Four more people have attempted to take their own life in relation to the loan charge scandal, which has left tens of thousands of contractors facing huge bills for tax their employers should have paid, Sky News has learnt.
HMRC has made 17 referrals to the police watchdog (Independent Office for Police Conduct) over the suicide attempts of 14 people, up from the 13 referrals of 10 people previously known about in October 2023.
The figures, revealed in response to a Freedom of Information request by Sky News, come on top of the 10 known suicides of people caught up in the controversial tax crackdown, which has alarmed MPs across the political spectrum.
The loan charge was announced in George Osborne’s 2016 budget and made freelancers liable for years of retrospective income and national insurance tax after being paid their salaries in loans.
Image: Former Tory chancellor George Osborne
HMRC has been accused of harassing ordinary people who were victims of mis-selling, as the arrangement was widely promoted by lawyers, accountants and tax professionals in the 2000s and 2010s.
Labour has launched an independent review into the policy but campaigners have branded it a “sham” and “cover-up” as it doesn’t look at the principle of the loan charge, only ways to make people settle.
‘Trapped in an endless nightmare’
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Father-of-three Ray Newton is one thousands of people who paid an umbrella company to manage his fees while working as an IT contractor for Barclays Bank from 2009-2010.
They paid him in tax-free loans on the assurance it was “completely above board”, but in 2016 he was hit with an unexpected HMRC bill of £16,000.
Image: Ray Newton has faced demands for almost £60,000 from HMRC
Ray paid it off, but last year he suddenly faced demands for another £15,000 in income tax and £14,000 in interest that had been accruing the whole time without his knowledge. The “bombshell bill” also included £12,000 of inheritance tax on the loans despite them being classed as wages.
“Instead of going for the tax that was avoided they are going for the jugular,” said Ray, 70.
The bill arrived in the post after eight years of sporadic letters from HMRC saying Ray still needed to settle but not explaining why or by how much, often ignoring him when he inquired. It nearly destroyed him.
Image: Ray attempted suicide over the stress of the loan charge
“I was literally begging – please tell me what it is I owe. It made me look as though I was a bad person… my wife actually left me and I got really in a state over this,” he said.
“I was having counselling, I was on antidepressant drugs, I was on sleeping pills. You know, my whole world was sort of falling apart. It was like being trapped in an endless nightmare.
“I did attempt suicide but I was stopped by a member of the public.”
Ray is now in a better place and is back with his wife, while HMRC has recently accepted the inheritance tax isn’t owed and giving him misleading or incorrect information.
But he is sceptical about the review.
“The government can’t afford or don’t want to afford the implications of a proper inquiry. This is going to be a whitewash.”
HMRC says it takes the wellbeing of all taxpayers seriously and is committed to identifying and supporting customers who need extra help with their tax affairs. It says it has made significant improvements to this service over the last few years.
Sky News spoke to several loan charge victims who said while they didn’t dispute owing tax, HMRC’s chaotic communication was making it harder to settle and move on.
“The impact has been devastating”
For father-of-two Stephen Bishop, the long drawn-out battle contributed to the breakdown of his marriage and led him to express suicidal thoughts.
He was told to join a loan scheme by the company which hired him and has since faced demands in unpaid tax ranging from £80,000 – more than he’d earn in a year – to £20,000 while a payment plan set up in 2018 was randomly cancelled.
It took many more years to reach a new settlement and after £18,000 was finally agreed upon, he was whacked with a £10,000 interest bill for the late payment.
Image: Stephen Bishop says the stress of HMRC’s conduct impacted his marriage
HMRC continued to contact him after he requested to go through his accountant due to his deteriorating mental health, with an inspector even showing up at his door.
“I can honestly understand why so many people have taken their own lives over this. The impact has been devastating on me,” he said.
What is being reviewed?
Since 2016, HMRC has agreed 25,000 settlements with employers and individuals over their use of loan schemes, which will raise around £4.2bn in revenue.
However, over 40,000 people and 5,000 employers are yet to settle.
Labour promised an “independent review” in opposition, with Treasury minister James Murray saying the loan charge had “become a nightmare for ordinary people… who are the victims of mis-selling and face financial ruin”.
Image: The loan charge has left many people facing financial ruin
After winning the election Mr Murray also attended a “harrowing meeting” where many loan charge victims “broke down in tears”, according to Greg Smith, Tory co-chairman of the Loan Charge and Taxpayer Fairness all-party parliamentary group (APPG), who suggested the “partial review” was down to “wilful ignorance or the bottom line” and warned it could lead to more suicides if people continue to face financial ruin.
Campaigners hoped the inquiry would look at the principle of retrospective tax legislation, the role of promoters who made profits from the schemes and HMRC’s conduct.
However, it will only examine the barriers facing those who have yet to settle and recommend ways for them to so do by the summer. And it is being run by former HMRC boss Ray McCann, leading some to question its independence.
‘Internal stitch-up’
Sir Iain Duncan Smith, former Tory leader and another long-term critic of the loan charge, called the review an “internal HMRC stitch-up… ran by an ex-HMRC honcho”.
He said the loan charge is a “disaster” made by the tax office for being slow to crack down on the loan schemes and the government should “draw a line under this and write the debt off”.
Image: Sir Iain Duncan Smith
“It seems to me any MP that goes to be a minister of the Treasury gets taken prisoner by them. This should be a full-scale review where apportioning blame is part of this,” Mr Duncan Smith added.
In a letter responding to concerns of the APPG, Mr Murray said it would have been “irresponsible for the government not to acknowledge the challenging fiscal circumstances that we inherited” and “that is the context in which this review takes place”.
He also defended Mr McCann’s independence, saying the former president of the Chartered Institute for Taxation is “a highly respected figure in the tax world whose name was suggested by one of the loan charge campaigners”.
The government declined to comment further while the review is ongoing.
Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK
Northamptonshire Police has admitted it failed Harry Dunn and his family after a report found officers prioritised the welfare of the suspect in the case over the investigation.
The 19-year-old died in 2019 after US state department employee Anne Sacoolas – who was driving a car on the wrong side of the road – hit his motorbike near RAF Croughton in Northamptonshire.
However, Sacoolas was not immediately arrested following the crash and was able to flee the country, claiming diplomatic immunity, because police did not believe a “necessity test” had been met.
An independent report, published on Wednesday, has now criticised the force’s senior leadership for their handling of the case – including describing its former chief constable as having a “detrimental” impact.
Harry Dunn’s mother Charlotte Charles said she welcomed the findings.
She told Sky News: “Unfortunately, we were treated extremely poorly. All the authorities wanted to shut us down…
“This report does validate everything, of the way we felt and everything that we’ve been put through. To be treated as we were, as the victims of a serious crime, we were let down really, really badly.”
Following a long fight for justice by Mr Dunn’s family, Sacoolas eventually pleaded guilty to causing death by careless driving via video link at the Old Bailey in December 2022.
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From 2022: Anne Sacoolas pleads guilty
Following the report, Assistant Chief Constable Emma James said in a statement: “On behalf of Northamptonshire Police, I want to apologise to Harry’s family for what is now clear was a failure on our part to do the very best for the victim in this case, Harry, and his family who fought tirelessly in the years that followed to achieve justice for him.
“The picture which emerges is one of a force which has failed the family on a number of fronts”.
She also added: “It was vitally important that Northamptonshire Police conducted this review into the most high-profile case in the force’s history, a case where clear and significant shortcomings have now been properly and independently unearthed.”
Image: Assistant Chief Constable Emma James
The report, which has 38 recommendations, found that Nick Adderley, who was sacked as head of the force last year after lying about his military record, had caused a breakdown in relations with Mr Dunn’s family.
It also revealed that his “erroneous statements” about Sacoolas’s immunity status led the Foreign Office to contact the force asking him not to repeat them.
Danielle Stone, the Police, Fire and Crime Commissioner for Northamptonshire, said Mr Adderley’s behaviour was “unfathomable”.
She added that the report “makes really clear his culpability.”
Image: Danielle Stone said Mr Adderley’s behaviour was “unfathomable”
The report also said Northamptonshire Police potentially had a culture of not arresting suspects “in circumstances such as these, which could lead to evidence not being obtained”. It recommended that the force adopt an “investigative mindset” over serious road crashes.
Regarding the decision not to arrest Sacoolas, the report said the decision had not been “explained in enough detail”. It added: “The overriding factor in the decision appears to be the welfare of the suspect and her suffering from shock, with little to no consideration around the full necessity test under the Police and Criminal Evidence Act.
“A prompt and effective investigation was not considered or articulated. The view is that in these circumstances the suspect could and should have been arrested to assist the evidence-gathering process.”
The report continued: “The duty (police sergeant) made the decision not to arrest.
“The rationale was largely based on a belief that the necessity test was not met, and information received that Anne Sacoolas was in shock.
“Whilst the welfare of any person is a concern for officers, this should not have prevented the arrest of Anne Sacoolas.”
Ms Charles, who was recently honoured with an MBE after her campaigning efforts led to road safety improvements near US airbases, said: “I don’t think you’re ever done grieving. There’s never any closure to losing a child. You live with it, it’s so profound.
“So the only thing I would ever say to anybody else who feels that they’ve got a fight ahead of them, dig deep, do your best, because you just never know the resilience that you’ve got until you absolutely have to find it.”
Plans for cuts to benefits which will impact more than three million households will be published today – as the government faces a battle to convince dozens of Labour MPs to back them.
Liz Kendall, the welfare secretary, has set out proposals to cut £5bn from the welfare budget – which she has said is “unsustainable” and “trapping people in welfare dependency”.
Disabled people claiming PIP, the personal independence payment which helps people – some of them working – with the increased costs of daily living, face having their awards reviewed from the end of next year.
An estimated 800,000 current and future PIP recipients will lose an average of £4,500 a year, according to a government assessment.
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Government’s battle over welfare reforms
The government also intends to freeze the health element of Universal Credit, claimed by more than two million people, at £97 a week during this parliament, and cut the rate to £50 for new claimants.
Under pressure from Labour MPs concerned particularly that changes to PIP will drive families into poverty, Ms Kendall will announce new protections in the bill today.
Sky News understands they include a 13-week transition period for those losing PIP; a higher rate of Universal Credit for people with the most serious conditions; and a commitment that disabled people who take a job will not immediately lose their benefits.
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Some 40 Labour MPs have signed a letter refusing to support the cuts; and dozens of others have concerns, including ministers.
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Benefits cuts explained
Ms Kendall is determined to press ahead, and has said the number of new PIP claimants has doubled since 2019 – at 34,000, up from 15,000.
Ministers say 90% of current claimants will not lose their benefits; and that many people will be better off – with the total welfare bill set to continue to rise over this parliament.
To keep the benefit, claimants must score a minimum of four points out of eight on one of the daily living criteria.
Ministers say claimants with the most serious conditions, who cannot work, will not face constant reassessments.
A £1bn programme is proposed, intended to give disabled people who can work tailored support to find jobs.
Some Labour MPs have angrily opposed the reforms – which will be voted on later this month.
Last night in a parliamentary debate, Labour MP for Poole Neil Duncan-Jordan disputed the Department for Work and Pensions (DWP) figures.
He said: “We already know that PIP is an underclaimed benefit. The increase in claims is a symptom of declining public health and increased financial hardship disabled people are facing.
“We have the same proportion of people on working-age benefits as in 2015. This is not an economic necessity, it’s a political choice.”
Image: Liz Kendall
Rachael Maskell, Labour MP for York, called the proposals “devastating “. She said: “We must change direction and not proceed with these cuts.”
Disability groups say they fear an increase in suicides and mental health conditions.
The government’s own assessment forecast an extra 250,000 people could be pushed into poverty – including 50,000 children. It did not include the impact of people moving into work.
Ms Kendall was urged by MPs on the Commons Work and Pensions committee to delay the reforms, to carry out an impact assessment, but wrote back to the committee saying the reforms were too urgent to delay – and that MPs would be able to amend the legislation.
The grieving mother of a Scottish teen who vanished for a month has told Sky News she believes a “third party” was involved in her son’s death.
Cole Cooper, 19, was discovered dead in woods near Falkirk earlier this month following a missing persons inquiry his relatives don’t believe was taken seriously enough by police.
He was last seen on CCTV in May after leaving a house party, but police later revealed a former school friend had spoken to Cole a few days later nearby.
Speaking exclusively to Sky News, his mum Wendy Stewart, 42, has revealed her son had “various arguments” in the days and hours before he disappeared.
Image: Cole’s mum Wendy (L) and his aunt Aimee
In an emotional interview, she said: “He was only 19, he should never have been taken. I am never going to see him again. I never got a chance to give him a last cuddle and hold his hand.
“Someone has taken that away from me far too soon. Whether it be intentionally or unintentionally, I do believe there has been some involvement by a third party and the result is the death of Cole.”
The family, who organised a local vigil in Cole’s memory last weekend, have vowed to get “justice”.
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Asked what that means, Ms Stewart told Sky News: “Finding the culprit and getting justice that way. Finding the person that is responsible for the death of my child.”
Police previously said 400 residents were spoken to during door-to-door enquires and more than 2,000 hours of CCTV footage was collected.
Image: Cole Cooper’s mother Wendy at a vigil in Banknock. Pic: PA
Cole’s aunt Aimee Tennie, 32, revealed the family’s anger over the police handling of the case as they attempt to find out what happened.
She said: “We are aware of small details surrounding the weekend leading up to it with arguments. He had a few arguments over that weekend. We want the details re-examined thoroughly.”
Sky News put all of the family’s concerns and allegations to Police Scotland.
The force swerved our questions and responded saying: “Enquiries remain ongoing.”
Wendy Stewart claimed the probe has been handled “shockingly” with a failure to take her son’s disappearance seriously.
The 42-year-old said: “I have had to scream and shout from rooftops to be heard by the police. I don’t think they have handled it well.
“The police really need to take accountability and listen to families, they are reporting a missing child and understand the family knows their child best.”
Cole Cooper’s loved ones still have not been told when his body will be released to allow them to lay him to rest.