The taxman has benefited from the ‘proceeds of crime’ by pursuing victims of pension scams, MPs heard yesterday.
While no fraudsters have been prosecuted, their targets are being treated like criminals and hounded for 40 per cent of the value of the cash they lost, the House of Commons was told.
MPs on the work and pensions committee launched an inquiry after the Daily Mail revealed that up to £10billion had been lost in rogue schemes.
The victims described feeling suicidal after their life savings vanished in funds registered with HMRC, making them appear legitimate.
And some face hefty fines because the schemes broke tax laws.
Sue Flood, who is facing a huge tax bill after already losing £250,000
Sue Flood, who is facing a huge tax bill after already losing £250,000 with her partner, said she suffered a breakdown and other victims killed themselves.
The former marketing executive added: ‘It seems perverse that HMRC is benefiting from the proceeds of crime, as in scams that involved dishonesty.
They are treating victims as criminals.’
Miss Flood moved her money into a scheme called Ark in 2011, trusting it because it was registered with HMRC and the Pensions Regulator.
She later learned that, shortly before her transfer, HMRC investigators had met with Ark’s creators because they had concerns.
However they declined to take action or make their concerns public.
‘They had a perfect opportunity to stop the scammers operating,’ Miss Flood said.
‘For me, it’s heartbreaking knowing how many families’ lives have been ruined by scams perpetrated by these crooks after HMRC could have actually closed them all down.
Dennis Waite, 53, lost to an HMRC-registered scammer the £108,000 Royal Mail pension he had spent 21 years accruing
Swift action from HMRC at the outset could have helped avert the disasters of the last ten years.’
Dennis Waite, 53, said his financial future was destroyed after he lost to an HMRC-registered scammer the £108,000 Royal Mail pension he had spent 21 years accruing.
Because the pension was withdrawn early, he is being targeted by the taxman for 40 per cent of his losses.
He said: ‘If it wasn’t registered with them, I wouldn’t have gone anywhere near it. I can say that hand on heart that’s what made me feel it was secure.
'I feel I’m the one being treated like a criminal with the way they’re pursuing me for tax. I’m paying twice now.
‘HMRC should hold a lot more responsibility that they facilitated these scams to go ahead.’
Debbie Abrahams, Labour MP for Oldham East and Saddleworth, said the registration of pension schemes by HMRC and the Pensions Regulator appeared ‘absolutely worthless’.
Rick Muir of the Police Foundation, which researches law and crime, told the hearing that HMRC’s approach to victims was ‘unrelenting and uncompromising’.
He said: ‘It’s a case of double victimisation. We are talking about people who have lost a significant amount of their life savings and it’s put them in serious financial peril.’
Mr Muir added that there was clear evidence some victims were not reporting losses to the police because they feared being hit with tax penalties.
MPs were told it was believed that none of those judged responsible for the scams had been prosecuted.
They include Stephen Ward, a former government pensions adviser who was involved in numerous alleged swindles before the Pensions Regulator finally took action against him in 2018.
He now boasts a Florida property empire, the Commons committee heard.