Thousands are being targeted by harsh HMRC tax-collecting scheme linked to 10 suicides
Four years ago, Michael Squires received a letter that turned his life upside down.
A brown envelope containing a tax demand for £24,000 landed on his doormat.
It came out of nowhere and gave Mr Squires sleepless nights as he worried about where he would find the money.
“It’s a horrible anxious feeling, I knew that I had taken due diligence and I knew that I had done what I thought was right,” he said.
“So, you feel the system is against you, you feel like you can’t fight back. In a way, you know that you’ve been conned, and you feel stupid… and I felt that for quite some time.”
Mr Squires, a healthcare worker from Leicestershire, is not alone.
‘Unjust campaign is targeting wrong people’
Tens of thousands of people across the country are facing crippling tax demands from HMRC in a harsh campaign that has been linked to 10 suicides.
HMRC has been ruthlessly pursuing people with the “loan charge” which came into force in 2017 through a piece of legislation that targeted those who were paid their salaries through loan schemes. It made individuals liable for tax that their employers should have paid.
Tax lawyers described it as an unjust campaign that is targeting the wrong people and undermining the rule of law by overriding statutory taxpayer rights.
HMRC has been targeting workers who had their salaries paid into umbrella companies, which would pay individuals a loan that was typically not paid back. Many of those who signed up, including nurses, supply teachers and council workers, had little or no choice but to take on work through these schemes.
They were directed to the schemes by their work agencies, reassured that their tax and national insurance was being taken care of and that the schemes were HMRC compliant.
In many cases, they were mis-sold.
Tens of thousands in fear of bankruptcy
For years HMRC failed to act against these schemes, which resulted in widespread underpayment of income tax and national insurance. The courts have since ruled that the employers or agencies should have been paying tax to the exchequer. However, the loan charge legislation allowed HMRC to pursue individuals in lieu of the agencies or employers.
Five years ago HMRC started sending letters to individuals, explaining that these schemes were “disguised remuneration schemes”, imposing a tax liability on what it now classified as income and applying interest – then urging them to settle.
In some cases, the bills ran into the hundreds of thousands of pounds. Those who could or would not pay were warned that they would be hit with a loan charge, typically a much larger amount because the total sum was taxed in a single year, often applying a 45% tax rate on the income. It meant that in many cases people were paying back far more than they would have done if they weren’t part of the schemes.
HMRC threatened to take people’s possessions and sell them at auction if they didn’t find the money.
In some cases, the agency set up payment plans, but in others, people had little choice but to take out further loans.
Tens of thousands of people are still living in fear of bankruptcy, and they could be forced to hand over cash if and when they sell their homes.
The consequences have been devastating.
Warning of further suicides
Sky News has spoken to families whose lives have been torn apart. One woman told us that her marriage was breaking down, while others described dangerous mental health spirals.
HMRC has admitted that there have been 10 suicides linked to the loan charge.
It has referred cases of suicide to the Independent Office for Police Conduct (IOPC), which oversees certain serious complaints about the conduct of tax inspectors.
Campaigners have repeatedly warned of the risk of further suicides and have demanded that HMRC provide a 24-hour suicide prevention helpline.
Mr Squires said: “We are being pursued by a very big organisation who hasn’t warned us. I received a warning letter four years later that I may have been employed by a company involved in a scheme that wasn’t legitimate.
“So, we’ve had no warning. HMRC is not out of pocket. The umbrella companies aren’t out of pocket.
“The agencies that pushed it aren’t out of pocket. It’s only the end worker and we’re just normal people.”
Michael Squires says he felt like the system was against him
HMRC targeting individuals rather than scheme organisers
While some of those who engaged in loan schemes entered into them with the explicit intent to minimise their tax bills, a large number were simply trying to do the right thing.
In many cases individuals were advised by their work agencies to sign up to the umbrella companies to streamline their tax affairs, helping them to avoid the complicated process of setting up a limited company.
Others turned to the umbrella companies because they were worried about falling foul of new IR35 rules that apply to contractors operating as limited companies.
The NHS, local authorities and other public sector organisations all engaged workers who were part of these schemes.
Back in 2021 HMRC even admitted that it had at least 15 contractors on its own books who were part of “disguised remuneration schemes” between 2016 and 2020.
Read more from Sky News:
Asylum seekers moved from taxpayer-funded hotels – to other hotels
Warning about huge number of Facebook Marketplace scams
Toddler found starved to death – prompting questions for police
Keith Gordon, a tax barrister, said: “When the contractors were paid, the PAYE rules applied and were meant to ensure the tax was deducted from the salary before it was received by the workers.
“That PAYE was not paid. The workers suffered a deduction but that was just simply taken as fees by the promoters of the schemes which were running rather dubious tax avoidance of agents without contractors’ knowledge.”
He suggested that HMRC were targeting individuals instead of the organisers of the schemes because it was an easier way of recouping the money.
Mr Gordon continued: “Number one: The promoters have deeper pockets and might be able to fight back against unfair legislation.
“Number two: That would probably amount to admitting the revenue made a mistake in the first place.
“Number three: Some of these promoters are now insolvent because they’ve had plenty of years to wind up their affairs and become out of the reach of the tax authorities.”
Keith Gordon said HMRC is targeting individuals because it is easier
Loan charge has ‘no legal basis’
MPs and tax lawyers are calling for HMRC to rescind the policy – arguing that it amounts to a retrospective charge that overrides taxpayers’ statutory protections by effectively dismissing time limits on HMRC’s right to investigate tax affairs and by blocking individuals’ rights to fight their case in court.
It is also without any legal precedent.
The courts have repeatedly rejected HMRC’s interpretation that income tax can be applied on loans to individuals.
A 2017 Supreme Court ruling put the onus on the employer to deduct income tax before loans were advanced to an individual.
A 2019 parliamentary report concluded that “the loan charge is in defiance of the rulings of the court… no court case has given the legal basis for the loan charge”.
MPs are preparing to debate the loan charge in parliament today, where they will hear that tens of thousands of people were the victims of widespread mis-selling.
They will question why HMRC is not putting more energy into targeting the promoters and companies responsible for these schemes.
These companies made their money by charging individuals a fee to run the loan schemes. It meant that in many cases people had similar deductions to what they would have had if they were under PAYE.
David Davis, Conservative MP for Haltemprice and Howden, said: “The loan charge has been, frankly, a government-sponsored disaster for a very large number of people, ordinary decent people, nurses and other ordinary people who were faced with a work contract that denied them any employment rights, told them they had to accept and that was the basis on which they got the job.”
He added that HMRC should “go back to the promoters, go back to the contractors who insisted on these terms and say, ‘you can pay at least your share, if not the whole bill’, but they’re not doing that. And I’m afraid in my view, they’ve made a massive ethical error in not doing so”.
An HMRC spokesperson said: “The loan charge seeks to recover tax that has been avoided by disguising income as loans. It is our responsibility to collect the tax that people owe.
“We take the wellbeing of all taxpayers very seriously and recognise that dealing with large tax liabilities can lead to pressure on individuals.
“The support we have in place to help people settle their previous tax avoidance includes offering payment by instalments: these arrangements are based on what the taxpayer can afford, and there’s no upper limit over how long we can spread payments.
“Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about options.
“Above all we want to prevent people getting into these types of situations and our message is clear – if a tax scheme sounds too good to be true, it probably is.”
UK
Ryland Headley: Man, 92, who raped and murdered Louisa Dunne in Bristol nearly 60 years ago, jailed for life
A 92-year-old man has been sentenced to life with a minimum term of 20 years in prison for the rape and murder of an elderly widow nearly 60 years ago.
Ryland Headley was found guilty on Monday of killing 75-year-old Louisa Dunne at her Bristol home in June 1967, in what is thought to be the UK’s longest cold case to reach trial, and has been told by the judge he “will die in prison”.
The mother-of-two’s body was found by neighbours after Headley, then a 34-year-old railway worker, forced his way inside the terraced house in the Easton area before attacking her.
Please use Chrome browser for a more accessible video player
The UK’s longest cold case to reach trial
Police found traces of semen and a palm print on one of the rear windows inside the house – but it was about 20 years before DNA testing.
The case remained unsolved for more than 50 years until Avon and Somerset detectives sent off items from the original investigation and found a DNA match to Headley.
He had moved to Suffolk after the murder and served a prison sentence for raping two elderly women in 1977.
Prosecutors said the convictions showed he had a “tendency” to break into people’s homes at night and, in some cases, “target an elderly woman living alone, to have sex with her despite her attempts to fend him off, and to threaten violence”.
Louisa Dunne in 1933. Pic: Avon and Somerset Constabulary
Headley during his arrest. Pic: Avon and Somerset Constabulary
Headley, from Ipswich, who did not give evidence, denied raping and murdering Ms Dunne, but was found guilty of both charges after a trial at Bristol Crown Court.
Detectives said forces across the country are investigating whether Headley could be linked to other unsolved crimes.
Mrs Dunne’s granddaughter, Mary Dainton, who was 20 when her relative was killed, told the court that her murder “had a big impact on my mother, my aunt and her family.
“I don’t think my mother ever recovered from it. The anxiety caused by her mother’s brutal rape and murder clouded the rest of her life.
“The fact the offender wasn’t caught caused my mother to become and remain very ill.
“When people found out about the murder, they withdrew from us. In my experience, there is a stigma attached to rape and murder.”
The front of Louisa Dunne’s home. Pic: Avon and Somerset Constabulary
Louisa Dunne’s skirt. Pic: Avon and Somerset Constabulary
Finding out her grandmother’s killer had been caught after almost six decades “turned my life upside down,” she said.
“I feel sad and very tired, which has affected the relationships I have with those close to me. I didn’t expect to deal with something of such emotional significance at this stage of my life.
“It saddens me deeply that all the people who knew and loved Louisa are not here to see that justice has been done.”
Palmprint images. Pic: Avon and Somerset Constabulary
After her statement, Mr Justice Sweeting told Mrs Dainton: “It is not easy to talk about matters like this in public.
“Thank you very much for doing it in such a clear and dignified way.”
The judge told Headley his crimes showed “a complete disregard for human life and dignity.
“Mrs Dunne was vulnerable, she was a small elderly woman living alone. You treated her as a means to an end.
“The violation of her home, her body and ultimately her life was a pitiless and cruel act by a depraved man.
“She must have experienced considerable pain and fear before her death,” he said.
Sentencing Headley to life imprisonment with a minimum term of 20 years, the judge told him: “You will never be released, you will die in prison.”
Detective Inspector Dave Marchant of Avon and Somerset Police said Headley was “finally facing justice for the horrific crimes he committed against Louisa in 1967.
“The impact of this crime has cast a long shadow over the city and in particular Louisa’s family, who have had to deal with the sadness and trauma ever since.”
The officer praised Ms Dainton’s “resilience and courage” during what he called a “unique” case and thanked investigators from his own force, as well as South West Forensics, detectives from Suffolk Constabulary, the National Crime Agency and the Crown Prosecution Service (CPS).
Read more on Sky News:
Lucy Letby hospital leaders arrested
UK heatwave latest updates
Tailgating deaths prompt new campaign
Charlotte Ream, of the CPS, described Headley’s crimes as “appalling”.
She said Louisa Dunne “died in a horrifying attack carried out in the place where she should have felt safest – her own home.
“Mrs Dunne’s death continues to have a traumatic impact on her family members: the passage of time has not lessened their pain.
“For 58 years, this appalling crime went unsolved and Ryland Headley, the man we now know is responsible, avoided justice.”
Jeremy Benson KC, defending Headley, offered no personal mitigation on behalf of the defendant.
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the latest version.
You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.
Three managers at the hospital where Lucy Letby worked have been arrested on suspicion of gross negligence manslaughter.
They were in senior roles at the Countess of Chester Hospital in 2015 and 2016 and have been bailed pending further enquiries, Cheshire Constabulary said. Their names have not been made public.
Letby, 35, was found guilty of murdering seven children and attempting to murder seven more between June 2015 and June 2016 while working in the hospital’s neonatal unit.
Detective Superintendent Paul Hughes explained that gross negligent manslaughter focuses on the “action or inaction of individuals”.
There is also an investigation into corporate manslaughter at the hospital, which began in October 2023.
That focuses on “senior leadership and their decision-making”, Mr Hughes said. The intention there is to determine whether any “criminality has taken place concerning the response to the increased levels of fatalities”.
The scope was widened to include gross negligence manslaughter in March of this year.
Lucy Letby was found guilty of murdering seven children and attempting to murder seven more
Mr Hughes said it is “important to note” that this latest development “does not impact on the convictions of Lucy Letby for multiple offences of murder and attempted murder”.
He added: “Both the corporate manslaughter and gross negligence manslaughter elements of the investigation are continuing and there are no set timescales for these.
“Our investigation into the deaths and non-fatal collapses of babies at the neo-natal units of both the Countess of Chester Hospital and the Liverpool Women’s Hospital between the period of 2012 to 2016 is also ongoing.”
Read more from Sky News:
Stab victim describes horrible reality of knife crime
Royal train to be scrapped with family to rely on helicopters
A public inquiry has also been examining the hospital’s response to concerns raised about Letby before her arrest.
In May, it was announced the inquiry’s final report into how the former nurse was able to commit her crimes will now be published early next year.
Earlier this year, lawyers for Lucy Letby called for the suspension of the inquiry, claiming there was “overwhelming and compelling evidence” that her convictions were unsafe.
In February, an international panel of neonatologists and paediatric specialists told reporters that poor medical care and natural causes were the reasons for the collapses and deaths.
Their evidence has been passed to the Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice, and Letby’s legal team hopes her case will be referred back to the Court of Appeal.
As we pulled back the hospital curtain, he was hunched over and clearly in pain.
He had climbed off the hospital bed to greet us with a polite smile, then hobbled back to lie down again.
Every breath was uncomfortable, but he wanted to share the horrible reality of knife crime.
The young knife attack victim in Manchester
“I’ve never in my life been stabbed so I don’t know how it’s meant to even feel,” he said.
“The pain came when I realised the blood’s just spitting out of the side of my rib cage and that’s when I started panicking.
“My lungs felt like they were filled with blood… I thought each breath that I take, I’m going to drown in my own blood.
“I just felt as though I was slowly slipping away.”
Paramedics helped save his life and got him to the hospital in Manchester.
Sky News cannot name the young victim or go into the details of the attack because the police are investigating his case.
We were alongside a support worker called Favour, who is part of a growing team called Navigators. They go into hospitals to help young victims of violence.
While checking on how his recovery is going, she gently asked what he wanted to do next.
“You should have the right to feel safe,” she said to him.
“So don’t blame yourself for what happened… we are going to be there to help you.”
Favour talks with the victim
‘Scarring and traumatic’
In a corridor outside the major trauma ward at the Manchester Royal Infirmary, Favour said: “They are often scared, often really tired from being in hospital.
“It does stay with you, not just for a couple of weeks, but it can go on for months, years, because it is something very scarring and traumatic.
“Having someone to talk to, being able to be very vulnerable with… that can lead you to find different spaces that are safe for you, can make a huge difference.”
In the adjacent Children’s Hospital in Manchester, we met the clinical lead at the Greater Manchester Violence Reduction Unit.
Support worker Favour is part of a team called Navigators
Dr Rachel Jenner is a senior consultant who expanded her emergency department work into the wider mission of violence reduction after treating one particular young stab victim.
“When he arrived at the hospital, he was obviously very distressed and stressed,” she said. “A little bit later on, when things were stable, I asked him if he wanted me to call his mum.
“When I asked that question, he just kind of physically crumpled on the bed and just looked like the vulnerable child that he was, and that was really impactful for me.”
Dr Rachel Jenner
‘Positive results’
The Violence Reduction Unit was established in 2019 with a commitment from the city’s authorities to work together better to prevent violence and deal with it efficiently when it occurs.
Dr Jenner still treats young knife crime victims, but revealed the number of stab-related admissions is falling in her hospital.
“The trend is downwards,” she confirmed. “We’ve definitely seen some positive results.”
The latest statistics in England and Wales show the number of hospital admissions for assault by a sharp object fell by 3% to 3,735 admissions in the year ending September 2024.
“We’re never complacent,” Dr Jenner said. “You reality check yourself all the time, because obviously if… someone gets stabbed, then it’s quite possible that I’ll be treating them.”
She said the Navigators are crucial to working with young patients.
“They have a really different way of engaging with young people, they’re much better at it than many other professionals,” she said.
“It’s not a one-size-fits-all model, they actually wrap around that support according to circumstances… that’s a really positive improvement.”
Tacking violence ‘like infectious disease’
Dr Jenner added: “We try and take a public health approach to violence reduction. In the same way that we would address an infectious disease, if we can use those methods and principles to look at violence.
“Not just reacting when it happens, but actually looking at how we can prevent the disease of violence, that in the long term will have a bigger impact.”
The key is teamwork, Dr Jenner said. Collaboration between the police, community leaders, victim support, health workers and people in education has noticeably improved.
Read more:
What are UK’s knife crime laws?
Plans for two types of ID to buy knives online
Students practise stopping a bleed
Children describe knife crime threat
The hospital also sends consultants into schools to teach pupils how to stop bleeds as part of an annual nationwide initiative that reaches 50,000 young people.
At a Stop The Bleed session in Bolton, Greater Manchester, we met 11 and 12-year-olds growing up with the threat of knife crime.
One Year 7 boy said: “There was a stabbing quite near where I live so it does happen, but it’s very crucial to learn how to stop this bleed and how to stop deaths.”
Another two friends talked about a boy their age who had been involved in an incident with a knife.
“No one would expect it for someone that young,” one said. “They’re just new to high school, fresh out of primary, and they shouldn’t just be doing that, too young.”
Sanaa Karajada
‘We are dealing with it every day’
Their school has decided to tackle the problem of knife crime head-on rather than pretend it isn’t affecting their pupils.
The pastoral lead at the school, Sanaa Karajada, told Sky News: “We are dealing with it every single day, so we have policies and procedures in place to prevent any escalations in our schools or in the community.
“It is very, very worrying and it’s upsetting that [students] are having to go through this, but you know we’ve got to be realistic… if we are shying away from it, we’re just saying it’s not a problem.
“But it is a problem within the community, it’s a problem in all of the UK.”
The government has pledged to halve knife crime within a decade.
These signs of progress may offer some hope, but there is still so much work to do.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike