The loan charge is linked to suicides and must be addressed - Karl Turner MP

Yet in a farcical situation, all too typical of the UK today, the Independent Office of Police Conduct refer the cases back to HMRC to conduct an internal investigation and, surprise surprise, they clear themselves of any wrongdoing. The absurdity is that family members and professional advisers of the suicide victims are clear that the Loan Charge and associated demands from HMRC are what pushed their loved one to take their own lives, yet this is not even considered in the whole process.

Back in February 2019, the APPG organised an evidence session and heard the harrowing testimony of one of the families. Their loved one – a husband, father and grandfather – wrote in his suicide note that the Loan Charge and the shame he had been made to feel had pushed him to the point of feeling he had no other choice but to take his own life. Other families have given similar testimony. Despite the fact that the system of investigating suicides doesn’t consider and therefore ignores this, it is clear that the demands related to the Loan Charge have led to suicides. Yet nearly five years on, another family suffers exactly the same unnecessary tragedy, because the Prime Minister and Chancellor refuse to change course. So cruel is the Loan Charge, that bereaved families are still pursued for the demands HMRC claim are owed. Yet so far we see nothing but callous indifference from Ministers and HMRC.

That’s why I have tabled a motion in Parliament, known as an Early Day Motion, to raise this whole scandal. Already over 100 MPs from all sides of the House of Commons have signed this to show their support. The hope is that at some stage we can have a full debate on this and further expose the truth about this scandal and the way the Government and HMRC have not been open and honest about the Loan Charge all the way through.

The Loan Charge is so devastatingly unfair because it allows HMRC to issue huge demands retrospectively, including when they hadn’t raised concerns and indeed had signed off tax returns. People have been faced with the choice of unaffordable ‘settlements’ which included admitting to deliberate tax avoidance or facing the Loan Charge. In both cases HMRC are demanding top rate tax, penalties and interest, but also Inheritance Tax, because the payments were loans. At the same time HMRC claim these payments were always income, they still also tax them as loans, which is completely unfair. On top of this, unscrupulous companies are demanding repayment of the loans, yet HMRC are still issuing demands for maximum taxation. It’s no wonder that some people tragically have taken their own lives. There is a real risk of further tragedies as HMRC have now issued unaffordable demands to many people in the form of discovery assessments. It isn’t a fair or sensible approach and is dangerous when people simply cannot afford what is being demanded of them.

I am absolutely clear that everyone should pay their taxes and pay the right amount of tax according to the law at the time.

Yet it is also clear, including from the APPG survey in 2021, that the tens of thousands of contractors who used schemes now subject to the Loan Charge did so not to avoid tax, but because they were told by professional advisers that (ironically) this was the least risky way to structure their affairs, due to HMRC clamping down on contractors using limited companies. Yet the approach of this Government has been to allow HMRC to ruthlessly pursue those mis-sold arrangements by professional advisers and slick promoters, whilst not demanding a penny from those who profited from these schemes.

One of the most galling parts of the scandal is the way duped workers are facing ruin, whilst those who the schemes took millions in fees from selling and operating them aren’t being asked to pay a penny.

It’s time for a wholesale change to this issue. The UK Government, including Rishi Sunak and Jeremy Hunt, must finally listen to change course and stop looking the other way, stop ignoring the clear link between the Loan Charge and the tragic and unnecessary deaths of 10 people.