The man in his late 60s, who took his own life late last year, feared he would go to prison if he had not repaid the huge sum before Government changes were enforced. The regulatory changes from the UK’s tax authority effectively comes into force on April 12 is aimed at tackling a type of employment tax avoidance which is often called “disguised remuneration”. Those using the scheme can spread their tax bill instead of facing one large bill at the end of the year.
It is estimated around 50,000 workers across the UK, most of them contractors, were paid through a loan that intended to avoid tax and national insurance contributions.
The law changed in 2016 and the victims daughter said he was paid through one of the schemes for around 18 months in 2012.
She told The Daily Telegraph: “My dad has always been there for me and I never thought I’d be without him so soon.”
As time went on things started to get worse, she added: “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.
“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.”
Meanwhile, in a report published by a group of MPs led my Liberal Democrat MP Sir Ed Davey, it suggested up to six individuals were of taking their own life, whilst it added HMRC were warned last summer that the loan charge posed a “suicide risk”.
HMRC stated no one would have to sell their homes and bankruptcy would only be a last resort and it has reported one case to the Independent Office of Police Conduct (IOPC).
A spokesman said: “We are very sorry to hear that someone has taken their own life.”
It added it was “standard process” to report to the body which oversees HMRC within 24 hours but “in this case, however, we have not been provided with information to identify the customer”.
Individuals who has used the scheme over the last 20 years will have to repay any outstanding contributions by January 2020.
Anyone in employment earning less than £50,000 per year and no longer uses tax avoidance scheme can repay to the amount over a minimum of five years.
Meanwhile, an individual earning less than £30,000 has a minimum of seven years.
A spokesman for HMRC added: “We are appealing to those who haven’t come forward to settle their disguised remuneration debts to do so now.”
For more information of suicide prevention freephone the Samaritans on 116 123.