HM Revenue & Customs  

HMRC accused of 'wreaking havoc' on taxpayers

HMRC accused of 'wreaking havoc' on taxpayers

MPs have warned the attitude of HM Revenue and Customs towards its controversial loan charge was "wreaking havoc" on taxpayers, amid claims of homelessness, deaths, and other hardships allegedly caused by its demands. 

The Loan Charge All-Party Parliamentary Group published its latest survey report yesterday (November 5) in which more than 2,000 people believed to be facing the loan charge detailed how it, and the taxman's pursuit of its payment, had impacted their lives. 

According to the survey, carried out between October 23 and October 28, one in six respondents are yet to receive settlement figures from HMRC detailing how much is owed, and a third have still not been formally notified of the charge by the taxman. 

When approached by FTAdviser HMRC maintained more than 99 per cent of "customers" who had provided the relevant information by the April 2019 deadline had now received settlement calculations, as of August 31.

The MPs' report found more than 60 families were believed to have lost their homes as a result of the loan charge and two respondents reported they had been made homeless. 

Further respondents said they had "seriously considered" suicide facing the charge and the parliamentary group also received reports of alleged miscarriages due to the stress of the situation. 

The All-Party Parliamentary Group said much of the sentiment expressed in its most recent findings was similar to that published in its March survey - but where previous responses had focused on the legislation itself as the cause of distress, resentment was now growing towards HMRC's behaviour "wreaking havoc on taxpayers' lives". 

The report said: "In addition to HMRC’s inadequate ‘service’ towards taxpayers, participants have continued to emphasise that they are fearful, uncertain and this is now giving rise to a growing sense of anger at the perceived unjust manner in which HMRC is treating them."

The MPs added: "The number of those participants who have claimed bankruptcy remains small. We can speculate that increased levels of bankruptcy are more likely to occur after taxpayers have signed settlement agreements.

"Nevertheless, 94 per cent of participants remain in a perpetual state of limbo not knowing what the future holds." 

An HMRC spokesperson said: "The loan charge was introduced in the 2016 Finance Bill, giving scheme users three years to put their affairs right. We also wrote to all those affected by the loan charge in 2018 to encourage them to come forward ahead of the 5 April deadline this year.

"HMRC has put in more resources to deal with the large numbers of scheme users who have shown an interest in settling their affairs.

"We know that large tax assessments can cause worry and anxiety so we have put in place dedicated resources, including specially trained HMRC officers, to support customers.

"We have also set up a disguised remuneration helpline, which can provide details for vulnerable customers of organisations such as the Samaritans and Mind as appropriate, and we are committed to time to pay arrangements in respect of the loan charge, which can run for as long as the taxpayer needs."