Ninth loan charge contractor commits suicide, following Treasury minister receiving ‘deeply worrying’ evidence

A UK tax policy regarded as so damaging to people’s lives that HMRC was begged to set up a suicide prevention helpline – but refused, has tragically claimed the life of a ninth person.

Addressing a 250-strong group of MPs critical of the policy -- the loan charge, the Treasury said HMRC now knows of “nine cases” of suicide linked to Disguised Remuneration.

Lucy Frazer, financial secretary to the Treasury, was slated after making the disclosure, because it was said to be the first time the minister has spoken of DR since ducking the MPs.

'Deeply worrying evidence'

In fact, faced with “deeply worrying” evidence about the loan charge’s impact on taxpayers, including a risk to life, the Loan Charge and Taxpayer Fairness APPG wrote to the minister.

The cross-party parliamentary group also asked Ms Frazer a series of pertinent questions; proposed a “fair resolution” to the charge to help head off suicides, and requested a meeting.

To the letter; the questions, the face-to-face request and the proposal -- drawn up to release people from bankruptcy-triggering HMRC liabilities, the minister gave no reply. To any of it.

'Had used a DR scheme'

Now, in wake of a ninth person who “had used a DR scheme” (as Ms Frazer put it) committing suicide, HMT was asked on Sunday if the minister might now reply to the MPs.

But ContractorUK’s question, plus reminders to answer has not produced a statement by HMT -- which did reply, albeit only to say it did not understand what was going to be reported.

The co-chair of the Loan Charge and Taxpayer Fairness APPG, Greg Smith MP, has made his feelings known to ContractorUK however, as has lobbyist-turned-support group LCAG.

'I have no words'

Yet it is Sarah Gabbai, a lawyer, who best captures the prevailing sentiment that the ninth life lost to the loan charge could have been saved, maybe more so than the eight preceding lives lost.

To confirmation the death toll of a tax policy has now somehow risen to nine lives, co-author of the ignored proposal to bring taxpayers back from ruin, Gabbai said: “I have no words.”

Mustering up some words, despite also being distressed and further like Gabbai, offering condolences to the ninth loan charge victim’s family, Mr Smith said it was “heart-breaking”.

'Consistent warnings of loan charge suicides'

“[This is the] ninth person who has tragically taken their life facing HMRC action,” the Conservative MP told ContractorUK.

“Since it was formed in 2019, the APPG has consistently warned of the serious risk of self-harm and suicide from the loan charge, and the fact that people cannot challenge HMRC’s disputed tax demands.”

Meanwhile, Steve Packham of the Loan Charge Action Group said: “This is another family whose lives have been shattered, another needless and completely avoidable tragedy."

'Culpable'

He added: “Government and HMRC cannot any longer mislead MPs over the loan charge. They have been warned again and again that without a change in position, there would be more suicides.

“And now sadly, but predictably, there has been one. Treasury ministers, past and present, who have ignored this, are culpable.”

Reaching out on Twitter to the current Treasury minister whose remit covers the loan charge, Ms Gabbai posted: “If, Lucy Frazer MP, you are aware of this [ninth suicide], and are in a position do something about it [happening again], why the silence?”

'Wholly unpractical'

An associate at law firm McDermott, Will & Emery, the lawyer added: “Even if you disagree with the merits of our proposal, please understand that the status quo cannot continue as it is wholly impractical”.

Last year, an APPG survey showed that the majority of people affected by the loan charge were not warned about the risks of using DR schemes, even though they took professional advice.

“Yet now they face unaffordable retrospective demands,” says the group’s co-chair Mr Smith. “[But] those who recommended and promoted the schemes are not being asked to pay any of the disputed tax.”

At LCAG, Mr Packham echoed: “Another person has died [at their own hand while] facing action from HMRC, simply for following professional advice with regards to how to structure their contracting.”

'Tory leadership candidates, and chancellor Zahawi, should show leadership on loan charge'

A former contractor, Mr Packham said the three remaining Tory leadership candidates should “show leadership” on the loan charge including “being honest” about its impact.

Whoever is victorious out of former chancellor Rishi Sunak, former international development secretary Penny Mordaunt, and foreign secretary Liz Truss, should also agree to a resolution to the charge, “before even more lives are lost,” he added.

But the APPG’s co-chair MP Mr Smith will be calling on his Conservative colleague Nadhim Zahawi to intervene, to stop desperate taxpayers feeling as if they have no choice but to take their own lives.

“We implore the new chancellor to show some compassion, as well as some common sense, realising that people simply cannot pay the sums demanded.”

In his statement last night, Mr Smith continued to ContractorUK: “It makes no sense to drive people to bankruptcy and breakdown. We urge the Treasury to implement the proposal put forward by respected tax professionals and to do so before more families risk being torn apart.”