Heartbreaking evidence of anguish caused by loan charge cannot be ignored - Greg Wright

Evidence continues to emerge of the ongoing suicide risk caused by the loan charge, which was introduced to target tax avoidance schemes that sought to avoid income tax and National Insurance contributions by paying earnings in the form of loans.

In 2019, there was an outcry when thousands of people on modest incomes faced large, unexpected tax bills. MPs uncovered evidence which revealed that, in the vast majority of cases, people facing the loan charge had simply acted on professional advice. They had not set out to avoid paying what was due to HMRC.

Changes were made to the policy following Lord Morse's review, which reduced its impact, but the indefatigable Loan Charge and Taxpayer Fairness All Party Parliamentary Group (APPG) is calling on the Government to find a “fair resolution” to the scandal in order to save lives. I have received testimony which provides an insight into the trauma inflicted on honest, law-abiding people by this controversial policy. I’ve been contacted by a woman who said her husband’s life has been made hell due to the loan charge. According to the woman, her husband has been bombarded with letters and phone calls in connection with the charge.

She added: “This has had a profound effect on my husband's physical and mental health. He has contemplated suicide many times and attempted to take his own life once, thankfully I woke up and found him downstairs before he had the chance to take an overdose. I'm so frightened that I am going to lose my soul mate. My husband is in a very dark place.”

A HMRC spokesman said: “We never forget that there’s a human story behind every unpaid tax bill. No-one is more aware of that than our settlement teams, who have supported more than 20,000 customers to settle their use of disguised remuneration schemes. This has secured more than £3bn for the UK’s essential public services. We have slashed losses to tax avoidance schemes for individuals by more than two thirds over the last decade.”

To undermine these promoters, HMRC has published details of 33 tax avoidance schemes over the last year. It has also issued 13 stop notices since August 2022 legally requiring a promoter to stop promoting a tax avoidance scheme, the spokesman said. HMRC advisers also encourage taxpayers who need specialised help to contact organisations such as Samaritans or Mind. The fact remains that MPs continues to uncover evidence of “a deeply worrying” number of people who have referenced suicidal thoughts in connection with the loan charge. For many people, the loan charge is simply a nightmare, as Mr Murray testifies. More than 150 Parliamentarians have now signed the letter to the Prime Minister and Chancellor calling for a fair resolution to this saga. Will they ever listen?

Greg Wright is the deputy business editor of The Yorkshire Post