Huge tax bill ‘drove grandfather to suicide’

Government urged to stop pursuing people over decades-old financial plans now considered illegal

A GRANDFATHER who took his own life after receiving a £50,000 tax bill struggled with the stigma of being branded a “tax avoider” by HMRC, his family have claimed.

The man, in his late 60s, was found dead late last year and left a note saying he could not face the shame of being targeted by the loan charge – a newly introduced punitive measure against tax avoidance – his daughter said.

She told The Daily Telegraph how her father had become increasingly withdrawn as the deadline approached and had asked his children whether he would go to prison.

The loan charge, which came into force at the weekend, targets people who used so-called “disguised remuneration” schemes to avoid tax as far back as 1999. The schemes, in which contractors received wages from offshore trusts as tax-free loans, were widely accepted as legal in the 2000s.

The law was changed in 2016 and as many as 50,000 people now face huge bills, with some claiming they could go bankrupt or face selling their home.

A panel of MPS chaired by Sir Ed Davey, the former Liberal Democrat minister, published a report this week suggesting that at least six suicides had been linked to the policy and calling for its implementation to be delayed.

The man’s daughter, speaking to The Telegraph on the condition of anonymity, said her father was a generous man who would do anything for his family. He was paid via one of the schemes for roughly 18 months in around 2012 and was facing a bill of £50,000.

She said: “My dad has always been there for me and I never thought I’d be without him so soon.”

When her father first heard about the charge in 2016, he dismissed it as his “tax thing”. However, as the deadline approached, stress took its toll.

“He did all the right things, submitted everything that he was asked for. Looking back now you can see that he was starting to panic,” she said. “He started saying to my sister, ‘what if I go to prison?’ It was the stigma. HMRC kept saying ‘you have done wrong, it’s tax avoidance’. My dad was a proud man who never broke the law.

“He had to wait months to hear from HMRC. I think that was the straw that broke the camel’s back.”

The MPS’ report claims HMRC was warned of the “suicide risk” of the loan charge last summer. HMRC has said no one will have to sell their main home and it would only pursue bankruptcy as a last resort. A spokesman confirmed it had reported one case to the Independent Office of Police Conduct (IOPC), which oversees HMRC.

The spokesman said: “We are very sorry to hear that someone has taken their own life.” He added that, in such cases, it was “standard process” to refer the matter to the IOPC within 24 hours, but “in this case, however, we have not been provided with information to identify the customer”.

Ruth Cadbury, a Labour MP on Sir Ed’s panel, said it would be “callous and reckless not to pause the loan charge for a proper independent review”.