Either Liz Truss or Rishi Sunak risk joining the list of culpable officials with nine loan charge suicides on their watch

Contractors now know that the two candidates to become the next leader of the Conservative Party and next prime minister are Rishi Sunak, the former chancellor, and Liz Truss, the foreign secretary. 

History rhyming, if not repeating itself – tragically too

And as in 2019, when Boris Johnson beat Jeremy Hunt, the contest for the ultimate crown in UK politics will take place over the summer. 

Further like that contest three years ago, the outcome of the Tory leadership race 2022 could have a significant impact on the thousands of families affected by the loan charge and the unfair HMRC demands, given that those caught by the HMRC policy were using arrangements recommended to them by trusted professional advisers, writes Steve Packham, co-founder of the Loan Charge Action Group (LCAG).

Last Friday, the awful disclosure was made that there has been another loan charge suicide. This is the ninth person who had been facing ruthless pursuit from HMRC simply for following professional advice, who has taken their own life.  It’s another needless death caused directly by an immoral policy that has allowed the UK’s discredited and out-of-control tax authority to retrospectively issue tax bills, with ordinary people unable to challenge those bills. 

Who will be made responsible for this ‘debacle’?

It is hard to predict who the next prime minister will be, and harder still to foresee who they will choose to head up their Treasury and take responsibility for, as HMRC boss Jim Harra referred to it, the ongoing loan charge “debacle".

What we are hopeful of, however, is a change to the Treasury team and a replacement for the utterly disinterested financial secretary Lucy Frazer, who has simply looked the other way and offered only meaningless platitudes, despite knowing that without a change of position in relation to the loan charge, there is a serious risk to the health and wellbeing of thousands of people and their families.

You would think that, where there is a clear and proven link between suicides and a government policy, ministers would at least call for a pause and a further review, especially following the Post Office scandal. But no, not a bit of it.

Shameful, shocking

What is shameful, if not shocking, is that from the top down, HMRC and the Treasury knew full well that the suicide risk linked to the loan charge is very high and they refused to listen and act. The unofficial message from both institutions (a statement from HMRC, handed to ContractorUK yesterday on behalf of HMT is italicised and underlined, below) is that, when it comes to defending a discredited and dangerous policy -- and covering up for HMRC’s failures and deceit, the lives of those facing the loan charge don’t seem to matter. So those professionals who arranged their work in a way that HMRC later decided it didn’t like are, in effect, expendable and the fact that nine families have been bereaved in this most tragic of ways does not warrant any action by officials. It should be shocking. But for all those who have followed this extraordinary scandal at the very heart of Whitehall, it is not.    

What is even more shocking than Ms Frazer’s attitude in light of the latest suicide is the fact that the Treasury can’t even be straight with people over the investigations into these tragic deaths.

In her letter to MPs, where she confirmed the latest suicide, Lucy Frazer stated, “HMRC has referred nine cases to the IOPC [Independent Office of Police Conduct] where a taxpayer has sadly taken their life and had used a DR scheme. Eight investigations have concluded there was no evidence of misconduct by any HMRC officer; one investigation is ongoing”.

The taxman marking his own homework

Yet as the Treasury know full well, not all (if any) of these investigations were actually conducted by the IOPC. The IOPC sent these back to HMRC to investigate themselves.

Ms Frazer of course did not clarify this, giving the false impression that the IOPC had investigated themselves and exonerated HMRC. They did not. 

As the highly respected tax barrister Keith Gordon commented on Twitter: “That was an aspect of the loan charge debacle that I had not previously appreciated. Last week's letter from the FST...did not make it very clear that it was carried out by HMRC”.

Of course, the arguably bigger issue is not whether the suicides might have been precipitated by the action of any HMRC officers (even though we know from our own members that the aggressive and callous attitude of some HMRC staff has indeed caused huge distress to people); it is the still-in-place policy and the cruel legislation that has led to these deaths.

The bereaved families all say the same

Us at LCAG have had contact from several of the bereaved families and in other cases, from their advisers. In every case, the family or adviser has been in no doubt that it has been the loan charge -- and HMRC’s enforcement of the loan charge -- that has been the reason that their loved one decided to take their own life.

As former HMRC lawyer and solicitor-advocate Dr Osita Mba says:“HMRC and the Treasury are using the IPOC as a dishonest distraction. Their remit is misconduct by individual officials not policy failures. Pre-legislation impact assessment etc are designed to prevent such calamities and when they fail so badly an inquiry is needed”.

That inquiry, also called for by the Loan Charge and Taxpayer Fairness APPG, is indeed needed -- and urgently, before there are any more loan charge suicides.

What HMRC/HMT says of the ninth taxpayer taking their life over its policy

In response to the disclosure of the ninth taxpayer taking their life, a government spokesperson said:

“HMRC take concerns about the wellbeing of all taxpayers very seriously, and recognises that large tax liabilities can add significant pressures for some taxpayers.

“For taxpayers who may need specialised help, HMRC advisers encourage them to contact organisations such as Samaritans or Mind. Samaritans are available to provide emotional support 24 hours a day, seven days a week. HMRC continues to consider what additional support could be provided to taxpayers who need extra help.”

Taxpayer Fairness, Mr Sunak, Ms Truss?

Our hope, now, is that in light of the latest tragic suicide, whatever changes there are at the top of government will lead to a change of position on the loan charge and HMRC’s whole strategy. Alongside the increasingly acrimonious and well publicised ideological battle between Rishi Sunak and Liz Truss as to whether or not there should be tax cuts now, the two candidates should be asked if they believe in ‘taxpayer fairness’ and the basic, but essential right, of any truly democratic citizen to challenge demands made of them by the state, by the tax authority.

This right exists in other countries, but in the UK it does not -- and HMRC act as judge, jury and as we have now seen nine times, as de facto executioner when it comes to pushing people over the edge, demanding punitive sums they know people simply cannot pay.

Now that there are nine confirmed loan charge suicides, and many more people reporting suicidal thoughts or intent, the question the government must answer is why they have ruthlessly pursued only those who used these arrangements -- and not those who recommend and operated them, or the companies and organisations that also wanted people to operate in this way.

A genuine, independent review of the loan charge is vital

The only deliberate tax avoidance was by those end-clients who avoided paying employers national insurance, as well as not offering employee rights and benefits. It is time for a genuinely independent review that, unlike the compromised review undertaken by Sir  Amyas Morse, looks at the loan charge scandal as a whole.

We can but hope, continue to campaign and work with the now 250-strong APPG. We call on all who oppose this injustice to push the next prime minister and their team to commit to act, to help stop the suicides and to agree to work towards a resolution. With the help of supportive Conservative MPs we need to make this a leadership election issue. Three years ago, the broadcaster Iain Dale asked a question during a hustings which led to the Treasury reluctantly being pushed into conducting a review of the loan charge, albeit one now exposed as restricted, biased and flawed.

What the wannabe PMs should be asked about the loan charge

We hope that this time the two candidates will be asked to make a commitment. The question to them at hustings should be this:

‘Knowing that there is a serious risk of more loan charge suicides, following nine such tragedies confirmed by HMRC, are you going to refuse to revisit this policy knowing more such suicides are likely, or will you now commit to a genuinely independent review of this whole scandal as well as agreeing to find a fair resolution to end this nightmare for thousands of families?’

We know politicians are not very good at answering questions. But surely they can neither ignore the suicides nor say they do not know that there is the risk of more.

To ignore this risk would be not only heartless but also, surely, negligent. If this were a company, they’d surely be tried for corporate manslaughter. So why is it different when a UK government policy pushes people to their deaths, having been told that this risk existed?

Finally, the culpability list

This summer will be dominated politically by the leadership election campaign, so LCAG calls upon both Rishi Sunak and Liz Truss to pledge to commit to both undertaking a genuinely independent review of this scandal, as well as to finding a fair resolution to end this nightmare for the thousands of families impacted before more lives are lost.

The call for justice is getting louder and surely this latest suicide must be something that leads even the loan charge apologists in parliament to think again. When it comes to the loan charge, whoever enters Number 10 Downing Street on September 5th must choose to act and save lives or they will join the long list of those who are culpable. We hope they will choose the former and end this nightmare for tens of thousands of families.