The Loan Charge and Taxpayer Fairness All Party Parliamentary Group (APPG) made the comments after it was revealed by Financial Secretary to the Treasury Lucy Frazer that HMRC has referred nine cases to the Independent Office for Police Conduct where a taxpayer has taken their own life and used a “disguised remuneration” scheme.
In a letter seen by The Yorkshire Post, Ms Frazer said she was deeply saddened to hear about these cases and is working closely with HMRC to improve support that is given to people in difficult circumstances.
Eight investigations have concluded there was no evidence of misconduct by any HMRC officer; one investigation is ongoing, the letter from Ms Frazer says.
The APPG letter to the Chancellor, which has been signed by co-chairs, Sammy Wilson MP, Greg Smith MP and vice chair Baroness Kramer, states; " We have warned successive Chancellors and Treasury ministers of the serious suicide risk from the loan charge and the overall current approach of the Government and HMRC to people who were mis-sold these schemes by professional advisers, including chartered accountants and tax advisers.
It continues: "We have recently undertaken a call for evidence and are deeply concerned at how many respondents – 15% of all who responded – who have reported suicidal thoughts or intent.
"There is an identified suicide risk of individuals facing the loan charge. This was first reported to HMRC in June 2018 and raised in Parliament in July 2018. HMRC and the Treasury
were initially warned about the risk of suicides as a result of the loan charge by the Loan Charge Action Group."
The MPs say they have made several other references to the known suicide risk but so far all of those concerns have fallen on deaf ears.
The letter continues: "From the evidence we have been sent, including one of the suicide notes of one of the nine people, the Loan Charge was clearly a factor, indeed according to that family, was the reason their loved one took his own life."
The family were in no doubt – as with two other families of suicides victims that have been in contact with the APPG – that the threat of the Loan Charge was the main reason their loved one took their own life, the letter states.
It adds: "We therefore urge you, as the Chancellor of the Exchequer, to show some leadership on this issue, as well as some much-needed compassion and common-sense.. There is a pressing need, in light of this latest tragedy, for a review that is fully independent of the Treasury and HMRC, including looking at how the policy was conceived..
"There also needs to be an acceptance on the part of the Treasury that there must be a resolution, a genuinely affordable settlement opportunity, such as the one proposed by the group of tax professionals earlier this year. Such a resolution is clearly not only in the interest of those impacted and their families, but also the Treasury and HMRC.
The APPG describes the loan charge as disastrous policy that has failed on every level.
The letter adds: "It was supposed to stamp out the promotion, mis-selling and use of ‘disguised renumeration’ schemes, yet the reality is that the usage of such schemes has actually increased."
"We hope that at last you will agree that this whole scandal must be addressed so that further tragedies are avoided."
In a letter sent to an MP, Ms Frazer said the Government had decided that the loan charge is the right way to tackle “disguised remuneration” schemes and draw a line under their use.
Ms Frazer states: “These schemes are contrived arrangements that pay loans in place of ordinary remuneration, with the sole purpose of avoiding Income Tax and National Insurance contributions.”
In the letter, Ms Frazer says the Government takes concerns around the wellbeing of all taxpayers very seriously and recognises the loan charge can add significant pressures for some tax payers.
The letter states: "Following Lord Morse's independent loan charge review, the Government has taken further steps to mitigate the impact of the loan charge and to ensure that the right support is in place for those who need it."
A Government spokesperson said: “HMRC take concerns about the wellbeing of all taxpayers very seriously, and recognises that large tax liabilities can add significant pressures for some taxpayers.
“For taxpayers who may need specialised help, HMRC advisers encourage them to contact organisations such as Samaritans or Mind. Samaritans are available to provide emotional support 24 hours a day, seven days a week. HMRC continues to consider what additional support could be provided to taxpayers who need extra help.”
A Government spokesman previously 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.
“HMRC has already published settlement terms for those who have used disguised remuneration schemes. We encourage anyone who is worried about paying the Loan Charge to contact HMRC so they can help. HMRC is committed to working with taxpayers to enter manageable payment plans to spread their tax liability and ensure that they are affordable.”