There is a serious injustice in the tax system affecting historical victims of pension and investment fraud and it is having a devastating impact on people’s lives. On top of significant loss of retirement savings, HMRC applies punitive tax charges to these victims of up to 55%, plus interest.

These historical victims were misled into passing their money to unauthorised schemes by dishonest third parties, but tax law treats the victims as if they are tax cheats – it does not recognise the wrong done by the fraudsters.  This double whammy heaps loss upon loss and is damaging to the victims and their families. It leads to family breakdown, bankruptcy, mental health problems and illness, which in turn means that many victims cannot work to repair the damage. The fraud and the tax issue are therefore damaging to the economy too.

Several victims have already given their painful testimony to the All-Party Parliamentary Group on Investment Fraud, as well as to the Work and Pensions Committee Inquiry into Pension Scams. In many of the cases, the tax charges have been hanging over people for 13 years!

Victims’ stories have been reported in several newspapers and on TV, but nothing changes.  HMRC must be given the power to waive or reduce tax charges in cases where losses were due to dishonesty or misconduct by a third party, to avoid placing added unbearable financial and psychological burdens on people who have already lost everything.

HMRC claims it cannot use its powers to waive or reduce the tax charges under such circumstances, therefore Parliament must change the relevant tax law.  HMRC’s rules ought to fit today’s world where fraudsters prey on innocent people then walk away without consequences, leaving people from all walks of life, including nurses and fire fighters, to face the music.

Help us change this terrible situation