‘You feel like you can’t fight back’: How thousands are being targeted by a 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.
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.
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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.
HMRC ‘aren’t out of pocket’
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 then 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.
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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
Ten organisations write urgent letter to home secretary over violence against women and girls strategy
Ten child protection organisations have written an urgent letter to the home secretary expressing concern about the omission of child sexual abuse from the government’s violence against women and girls strategy, following a Sky News report.
Groups including the NSPCC, Barnardo’s and The Internet Watch Foundation wrote to Yvette Cooper to say that violence against women and girls (VAWG) and child sexual abuse are “inherently and deeply connected”, suggesting any “serious strategy” to address VAWG needs to focus on child sexual abuse and exploitation.
The letter comes after Sky News revealed an internal Home Office document, titled Our draft definition of VAWG, which said that child sexual abuse and exploitation is not “explicitly within the scope” of their strategy, due to be published in September.
Poppy Eyre when she was four years old
Responding to Sky News’ original report, Poppy Eyre, who was sexually abused and raped by her grandfather when she was four, said: “VAWG is – violence against women and girls. If you take child sexual abuse out of it, where are the girls?”
The Centre of Expertise on Child Sexual Abuse, which is funded by the Home Office and a signatory to the letter, estimates 500,000 children in England and Wales are sexually abused every year.
The NSPCC “welcome” the government’s pledge to halve VAWG in a decade, but is “worried that if they are going to fulfil this commitment, the strategy absolutely has to include clear deliverable objectives to combat child sexual abuse and exploitation too”, the head of policy, Anna Edmundson, told Sky News.
Poppy is a survivor of child sexual abuse
She warned the government “will miss a golden opportunity” and the needs of thousands of girls will be “overlooked” if child sexual abuse and exploitation is not “at the heart of its flagship strategy”.
The government insists the VAWG programme will include action to tackle child sexual abuse, but says it also wants to create a distinctive plan to “ensure those crimes get the specialist response they demand”.
“My message to the government is that if you’re going to make child sexual abuse a separate thing, we need it now,” Poppy told Sky News.
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Rape Crisis, which is one of the largest organisations providing support to women in England and Wales, shares these concerns.
It wants plans to tackle child sexual abuse to be part of the strategy, and not to sit outside it.
The internal Home Office document detailing its violence against women and girls strategy
“If a violence against women and girls strategy doesn’t include sexual violence towards girls, then it runs the risk of being a strategy for addressing some violence towards some females, but not all,” chief executive Ciara Bergman said.
A Home Office spokesperson said the government is “working tirelessly to tackle the appalling crimes of violence against women and girls and child sexual exploitation and abuse, as part of our Safer Streets mission”.
“We are already investing in new programmes and introducing landmark laws to overhaul the policing and criminal justice response to these crimes, as well as acting on the recommendations of Baroness Casey’s review into group-based Child Sexual Exploitation, and the Independent Inquiry into Child Sexual Abuse,” they added.
Hundreds of shoplifting cases have gone unsolved every day, with the number of unsolved incidents rising by more than 40,000 over the past year.
New figures show that 289,464 cases of shoplifting were shut by police without a suspect in England and Wales in the year to March 2025, according to House of Commons library analysis.
Of all shoplifting cases, more than half (55%) were closed without a suspect identified, while fewer than one in five (18%) led to someone being charged.
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The data shows the number of cases closed without a suspect has also risen significantly on the previous 12 months, with 245,337 cases shut by police forces without a suspect being identified in 2023-24, a rise of more than 40,000.
The analysis, produced for the Liberal Democrats, suggests that on average, 793 shoplifting offences went unsolved every day.
Senior Conservative politicians have told Sky News that the figures “explain why Britain feels lawless”, and are urging ministers to scrap plans to largely end the use of short prison sentences, in favour of people serving time in the community.
What else does the data show?
The data covered all police forces in England and Wales, except for Humberside, but also included the British Transport Police.
It revealed the Metropolitan Police had the worst record, with 76.9% of its 93,705 shoplifting cases being closed with nobody identified as a suspect. Just 5.9% of shoplifting incidents recorded in the capital and the wider region resulted in a charge.
While the data has shown the number of unsolved cases is on the rise, it also revealed that the total number of shoplifting offences has increased dramatically, too.
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Do we send too many people to prison?
In 2023-24, 444,022 cases of shoplifting were recorded. But in 2024-25, this rose to 530,643, a record high since the practice of recording the data nationally began in 2002-03.
Overall, 2,071,156 offences of all types went unsolved in the 2024-25 year. This means, on average each day, 5,674 crimes were committed that went on to be closed without a suspect. Only 7.3% of all crimes recorded resulted in somebody being charged or summoned.
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Greggs shoplifter caught
The Lib Dems have repeated their calls for police and crime commissioners – elected politicians who have authority over each police force – to be scrapped. They believe the money spent on these would be better invested in frontline policing, and that police boards, made up of local councillors and other individuals, could replace them.
Lisa Smart, the party’s home affairs spokesperson, said that the data reveals an “absolute scandal” because it shows that “thousands of innocent victims are being left without the justice they deserve” every day.
She added: “The previous Conservative government left behind a legacy of failure, but the Labour government has not been quick enough to address the unsolved crime epidemic – particularly as shoplifting spirals out of control.”
Home affairs spokesperson Lisa Smart, with party leader, Sir Ed Davey. Pic: PA
Tories: There should be a ‘zero tolerance approach’ to shoplifting
Meanwhile, the shadow home secretary pointed out that shoplifting has risen by 20% under Labour, and that ministers show “no signs of gripping it”.
Chris Philp told Sky News: “The vast majority of criminals aren’t even caught – and Labour are now proposing to abolish prison sentences of under a year, so even the few that get caught won’t suffer any real punishment.”
He has called for a “zero tolerance approach” and the greater use of technology, such as facial recognition technology, so that “Labour’s shoplifting epidemic can be stopped”.
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Earlier this month, Home Secretary Yvette Cooper announced a significant expansion of the use of facial recognition tech by police forces in England and Wales, with 10 new vans being rolled out – though the move was criticised by civil liberties groups.
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Jenrick slams justice system shake-up
Robert Jenrick, the shadow justice secretary, said the “damning stats explain why Britain feels lawless”.
He told Sky News: “Starmer’s plan to scrap prison sentences for shoplifters will only make this worse. We need the authorities to go after these criminals and lock them up for much longer to keep the public safe.”
The government has defended the proposals to largely end the use of shorter sentences, as recommended by the independent sentencing review, carried out earlier this year by former Conservative justice secretary David Gauke.
A Ministry of Justice spokesperson said: “Without further action, we will run out of prison places in months, courts would halt trials and the police [would] cancel arrests. That is why we are overhauling sentencing to make sure we always have the prison places needed to keep the country safe.”
Bank holiday temperatures are set to soar close to 30C, offering a final burst of summer sunshine before wind and rain arrive.
Maximum temperatures will reach around 28C (82F) or 29C (84F) today, with widespread sunshine expected for most areas, the Met Office said.
“There’s around a 30% chance of temperatures reaching 30C somewhere over southern Britain… with the area around Chester likely to be the hottest place,” said Sky News meteorologist Dr Christopher England.
“Given the location, it’s looking likely that the Welsh August Bank Holiday record high of 26.5C, set at Crossway in 1991, will be exceeded, and by a considerable amount.”
The Northern Ireland record high of 23.8C, set in Banagher in 1983, may also be broken, he said.
The bank holiday weekend has enjoyed high temperatures. Pic: Reuters
But later today, the remnants of Hurricane Erin will approach from the west, bringing periods of wind and rain to the UK-conditions that are expected to persist through the week, Met Office meteorologist Craig Snell said.
For the remainder of the week, temperatures will return to seasonal norms – hovering in the low 20s across the south and the high teens in the north.
Temperatures are expected to hit a peak today . Pic: Reuters
Mr Snell said: “On Monday, it will be a very warm and sunny picture for most.
“It will start to go downhill and rain will start to move in for Northern Ireland into the afternoon.”
Wind and rain will make a swift return next week. Pic: Reuters
Those planning to visit the coast on Monday or Tuesday are advised to choose beaches with lifeguards, as large waves are expected to arrive during this period.
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Beginning Tuesday, periods of rain will spread across all regions of the country, with the heaviest downpours expected in western areas, according to Mr Snell.
“It will be heavy at times in the west, but at the moment we’re not expecting too many impacts, and it may for farmers or anyone who needs the rain be welcome,” he said.
On Wednesday, a band of rain will sweep across the entire country, and low pressure is expected to persist through the weekend, bringing further periods of rainfall.
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