HMRC refers four loan charge suicides

In April HMRC referred one case of suicide related to the charge to the IOPC.

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 impact of the charge has been so serious that a number of suicides have been reported in connection with the tax

Yesterday in the House of Commons, financial secretary to the Treasury Jesse Norman confirmed that HMRC had reported itself to the IOPC three times over suicides of individuals facing the tax. Two of the referrals had not required any further action but the IOPC had told HMRC to look further into one referral.

Later an HMRC spokesperson told the Financial Times that there were actually four referrals. “HMRC is aware that four customers, who we have been told used disguised remuneration schemes, have very sadly taken their own lives. We have referred these cases to the IOPC. A fourth referral was made to the IOPC this afternoon,” they said.

While the independent review of the loan charge is under way the tax will remain in force.