Chancellor Rishi Sunak must set up helpline to support people who feel suicidal due to loan charge, says action group

The Loan Charge Action Group (LCAG) has closed down its 24-hour volunteer helpline - which has been in place since 2018 - and has written to Mr Sunak telling him that the Treasury and HMRC now need to deal with the regular calls from people feeling suicidal due to the loan charge.

In statement, the LCAG said: “The helpline was put in place in 2018, when HMRC were asked in the House of Commons to set up a 24-hour helpline for suicidal people, but refused.

“There have been at least seven confirmed suicides of people facing the loan charge. In 2019, the families of some of those victims held a candlelit vigil outside HMRC in remembrance of their loved one.”

Steve Packham, spokesperson for the Loan Charge Action Group said: “LCAG volunteers have done an incredible job over the last three years, dealing with hundreds of calls from people facing the loan charge and with many of those expressing suicidal thoughts and intentions. They have done this whilst working and - in most cases - facing the loan charge themselves.

“They have saved several lives as a result.”

“Now however, volunteer call handlers are emotionally drained and cannot continue to operate the service.”

In the letter to Mr Sunak, the LCAG said: “It is now for HMRC and the Treasury themselves to take responsibility for suicide prevention and to set up a genuine 24-hour helpline for people feeling suicidal.”

Maria, a volunteer on the helpline for three years said: “It is heartbreaking that we find ourselves having to close this critical service to victims of the loan charge.

"The team has provided support to so many people who reach out to us at all hours. Initially those who called in were in shock, having just found out that they were subject to this charge and not even been aware that they had done anything wrong. People felt criminalised and were so ashamed that many could not discuss this issue with friends or even members of their own family.”

“We assisted people in navigating through the legislation and empowered them with the information needed for them to better understand their personal circumstances and regain focus. "We ‘buddied’ those victims who required extra support. We also referred many people on for further counselling. We also dealt with some victims who were on the brink of taking their own lives, resulting in us needing to call the emergency services. We also supported one another on the team.

“Over the years, we continued to take calls from people who were just finding out that they were impacted, however now over time these numbers have compounded, and the loan charge-related issues, such as loan recalls, have become more complex leaving the team of volunteers, none of whom are tax advisors, overwhelmed.

“It breaks our hearts that we cannot continue with the helpline, however we need to respect that the volunteers are only human, and also suffering the impacts of the Loan Charge themselves. We would like to thank each and every person who has volunteered their time on the helpline over the years - each call taken has been a potential life saved - and pray that the Government steps up to the reality of this punitive legislation”.

A Government spokesman said: “It wouldn’t be right or appropriate for HMRC, as a tax authority, to have a mental health support line. Our staff are simply not trained to deal with such things.

“We do have the support line for customers who want help to settle their affairs and get out of avoidance for good, and we do have an enhanced service for customers who are vulnerable and need support.

“But what LCAG are asking of us is not appropriate and that is why we do refer to professional organisations who have experience dealing with this, such as Samaritans and Mind.”

The loan charge, announced by Government in 2016, was designed to tackle tax avoidance schemes where individuals receive income in the form of loans that are not repaid to avoid income tax.

Following a public outcry, after thousands of people on modest incomes faced large and unexpected tax bills, the Government commissioned a review into the policy in 2019.

The review has not ended the controversy.

At least 134 Parliamentarians have signed a letter which warns the Prime Minister and Chancellor that thousands of people are facing bankruptcy due to the loan charge.

The open letter, which has been sent on behalf of the Loan Charge & Taxpayer Fairness All Party Parliamentary Group (APPG), claims the loan charge will have a devastating impact on thousands of UK families.

The APPG letter calls on the Prime Minister and Chancellor to find a "fair resolution” to the loan charge saga.

Evidence uncovered by the Loan Charge All-Party Parliamentary Group found that, in the vast majority of cases, these arrangements were not entered as aggressive tax avoidance and were often a condition of employment, especially in the public sector.

A substantial number of people, especially in the public sector, did not know or understand that their pay arrangements involved loans, the APPG found.

Labour leader Sir Keir Starmer has also said that HMRC has "urgent questions to answer" over its handling of the loan charge, in a letter seen by The Yorkshire Post.

Sir Keir has also revealed that he has ordered his Shadow Treasury Ministers to work with loan charge campaigners to prevent this type of controversy arising again.

Responding to concerns about the loan charge, a Government spokesperson has told The Yorkshire Post: “The loan charge was introduced to ensure those who used disguised remuneration tax avoidance schemes paid their fair share of income tax and national insurance contributions. It is only right that we continue to tackle these type of avoidance schemes as they deprive our public services of vital funding."

“We encourage anyone who is worried about paying the loan charge to contact HMRC so they can help. HMRC are committed to working with taxpayers to enter manageable payment plans to spread their tax liability and ensure that they are affordable.”

Sir Amyas Morse led an independent review into the policy in 2019 and concluded that it was right that the loan charge remain in force, the spokesman added.

"The Government recognised concerns around its impact, which is why it accepted all but one of the recommendations made, leading to significant changes in legislation.

"Sir Amyas Morse made clear in his report that his recommended changes to the loan charge policy applied to both individuals and employers, unless otherwise specified, as Finance Act 2017 did not draw a distinction between the two.

"HMRC will take action against schemes marketed as enabling contractors to pay less tax than they should. Contractors who are worried that they have been offered such a scheme can contact HMRC.

"Around 20 promoters have moved out of promoting altogether in the last six years due to HMRC activity." the statement said.

In November 2020 HMRC launched an awareness campaign “Tax Avoidance – Don’t get caught out” targeted at contractors in the IT, medical and oil and gas industries where promoters are particularly active.

The spokesman added: "This campaign advises taxpayers how to spot avoidance schemes, including those promoted by umbrella companies, explains the risks involved and where people can get more information to enable them to make informed choices if they want to leave an avoidance scheme.

Draft guidance, which is available at GOV.UK, shows how the Government is tackling tax avoidance promoters, the statement added.

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