Raymond Doherty 6 Nov 2019 10:46am

Loan charge causing suicides and family splits, says APPG

More than 90% of taxpayers facing the HMRC’s loan charge say they live in a state of panic and the risk of suicide remains high

A new survey conducted by the Loan Charge All-Party Parliamentary Group (APPG), in which 2,086 people participated, has revealed that 40% of people have seriously contemplated suicide (this has remained consistent since March 2019).

The responses show the psychological pressure the policy is exerting on those who could be liable. At least a third have sought medication and/or counselling to cope with the situation.

HMRC has already had to refer four incidents involving the suicide of an individual related to its loan charge to the Independent Office for Police Conduct (IOPC). According to the APPG, one participant gave details of a person committing suicide following a visit from debt collectors acting on behalf of HMRC. It adds, “The facts given indicate that this case is not one of the seven cases that the APPG is already aware of.”

The loan charge policy is currently subject to an independent review following months of pressure from MPs, taxpayers and campaigners. The charge came into effect on 6 April and applies to anyone who used so-called disguised remuneration schemes.

The legislation added a 45% non-refundable charge on all loans advanced through the schemes – some of them dating back to 20 years ago – unless the individual had agreed with HMRC to settle their tax affairs beforehand.

However, many of the 50,000 people caught up in the issue are low paid, such as nurses and social workers, and were persuaded by their employers to join the schemes. Many of them are facing bankruptcy.

Yet, at the time the schemes were set up, HMRC did not question their legitimacy. The APPG survey also shows that two-thirds of families have either already broken down or are facing breakdown and three-quarters of people are still fearful that they may lose their home regardless of HMRC’s statements. So far 60 families have lost their homes.

In addition, only a quarter of people received settlement figures from HMRC prior to April 2019 while a third say they have never been formally told by HMRC about the loan charge.