HMRC sending people 'soul destroying' envelopes saying they owe £43,000

HMRC has moved to dole out more controversial tax demands – despite links to suicides. The HMRC tax office continues to target victims after ruling to drop the decades-old charges, it has been reported by the Telegraph newspaper today.

HMRC has launched fresh action against 2,700 victims of the loan charge scandal. The loan charge scandal emerged after controversial legislation which made tens of thousands of contractors who were paid their salaries through loans retrospectively liable for tax their employer should have paid.

Paul Carroll was hit by a 17-year-old tax bill in February and said: “I can’t describe what it was like when that brown envelope came through the door. It was soul-destroying.” The letter stated that Mr Carroll owed HMRC £43,000, along with £21,000 in interest.

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Mr Carroll is one of 2,700 taxpayers in the past two years who have received a letter from HMRC, out of the blue, demanding payment of a life-changing sum of money. A group of 200 loan charge victims will face HMRC in a court hearing later this year, the Telegraph has reported.

Rhys Thomas, a tax adviser at WTT Consulting, said the letter was “carefully designed” and warned: “The section 684 notices are quite remarkable. They’re very tight on timelines, they don’t give any sense of the actual liability and they don’t give any sense of the due diligence HMRC have carried out.

“If you receive a letter that doesn’t contain a demand, you might think ‘I don’t need to do anything’ but after 30 days they can then send you a demand. Individuals’ options to defend themselves are greatly reduced if they miss the representation.”

A spokesperson for HMRC previously said the Morse Review "recommend we use our normal powers to investigate and settle cases taken out of the Loan Charge". A HMRC spokesperson said: "We appreciate there's a human story behind every tax bill and we take the wellbeing of all taxpayers seriously.

"We recognise dealing with large tax liabilities can lead to pressure on individuals and we are committed to supporting customers who need extra help with their tax liabilities. We have made significant improvements to this service over the last few years.

"Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about your options."