Useless if not negligent, the government’s system for investigating Loan Charge suicides is a sham that fails the bereaved

It took some time, several letters and numerous Parliamentary questions before HMRC and Treasury Ministers actually admitted that there have been suicides of people facing the Loan Charge, writes Sammy Wilson MP, Co-Chair of the Loan Charge and Taxpayer Fairness APPG and MP for East Antrim.

An awful reality, belatedly acknowledged

MPs began raising the awful reality of people killing themselves as a result of this unfair retrospective law back in 2018, but initial responses were of denial and deflection. Indeed in one case, an actual rebuke in the House of Commons from the then Financial Secretary to the Treasury for not caring as much about how much money the Loan Charge might raise as caring about the suicides.

Earlier this year, in a letter to the House of Commons Treasury Select Committee, HMRC admitted that there had by then been ten Loan Charge suicides. They also revealed that they referred themselves to the Independent Office for Police Conduct for ten cases. For any Government policy to have caused ten suicides is shocking enough, but what makes this even worse is that the UK Government have been warned again and again that suicides were likely unless they changed course.

A complete sham that fails 10 bereaved families

The Loan Charge and Taxpayer Fairness APPG had hoped that this tragic and unnecessary tenth suicide might at last lead to the much-needed change of heart (and of some commonsense) from Government, in realising that the Loan Charge and HMRC’s pursuit of it was flawed and dangerous. We had hoped that referrals to the Independent Office of Police Conduct (IOPC) would confirm what we already know from our evidence to be the case; that the Loan Charge and related HMRC action is pushing people to suicide. Alas, what it has instead shown is that the system for investigating cases of suicide and serious harm linked to Government policy is a complete sham and fails the victims’ families.

HMRC had been regularly quoting the fact that they had referred suicides to the IOPC and that there had been no findings of fault on their part. In fact, we have since established that the IOPC decided simply to refer a few cases back to HMRC for them to deal with and in even fewer cases, to carry out ‘internal investigations’. In other words, HMRC have investigated themselves and only in a minority of the cases, not surprisingly, they have concluded that they have done nothing wrong (or specially that no HMRC officer has been at fault, which is not quite the same thing).

Useless and actually negligent

We established, through the response from the IOPC, to our letter to them, that they had not made contact with any of the ten victims’ families. That is not even a cursory examination, never mind a proper ‘investigation’? We also established that, despite the clear link between the Loan Charge and the suicides (and other cases of attempted suicide and significant evidence of suicidal thoughts and feelings), that the IOPC don’t consider any such link, saying it’s not in their remit.

What this means is that there is no possibility of any proper consideration of the truth -- that the nightmare of facing the Loan Charge and associated unaffordable and life-ruining demands is pushing people to take their own lives. That means our system for investigating such suicides, linked to a government policy, is both useless and actually negligent.

Slapping grieving families on the face

What it also means practically is that all that actually happens is that HMRC refer to the IOPC (or the equivalent bodies in Scotland and Northern Ireland), to have them referred back for ‘internal investigation’, with no contact with the victims’ families and no consideration that the Loan Charge and associated demands were the primary reasons for the decision a person has taken to end their own life. It’s a farce, and it’s one that is also a slap on the face for the victims’ grieving families.

As a result of this, we have written to First Permanent Secretary and Chief Executive of HMRC, Jim Harra. We have asked if HMRC have contacted the families as part of the investigation and if HMRC has considered the Loan Charge and the demands, rather than merely looking at the conduct of any individual officer. Considering the fact that we (and other Parliamentarians) have warned again and again that there is a clear and serious risk of suicide from the Loan Charge, to ignore this as has happened is both cynical and shameful.

Learnings -- which are under wraps

In three cases referred back to HMRC by the IOPC, the IOPC ordered that HMRC carry out their own investigations. When reviewing the findings of these the IOPC identified ‘learnings’. Yet these have not been shared with MPs, meaning that once again, Parliamentary scrutiny of HMRC is not possible.

In their letter to the APPG, the IOPC stated: “The HMRC local investigation into one of the deaths identified learning regarding the way vulnerable customers are handled by HMRC. In addition, the IOPC Review identified further learning regarding the contemporaneous recording of information relating to contact with vulnerable customers on HMRC systems.”

This aligns with evidence shared with the APPG. We have been sent a worrying number of cases where vulnerable customers are still harassed and doorstepped despite HMRC saying they will not.

It is clear that another facet of the administrative incompetence is that different HMRC staff and departments do not properly communicate with each other. This means that vulnerable people have been contacted directly when they should not have been or been sent brown envelope letters when they should not have been. We are aware that in some of these cases they have been treated aggressively by HMRC staff in person or on the phone. These are all things that cause huge distress and have a serious impact on mental health, with the clear – and well-documented suicide risk -- this creates.

Unacceptable

We have not seen the report of the learnings and are not aware they have been published, despite all the attention on these tragic and unnecessary deaths. We also note that the IOPC have told us:

“In matters investigated locally, we reminded HMRC of its responsibility to keep those identified as interested parties to the investigation updated following the conclusion of our review”. The APPG is clearly an interested party, as are the families of the victims. The APPG certainly hasn’t been informed.

This is not acceptable. Now that it has been confirmed by the IOPC there are things HMRC needs to learn in relation to suicides, the learnings identified must be published (of course, with no identifying information about any of the victims). The issues identified by the IOPC as needing attention and the learnings accepted and acknowledged by HMRC absolutely should be made public, to show if and how HMRC is learning from failings in these tragic cases.

‘Serious injury’ cases of loan charge contractors are a worrying new learning of ours

We await to hear from Mr Harra -- and we also wait to hear about the referrals they have made for ‘serious injury cases’ which we did not know about previously. We suspect that these will include suicide attempts (the APPG is aware of at least one) so whilst there have been ten tragic and unnecessary Loan Charge suicides, there could well have been more.

Above all, therefore, as well as hearing of HMRC ‘learnings’, we need a system that actually considers the reality that the retrospective Loan Charge, and its utterly unaffordable demands, imposes on people, particularly now it is driving people to take their own lives, rather than systematically ignore it.

There is also the fact that people, who by and large were victims of mis-selling, have been demonised and made to feel like criminals, when all they did was to take advice as to how to structure their affairs. At the same time, those advisers, who were commissioned to sell their schemes (as legal and compliant) and the promoters and operators of the scheme are not being asked to pay a penny of the disputed tax, despite making huge sums, whilst those who were mis-sold the schemes face ruin and alas, in some cases, can’t see a way out.

Injustice, and its devastating impact

It’s this obvious injustice that is also behind the desperation and anger so many face, knowing that they acted in good faith and yet, unlike those who sought to exploit tens of thousands of workers, are being demonised as well as bankrupted.

The daughters of one of the suicide victims expressed this directly where they told us of their father’s suicide letter:

“He wrote about being at the end of his tether with the Loan Charge matter. He wrote such awful things about himself, things that just weren’t true, that he clearly thought about himself at the time. He wrote that he did not set out to do such wrongdoings; he wrote about being unable to speak to his GP about his anxiety as he was ashamed; his fear of going to prison, his disgust in himself for getting mixed up in the Loan Charge and his belief that he would now go to hell. [He] finished his pages and pages of his letter with ‘I can’t say any more. I’m so very scared of what I have to do today but I am at my wits’ end and can’t see any other way’. 1

It’s clear from the evidence we have had from several of the families involved or their professional advisers that the demands they were facing as a result of the Loan Charge is what pushed them to take their own lives. Yet these families are not contacted by the IOPC either before they decide on no action or an HMRC ‘investigation’.

We have had direct contact from families of three of the victims and in each case, they were clear that HMRC action related to the Loan Charge was what pushed their loved one to kill themselves. In two cases that we are aware of, the Loan Charge was mentioned in suicide notes. The daughter of the above victim stated of the suicide letter: “It was clearly written by a man who had been broken by the Loan Charge process. I believe that the entire Loan Charge situation, the build up to date, the false hopes of an end, for an answer, just consumed him”.

Callous indifference

So cruel is the Loan Charge, that bereaved families are still pursued for the demands HMRC are owed. Yet so far we see nothing but callous indifference from Ministers and HMRC who look the other way and are more interested in defending this draconian law than preventing more suicides.

We have also had testimonies from advisers of two of the victims, in each case their adviser was clear that the pressure from HMRC, as a result of the Loan Charge, was the reason the individual took the decision to end his life.

To ignore this clear link renders the investigations -- and the system of referrals as useless, but also negligent, in looking the other way, whilst hard evidence -- including family testimony and indeed suicide note content -- shows that the Loan Charge has pushed people to suicide.

The IOPC simply say: “The IOPC would not be able to offer an opinion on the merits or otherwise of the Loan Charge, which is a matter of tax policy and is for the Government to propose, Parliament to determine and, where necessary, the Courts to clarify.”

A cruel farce

It is not the IOPC’s fault, but it is a cruel farce when the evidence is widespread and compelling (and when, in truth, senior HMRC and Treasury Ministers are well aware of the serious suicide risk). The APPG has raised suicides with HMRC, the Treasury and with Sir (now Lord) Morse many times and there have also been numerous parliamentary questions and mentions. The Government and HMRC cannot possibly say they have not been warned.

Yet the flawed system allows HMRC and Government to ignore the link, which in reality they are well aware of and to look the other way, whilst making glib statements about ‘supporting’ vulnerable customers, when even their own processes regularly fail such people.

Ten Loan Charge suicides is ten too many and we need some compassion and commonsense from the Treasury and HMRC to resolve this whole mess in a way that avoids further suicides and suicide attempts.

The way out (includes a select committee inquiry)

A group of tax and accounting sector professionals have called on the Chancellor to engage and to agree to a resolution to the whole mess, for all caught up in the nightmare, but such a resolution would also allow HMRC to draw a line, when it is clear that they don’t have the resources to properly deal with so many people caught in this nightmare and when the whole ‘Loan Charge debacle’ to use Jim Harra’s own words, continues to damage HMRC’s reputation.

It is also time for the House of Commons Treasury Select Committee to launch an inquiry into an approach that has now caused ten suicides, but at the same time has failed to stop the mis-selling of tax avoidance schemes, with middle and low-paid workers now especially at risk of being duped into using these arrangements. Lessons must be learnt from a policy that has destroyed lives and failed to achieve its objectives.

The UK Government, including Rishi Sunak and Jeremy Hunt, must finally listen to change course and stop looking the other way; stop ignoring the clear link between the Loan Charge and the tragic and unnecessary deaths of ten people. Enough is enough. The Loan Charge Scandal must not cost any more lives. It’s time for a fair resolution.

1. APPG Loan Charge Inquiry April 2019, page 65-67, https://www.loanchargeappg.co.uk/wp-content/uploads/2019/05/Loan-Charge-Inquiry-Report-April-2019-FINAL.pdf
2. APPG Loan Charge Inquiry April 2019, page 65-67, https://www.loanchargeappg.co.uk/wp-content/uploads/2019/05/Loan-Charge-Inquiry-Report-April-2019-FINAL.pdf