‘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.”
MP Mike Amesbury has pleaded guilty to assault by beating for punching a man in Cheshire.
The Runcorn and Helsby MP appeared at Chester Magistrates’ Court on Thursday morning where he admitted attacking 45-year-old Paul Fellows in Main Street, Frodsham, Cheshire, in October.
Speaking outside the court, he said the incident was “highly regrettable” and he was “sincerely sorry” to Mr Fellows and his family.
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CCTV footage showed Amesbury, who has been an MP since 2017, punching Mr Fellows on the ground.
Other previously released videos from another angle show Amesbury punching Mr Fellows repeatedly after knocking him to the floor as members of the public intervened.
It was reported to police at 2.48pm on Saturday 26 October.
The court heard how Amesbury told Mr Fellows “you won’t threaten your MP again” after punching him in the head with enough force to knock him to the ground.
The 55-year-old politician is currently an independent MP after he was suspended by Labour at the end of October when the CCTV footage emerged.
He will continue to be suspended so remains as an independent.
Pic: Richard Townshend/UK Parliament/PA
The court heard Mr Fellows recognised Amesbury in the taxi rank in Frodsham town centre at about 2am on 26 October last year.
Both were alone and had been drinking.
Alison Storey, prosecuting, said Mr Fellows approached the MP to remonstrate about a bridge closure in the town and CCTV then shows they spoke for several minutes but there was no aggression or raised voices.
Mr Fellows then started to walk away but Amesbury re-engaged and was heard saying “what” a few times before shouting it.
The victim then put his hands in his pockets and turned towards the taxi queue and when he turned back Amesbury punched him in the head, knocking him to the ground.
He then punched Mr Fellows again, at least five times, Ms Storey said.
She told the court he was then heard saying “you won’t threaten your MP again will you”.
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Amesbury was voluntarily interviewed under caution by Cheshire Police in October and was charged with common assault on 7 November.
At the time, Amesbury said what happened was “deeply regrettable” and he was co-operating with police.
A Labour Party spokesman said: “It is right that Mike Amesbury has taken responsibility for his unacceptable actions.
“He was rightly suspended by the Labour Party following the announcement of the police investigation.
“We cannot comment further whilst legal proceedings are still ongoing.”
Amesbury is set to be sentenced next month. If he is sent to prison or given a suspended sentence he could lose his seat.
A sentence of less than a year, even if it is suspended, would leave him liable to the recall process, which would trigger a by-election if 10% of registered voters in his seat sign a petition calling for it.
A jail term of more than a year would mean he automatically loses his seat.
UK
‘I have nightmares of dead bodies’: Patients dying and undiscovered for hours in hospital corridors
Patients are dying in corridors and going undiscovered for hours while the sick are left to soil themselves, nurses have said, revealing the scale of the corridor crisis inside the UK’s hospitals.
In a “harrowing” report built from the experiences of more than 5,000 NHS nursing staff, the Royal College of Nursing (RCN) found almost seven in 10 (66.81%) say they are delivering care in overcrowded or unsuitable places, including converted cupboards, corridors and even car parks, on a daily basis.
Demoralised staff are looking after as many as 40 patients in a single corridor, unable to access oxygen, cardiac monitors, suction and other lifesaving equipment.
Women are miscarrying in corridors, while some nurses report being unable to carry out adequate CPR on patients having heart attacks.
Sara (not her real name) said she was on shift when a doctor told her there was a dying patient who had been waiting in the hospital’s corridor for six hours.
“It took a further two hours to get her into an adequate care space to make her clean and comfortable,” she told Sky News.
“That’s a human being, someone in the last hours of their life in the middle of a corridor with a detoxing patient vomiting and being abusive behind them and a very poorly patient in front of them, who was confused, screaming in pain. It was awful on the family, and it was awful on the patient.”
Dead patients ‘not found for hours’
A nurse working in the southeast of England quit her job after witnessing an elderly lady in “animal-like conditions”.
She told the RCN: “A 90-year-old lady with dementia was scared, crying and urinating in the bed after asking several times for help to the toilet. Seeing that lady, frightened and subjected to animal-like conditions is what broke me.
“At the end of that shift, I handed in my notice with no job to go to. I will not work where this is a normal day-to-day occurrence.”
Another nurse in the South East said a patient died in a corridor and “wasn’t discovered for hours”.
Sara told Sky another woman needed resuscitating after the oxygen underneath her trolley ran out. Sara was one of just two nurses caring for more than 30 patients on that corridor.
“I have had nightmares – I have a nightmare that I walk out in the corridor and there are dead bodies in body bags on the trolleys,” she said, growing visibly emotional.
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No electricity to plug in computers
One nurse, who spoke to Sky News, said the conditions were “undignified” and “inhumane”.
“It’s not just corridors – we utilise chairs, cupboards, whatever space is available in the hospital to be repurposed into a care space, in the loosest sense of that term. These spaces are unsafe.”
Some spaces, she said, don’t even have basic electricity for nurses to plug in their computers.
The nurse, who spoke to Sky on the condition of anonymity, said she has experienced burnout multiple times over the state of her workplace.
“I have come to the conclusion this week I don’t think I can continue working in the NHS or as a nurse,” she said.
“It breaks my soul; I love what I do when I am able to do it in the right way. I like caring for people, I like making people better, I also like providing a dignified death.”
She added: “I want to look after the institution I was born into, but for the sake of my family and my mental health, I don’t know how much more I can give.”
With 32,000 nursing vacancies in England alone, data also shows around one in eight nurses leave the profession within five years of qualifying.
Nurses are being forced to provide care in hospital corridors and car parks. Pic: PA
Staff ‘not proud of the care they are giving’
The Royal College of Nursing (RCN) says the testimony, which runs to over 400 pages, must mark a “moment in time”. In May 2024, the RCN declared a “national emergency” over corridor care in NHS services.
Professor Nicola Ranger, RCN general secretary and chief executive, said: “At the moment, [nursing staff] are not proud of the care they are giving.”
“We hear stories of escalation areas and temporary beds that have been open for two years,” she added. “That is no longer escalation, it’s understaffed and underfunded capacity that is pretty shocking care for patients. We have to get a grip on that.”
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She called the situation “a disgrace”, citing abuse of staff as another reason for people leaving the profession in droves.
Last week, a nurse was left with “life-changing injuries” after being stabbed by a man while at work.
“The NHS used to be the envy of the world and we need to take a long hard look at ourselves and say ‘what needs to change?’
“The biggest concern for us is that the public Is starting to lose a little faith in their care, and that has to stop. We absolutely have to sort this out.”
Commenting on the RCN’s report, Duncan Burton, chief nursing officer for England, said the NHS had experienced one of the “toughest winters” in recent months, and the report “should never be considered the standard to which the NHS aspires”.
“Despite the challenges the NHS faces, we are seeing extraordinary efforts from staff who are doing everything they can to provide safe, compassionate care every day,” he added. “As a nurse, I know how distressing it can be when you are unable to provide the very best standards of care for patients.”
Have you experienced corridor care in an NHS hospital? Get in touch on NHSstories@sky.uk
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