Loan charge: HMRC accused of ‘dangerous and sinister’ new tactics in tax crackdown linked to 10 suicides

Published

1 year ago

February 20, 2024

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HMRC has been accused of using “dangerous and sinister” new tactics in a tax crackdown that has already been linked to 10 suicides.

The government has recently come under pressure over the “Loan Charge” – controversial legislation which made tens of thousands of contractors who were paid their salaries through loans retrospectively liable for tax their employer should have paid.

The clampdown has been branded on par with the Post Office Horizon scandal as the unaffordable bills have been linked to suicides and bankruptcies, while one woman had an abortion due to the financial strain she was under, a debate in parliament heard last month.

HMRC has been criticised for going after individuals – including teachers, nurses and cleaners – rather than the firms that profited from promoting the schemes as tax compliant.

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However ministers have resisted pressure to overturn the policy, saying a review conducted by Lord Morse in 2019 resulted in a series of reforms to reduce the financial pressures of the some 50,000 people affected.

Crucially this included cutting the policy’s 20-year retrospective period so only loans received after December 2010 were in scope.

However it has emerged that HMRC have been pursuing people involved in loan schemes prior to 2010 through a different mechanism – a s684 notice.

This effectively gives HMRC the discretion to transfer a tax burden from an employer to an employee for the tax years excluded from the Loan Charge.

Conservative MP Greg Smith, co-chair of the Loan Charge APPG, said it “flies in the face” of what Lord Morse intended and risks more people taking their own lives because of the unaffordable bills.

‘I could lose my home’

Sky News spoke to people who said they had experienced suicidal thoughts and feared becoming homeless after unexpectedly receiving the notices.

While the s684s don’t state how much tax is owed, one father-of-three said his bill could be as high as £250,000 as this is how much HMRC have previously tried to claw back from his time in a loan scheme pre-2010.

The IT consultant, who asked to remain anonymous, said he attempted to settle his tax affairs years ago but communication with the tax office “fizzled out” and following the Morse review he believed the “nightmare” was behind him.

Then in November he received a brown envelope containing an s684 and now he is worried HMRC is “going to absolutely hammer me” just as he is approaching retirement age.

“I have three children and in the worst case scenario I will lose my home.

“I can’t think of another government policy that has caused so much suffering. I fear this could really push some people over the edge.”

‘Dreadful landscape’

It is not clear how many people have been sent the notices.

The government previously estimated that 11,000 people would be removed from the Loan Charge by introducing the 2010 cut off.

While the Loan Charge is seen as particularly punitive because it adds together all outstanding loans and taxes them in a single year, often at the 45% rate, the notices mean HMRC can use its own discretion to turn off an employer’s PAYE obligations and seek the income tax that would have been due that year from the employee instead.

Rhys Thomas, director of the WTT tax firm, told Sky News: “There is considerable and understandable confusion amongst taxpayers that when the Morse review removed the loan charge for payments pre 9th December 2010, it was assumed that HMRC had no further recourse for those years.

“Where enquiries were outstanding for the earlier tax years, HMRC will seek to conclude these by utilising tools such as s684 notices.”

He called the situation a “dreadful landscape” as those in receipt of the notices only have 30 days to respond to HMRC over something “that has taken them 15 years to investigate”.

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There is no right to appeal the notices, so the only way to challenge HMRC is through a costly Judicial Review.

“It’s causing a huge amount of distress and anxiety; it’s hugely concerning and for lots of people it’s come as a surprise,” Mr Thomas said.

WTT is representing around 200 people who are challenging the notices, saying HMRC has not done enough to go after the core parties who should have collected the tax at the time.

A spokesperson for HMRC said the Morse Review “recommend we use our normal powers to investigate and settle cases taken out of the Loan Charge”.

They said they had been issuing the notices since May 2022, having won a case at the Court of Appeal over their use in relation to loan schemes, “so it’s not a sudden change”.

But campaigners disputed the use of the notices as “normal” and said it is another example of HMRC “abusing its power” to go after individuals rather than the companies that ran and promoted the loan schemes.

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‘We were mis-sold’

These became prolific in the 2000s and saw self-employed contractors encouraged to join umbrella companies that paid them their salaries through loans which were not typically paid back.

HMRC has argued those who signed up to the schemes are tax evaders who need to pay their fair share. But those affected claim they are victims of mis-selling as the arrangements were widely marketed as legitimate by the scheme promoters and tax advisers, and in some cases they had no choice but to be paid this way.

IT consultant Daniel (not his real name), from Stoke, said he did not stand to make any money from the scheme he joined in 2008 and was simply trying to avoid falling foul of complex off-payroll rules known as IR35.

His tax adviser said the scheme was HMRC compliant and the company said they “would sort out my taxes”, he added.

He said he “did not hear a peep” from HMRC during his time in the scheme and his payslip looked normal as around 20% was being deducted from his salary each month – money experts say will have gone into the profits of those running the company rather than tax to the exchequer.

Now, he is expecting a £30,000 bill after receiving an s684 in November – cash the father-of-four “does not have”.

“If I felt like I had done something wrong I would accept it but I did not make one penny from this scheme, it was all to do with compliance and to make my life as simple as possible.

“This is causing so much stress and frustration. I have had plenty of sleepless nights.

“It feels like the Post Office scandal where we are the little people being backed into a corner and there’s nothing we can do and those who are really guilty are just laughing.”

HMRC ‘abusing its powers’

The notices have renewed calls for the government to find a new solution to the Loan Charge scandal.

Keith Gordon, a tax barrister, said HMRC “is effectively responsible for this mess because they failed to warn employees that they did not like these schemes”.

“Most people, if they got a whiff of HMRC dislike, would have left these schemes but they were sold it as being tax compliant. Why should the blame be on people who were at the very worst merely naïve?”

Campaigners fear the s684s will be used across the board instead of the Loan Charge, which Labour has said it will review if it wins the next election.

Steve Packham, of the Loan Charge Action Group, accused HMRC of being “downright reckless” in light of the 10 confirmed suicides, adding: “This is sinister and dangerous and is another example of how out-of-control HMRC is.

“The government must immediately order a stop to these notices and instead agree to find a resolution to the Loan Charge Scandal before there are more lives ruined.”

A HMRC spokesperson said: “We appreciate there’s a human story behind every tax bill and we take the wellbeing of all taxpayers seriously.

“We recognise dealing with large tax liabilities can lead to pressure on individuals and we are committed to supporting customers who need extra help with their tax liabilities. We have made significant improvements to this service over the last few years.

“Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about your options.”

Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK.

Politics

US-UK trade deal ‘done’, says Trump as he meets Starmer at G7

Published

2 hours ago

June 17, 2025

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US-UK trade deal 'done', says Trump as he meets Starmer at G7

The UK-US trade deal has been signed and is “done”, US President Donald Trump has said as he met Sir Keir Starmer at the G7 summit.

The US president told reporters: “We signed it, and it’s done. It’s a fair deal for both. It’ll produce a lot of jobs, a lot of income.”

As Mr Trump and his British counterpart exited a mountain lodge in the Canadian Rockies where the summit is being held, the US president held up a physical copy of the trade agreement to show reporters.

Several leaves of paper fell from the binding, and Mr Starmer quickly bent down to pick them up, saying: “A very important document.”

Sir Keir said the document “implements” the deal to cut tariffs on cars and aerospace, adding: “So this is a very good day for both of our countries – a real sign of strength.”

Mr Trump added that the UK was “very well protected” against any future tariffs, saying: “You know why? Because I like them”.

However, he did not say whether levies on British steel exports to the US would be set to 0%, saying “we’re gonna let you have that information in a little while”.

What exactly does trade deal being ‘done’ mean?

The government says the US “has committed” to removing tariffs (taxes on imported goods) on UK aerospace goods, such as engines and aircraft parts, which currently stand at 10%.

That is “expected to come into force by the end of the month”.

Tariffs on car imports will drop from 27.5% to 10%, the government says, which “saves car manufacturers hundreds of millions a year, and protects tens of thousands of jobs”.

The White House says there will be a quota of 100,000 cars eligible for import at that level each year.

But on steel, the story is a little more complicated.

The UK is the only country exempted from the global 50% tariff rate on steel – which means the UK rate remains at the original level of 25%.

That tariff was expected to be lifted entirely, but the government now says it will “continue to go further and make progress towards 0% tariffs on core steel products as agreed”.

The White House says the US will “promptly construct a quota at most-favoured-nation rates for steel and aluminium articles”.

Other key parts of the deal include import and export quotas for beef – and the government is keen to emphasise that “any US imports will need to meet UK food safety standards”.

There is no change to tariffs on pharmaceuticals for the moment, and the government says “work will continue to protect industry from any further tariffs imposed”.

The White House says they “committed to negotiate significantly preferential treatment outcomes”.

Mr Trump also praised Sir Keir as a “great” prime minister, adding: “We’ve been talking about this deal for six years, and he’s done what they haven’t been able to do.”

He added: “We’re very longtime partners and allies and friends and we’ve become friends in a short period of time.

“He’s slightly more liberal than me to put it mildly… but we get along.”

Sir Keir added that “we make it work”.

The US president appeared to mistakenly refer to a “trade agreement with the European Union” at one point as he stood alongside the British prime minister.

Mr Trump announced his “Liberation Day” tariffs on countries in April. At the time, he announced 10% “reciprocal” rates on all UK exports – as well as separately announced 25% levies on cars and steel.

In a joint televised phone call in May, Sir Keir and Mr Trump announced the UK and US had agreed on a trade deal – but added the details were being finalised.

Ahead of the G7 summit, the prime minister said he would meet Mr Trump for “one-on-one” talks, and added the agreement “really matters for the vital sectors that are safeguarded under our deal, and we’ve got to implement that”.

Politics

Abortion debate reignited as Sky poll reveals public’s view on decriminalisation ahead of Commons vote

Published

2 hours ago

June 17, 2025

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Abortion debate reignited as Sky poll reveals public's view on decriminalisation ahead of Commons vote

A small group have gathered in the main square in the centre of Birmingham, and it’s a real mix of people. There are older figures from the community, young students, as well as groups of friends and some families.

On closer inspection, you can make out candles and rosary beads, signalling it’s some kind of vigil. As hymns start to be sung, it’s revealed to be a gathering to protest against abortion.

Nearly 90% of this country is pro-choice, but a small, vocal minority is becoming more organised in the UK.

Energised by the Trump administration, young and old activists in the UK anti-abortion movement have become more motivated to get their message across.

And all this is happening just as abortion laws in the UK could be about to go through the most significant change in over 50 years.

Nearly three years on from the ruling reversing Roe v Wade – a landmark case that once made abortion legal in the US – the age-old abortion debate has become even more political in the UK.

A breakthrough moment came when Vice President JD Vance criticised the UK laws on abortion buffer zones – areas outside clinics where police are allowed to use their discretion to stop anyone harassing women entering abortion clinics.

Explained: What are the UK’s abortion laws?

One of the cases cited by the vice president was that of Isabel Vaughan-Spruce.

She’s a lifelong anti-abortion activist who has been handing out leaflets outside clinics for 20 years. Since buffer zones came into force, she now visits to silently pray once a week. In 2022, she was arrested outside an abortion clinic for silent prayer and taken to court, although the charges were later dropped.

She also received £13,000 in a civil claim against West Midlands Police, which did not admit liability.

“They actually asked me what I was doing, and I said, well, I’m just physically standing here. I might be praying in my head, but nothing out loud. And on that basis, they made an arrest. I was heavily searched, I was taken to the police station, locked in a police cell for hours before being questioned under caution. And then, eventually, I went to court.

“I believe that abortion centres are like the modern-day Calvary. This is where the innocent are being put to death. I might not be physically interacting with anybody or stopping anyone or talking to anyone, just to be there in prayer is really, really important from a spiritual perspective.”

For people like Ailish McEntee, any type of protest is a distraction, which she says is not wanted by the women who come to the clinic she works at in London. She’s hoping that this week MPs will go further on abortion laws and pass an amendment through the Commons to decriminalise abortion for anyone seeking an abortion up to 24 weeks.

“The law itself works very well for the majority of people, but for those individuals in those kind of really high-risk domestic abuse situations… they maybe can’t make it to a clinic, they might seek abortion care from those kind of unregulated providers.

“So this amendment would take away that decriminalisation of women themselves. And it’s a really strange part of the law that we have.

“I think particularly in recent years, with Roe v Wade overturning and Donald Trump winning the election again, I think it’s really pushed forward the anti-choice rhetoric that has always been there, but it’s absolutely ramping up.”

According to polling by Sky News and YouGov, 55% of people are in favour of the law changing to stop women being criminalised for their own abortion before 24 weeks.

Surprisingly though, 22% said they believe women should be investigated or imprisoned for abortion after 24 weeks.

Stella Creasy is one of the MPs laying down an amendment to try to decriminalise abortion.

“There’s no other health care provision that we see with a criminal foundation in this way and it has a very real practical consequence.

“We’ve seen some incredibly vulnerable women and girls who didn’t even know that they were pregnant who have late-term miscarriages finding themselves with police officers rather than counsellors at their hospital beds finding themselves under suspicion for months, if not years, and I just don’t think that’s where the British public are at.”

But Rachel is concerned by this amendment. She runs sessions at the UK arm of Rachel’s Vineyard – a faith-based organisation originally founded in the United States, dedicated to, in their words, “healing the trauma of abortion”. They frame abortion not as a medical procedure, but as a harm to mothers and fathers.

“With all sudden deaths, whether you are 80 years of age or you’re 26 weeks born, you know, out of the womb, and you’ve died, you’ve sadly died, we need to be able to investigate that. For us to have compassion, we need to have justice.”

In Northern Ireland, where the decriminalisation battle was won in 2019, I met Emma, who fought on the campaign at Alliance for Choice.

She says police searches were a daily routine for her, and since 2019, she has been able to continue helping women navigate abortion care without the threat of being investigated.

Orfhlaith Campbell should have been one of the lucky ones. She was able to seek a medical abortion at 23 weeks in Northern Ireland, two years after it had been decriminalised, but she says she had to fight to get the care she needed.

She was on the cusp of the medical time limit when she suffered a premature rupture of membranes, went into labour and was told she would likely develop sepsis.

“I would have died and my daughter was dying, I could feel her dying, and it was a compassionate choice. When we got the post-mortem after, the infection had went into her wee body too, and she had nuclear debris in her lungs. If she had survived at all, it would have been a very, very painful existence.

“So yes, I had to break through the stigma that had been ingrained in me in Northern Ireland. I had to break through legal fights and the barriers that were being put in place. But I was strong enough to know that that was compassionate and that healthcare was needed both for me and her.”

The UK is majority pro-choice, and our polling shows the majority are for decriminalising abortion.

But activists who are against abortion are energised by the changing landscape of the debate in the US.

As parliament sets to vote on two amendments on abortion laws this week and potentially pulls in one direction, activists will likely only get louder and become more effective at getting their message across.