HMRC’s ‘harassment’ worsened our mental illness

HM Revenue & Customs has been criticised for failing to recognise mental health issues after it continued to target vulnerable taxpayers despite being issued with warnings from medical professionals. Telegraph Money has been contacted by readers who said their mental health had deteriorated because of the way they had been hounded for cash by HMRC. In some cases this pursuit continued even after the Revenue acknowledged that they were vulnerable.

In one instance a high-profile figure attempted suicide after HMRC failed to correctly note his vulnerable person status and continued to contact him. Others have been left unable to work after suffering anxiety and depression as a result of HMRC inquiries, while one reader asked solicitors to intervene on his behalf.

These cases highlight the lack of recognition and protection for those with mental health difficulties.

HMRC apologised for not meeting its own guidelines, losing letters and failing to return calls.

Andrew Neil, an IT contractor from Llandudno, north Wales, sent multiple letters from doctors to the Revenue, which ignored them. The taxman continued to chase him, which he said led his mental health to deteriorate.

“I have been receiving what I consider harassment from HMRC,” he said. “Two psychiatrists sent letters to HMRC which said I was vulnerable and that it needed to take my mental health into consideration when dealing with me. The reason I made a second psychiatrist write was that the first letter was ignored.”

HMRC acknowledged that Mr Neil was a vulnerable person in November

Mr Neil and Mr Manley’s client are among the thousands of people targeted by the taxman because of the way they structured their finances in the past, using loans instead of payments for their income. These tax arrangements, which were generally considered legal at the time, have since been challenged by HMRC.

Those who have fallen foul now face large tax bills and penalties, sometimes in the hundreds of thousands of pounds. Because of the way HMRC is seeking to collect the tax, the “loan charge” payments due could be much higher than the amount originally owed. In recent weeks 50 MPs have signed an early day motion expressing their concerns over the loan charge and the way HMRC has aggressively pursued individuals.

As well as this disputed debt, Mr Neil also incurred legal and medical costs. He paid for appointments with a psychiatrist to help him cope with the mental health problems exacerbated by HMRC. Mr Neil said he was also forced to instruct a solicitor to write a letter to the Revenue, at a cost of £700, before it eventually stopped trying to contact him.

The lack of recognition for mental health problems is not limited to those who took part in loan schemes. There are other instances where the taxman’s actions have caused or

The Revenue admits failing to follow its own guidelines for dealing with vulnerable taxpayers, says Adam Williams