship break-ups and mental health breakdowns: ‘With regards to the suicides he’s mentioned, of course that concerns us and of course independent reviews (have) taken place.

‘But I do want to provide the House and anybody listening with the reassurance that the best thing to do if they’ve got concerns is engage with HMRC, because very generous and long-term plans can be put in place to help people repay.

‘And also, as I said, there are fears out there… there’s a bit of scaremongering about homes being taken over or having to give up pensions. That is not the case.

‘And therefore engagement with HMRC to establish reasonable time to pay would actually be reassuring for many of the people who fear much worse consequences.’

An HMRC spokesperson said: ‘We appreciate there’s a human story behind every unpaid tax bill and we take the wellbeing of all taxpayers very seriously. We recognise that dealing with large tax liabilities can lead to pressure on individuals and we are committed to identifying and supporting customers who need extra help, and we have made significant improvements to this service over the last few years. 

‘We have support in place to help customers who have used a tax avoidance scheme to settle their use. This includes paying by instalments in a Time to Pay Arrangement. The arrangement we agree will be based on what the taxpayer can afford and there’s no upper limit over how long we can potentially spread payments. 

‘Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about your options.’

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