HM Revenue and Customs perm sec Sir Jon Thompson has called on campaigners to evidence claims the agency’s new “loan charge” on a type of tax-avoidance scheme has prompted multiple suicides.
The charge will seek repayments from thousands of people – often contractors or consultants – who utilised so-called “disguised remuneration” schemes over the past 20 years. Around 50,000 people are thought to have made use of schemes that disguised income as loans which were never intended to be repaid in order to avoid income tax and national insurance payments.
Earlier this week, MPs on the Loan Charge All Party Parliamentary Group said they had heard evidence that HMRC was aware of at least six suicides connected to payments shortly to fall due. In a letter to Thompson they said HMRC had “callously ignored” the suicide risk posed by the charge, and called for its 5 April introduction to be delayed.
In his response, Thompson said HMRC recognised the charge would have a “significant impact on some people” and that he was personally concerned about reports of people taking their own life that had been shared online and by the APPG.
Thompson said HMRC was aware that the campaign group the Loan Charge Action Group and other social media sources had made “a number of references” to people taking their own lives in relation to their charge liabilities since November last year. He said one complaint on the issue had also been lodged directly with HMRC.
However Thompson said the campaign group had not responded to the department’s requests for further information.
“Despite both direct approaches to individuals, and repeated requests to LCAG, no information has been provided that has enabled us to identify an individual that we can link to both taking their own life and the loan charge,” he said.
“Clearly, we refute any suggestion that we have failed to act in the appropriate manner.
“I would ask you to now share any information that you have with me as a matter of urgency. Where we can link that to a named individual, we will pass it to the Independent Office for Police Conduct within 24 hours, as part of their oversight of our work.”
Thompson said he feared that opponents of the loan charge and the APPG were not helping people they claimed to be representing.
“My concern is that the tone of some of the debate around the loan charge, and the spreading of unconfirmed rumours, risks creating additional concern for vulnerable customers,” he said.
“I would be grateful if the APPG could encourage them to contact us, because that is by far the best way for HMRC to support them. Constant tweets implying that the loan charge will be dropped and therefore people should hold off approaching us does nothing to help those with disguised remuneration liability.”
The APPG letter – signed by chair and former cabinet minister Ed Davey and vice chairs Ruth Cadbury and Ross Thompson – also said HMRC had been negligent in not setting up a dedicated 24-hour helpine for people facing the loan charge.
Thomspson said there had been “a number of exchanges” on the topic between HMRC and the LCAG and that the department had a dedicated helpline for tax-avoidance scheme users with around 40 call handlers, all of whom were trained to deal appropriately with vulnerable callers.
“Counselling is not an area of expertise one would associate with a tax authority,” he said. “We treat customers sensitively, signpost the relevant professional services, and help customers understand the options available to them.”
The loan charge was announced at Budget 2016 and was introduced in the Finance Act (No 2) 2017. It applies to loans made since 6 April 1999 if they are still outstanding on 5 April 2019.
HMRC said the policy was expected to bring in £3.2bn, three-quarters of which was estimated to come from employers and the remainder from individuals.
It said that so far around £1bn in advance payments had been collected, around 85% of which had come from employers.