***Press release under embargo until 16 November, 2023***

HMRC targeting of victims not fraudsters must end

The Investment Fraud All Parliamentary Group delivers damning evidence of the activities of HMRC

**Westminster – November 16, 2023** - Evidence unearthed by the APPG shows that HMRC is levying tax charges against investment and pension fraud victims - rather than the perpetrators of the crimes. The inquiry by an influential cross-party panel of MPs and peers has found this is leading to devastating welfare and financial issues amongst victims.

The APPG are particularly concerned by reports presented to them by clinical psychologists and heard directly from victims that HMRC are causing an acute risk of suicide, hospitalisations, loss of homes, marital breakdowns bankruptcies amongst victims already struggling to deal with life changing financial losses due to fraud.

The details are being revealed today at Parliament (Thursday 16 November) in the first inquiry report from the Investment Fraud All Party Parliamentary Group. The inquiry was set up in June 2023 to hear from victims and expert witnesses and to consider what steps should be taken to improve victim outcomes and reform the current system.

Leading lawyers and experienced investigators gave evidence to the inquiry and described the suspected frauds involved as complex, often committed by regulated advisors or professional advisors, often involving false or misleading advice and/or part of a broader suspected conspiracy to defraud. They described how this issue has had a particularly stark impact on pension savers and groups that are highly targeted by fraudsters such as sports professionals and military veterans.

Barrister Adam Richardson of 1EC Chambers commented, “These are historic suspected crimes that took place often over 10 years ago with HMRC taking action decades later against victims whilst ignoring the actual criminality and offences that have taken place. They are chasing low-hanging fruit, innocent victims of crime, whilst completely ignoring the criminals and scammers who are breaking the law. It’s draconian, completely unjust and allowing fraudsters to run riot with impunity.”

HMRC reportedly has no policy in place for dealing with victims of pension and investment fraud which tax advisors reported to the Inquiry means HMRC are operating in an inconsistent manner without accountability and without a clear route available to victims to challenge liabilities.

Expert witnesses also raised concerns that HMRC are not a signatory to the Victims Code of Practice. The inquiry also considered evidence from clinical psychologists and counsellors treating victims who reported that victims were experiencing “secondary victimisation” directly by HMRC actions themself including significant emotional and physical harm. They highlighted an acute risk to life if HMRC continues with its current strategy.

Numerous victims themselves also gave evidence of being driven to attempt suicide in addition to revealing how they had been hospitalised and suffered nervous breakdowns because of this issue.

Commenting on the report, Rick Muir, Director of the Police Foundation, an independent think tank for policing in the UK said: “This report should be taken very seriously by the government and immediate action must be taken. Investment scams can have terrible human consequences. Tackling these threats is being insufficiently prioritised within both policing and HMRC and much more needs to be done to support victims. The scandal of ‘double victimisation’ needs to end: HMRC should not be pursuing fraud victims for tax liabilities incurred as a result of the fraud.’

Caroline Nokes, MP for Southampton North and Romsey and Co-Chair of the APPG on Investment Fraud, commented: “The report makes for sober reading. Our APPG Inquiry has heard reports of a myriad of ways in which investment and pension fraud victims are being comprehensively failed in the UK right now. There appears to be no justice at all for these victims. HMRC are contributing to poor mental and physical health outcomes for victims, with barely existent policies or safeguarding. The accounts of witnesses were heart-breaking and painted a picture of misery and a total disregard for victim welfare. HMRC’s focus should be on stopping these frauds at source and holding the perpetrators responsible – not persecuting victims.”

APPG Co-Chair Alex Sobel, MP for Leeds North West added: “ The Government must now listen and put a stop to this practice and ensure a better system of protection and support for investment and fraud victims. What we have right now is a system causing great harm to victims and compounding their trauma creating a double victimisation as they are subjected to re-traumatisation and further losses by HM Revenue & Customs. That must stop. A clear, transparent policy and new codes of practice are urgently required at HMRC to ensure victims are treated appropriately. The APPG will not rest until tangible improvements are delivered”

The APPG is calling for an immediate suspension of charges against victims, an independent government review and reform at HMRC.

Sir Stephen Timms, former Treasury Minister and the current Chair of the Work and Pensions Select Committee sat on the Inquiry panel and stated: “Treasury and HMRC have important and difficult jobs to do. Its vital for all of us that they raise the revenues due, but there must be appropriate checks and safeguards, as HMRC recognises in its Charter Responsibilities. The system does not appear at present to be operating fairly towards victims of crime. Careful steps to safeguard victims have been taken in other countries, but not in the UK. With clear evidence of direct harm being caused to victims, there is a compelling case for a thorough, independent review. This inquiry supports the conclusion of the Work and Pensions Committee in its March 2021 report that HMRC must do more to support scam victims left owing large tax bills.”

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Notes :

1. For media enquiries, please contact the APPG secretariat on secretariat@investmentfraudappg.co.uk

2. Victim representatives Danny Murphy (Match of the Day Presenter representing sports professionals impacted by this issue) and Sue Flood (APPG Victim Representative and pension fraud victim representing pension victims) have kindly offered to be interviewed. Sue can also organise interviews with other victims. Please contact Sue Flood on hello@investmentfraudappg.co.uk if this is of interest. Panel members and parliamentarians are also available to be interviewed on the subject.

3. The All-Party Parliamentary Group (APPG) on Investment Fraud comprises cross-party parliamentarians and peers who share concerns about the current treatment of investment fraud victims in the UK. MPs and members of the House of Lords from all parties supporting this APPG include: Caroline Nokes (Chair), MP for Romsey & Southampton North, Conservative Party Alex Sobel (Chair), MP for Leeds North West, Labour Party Barbara Keeley, MP for Worsley & Eccles South, Labour Party Alison McGovern, MP for Wirral South, Labour Party Toby Perkins, MP for Chesterfield, Labour Party Sir Stephen Timms, MP for East Ham, Labour Party Lord Mann of Holbeck Moor Keller Postman UK Ltd (Solicitors) currently act as the secretariat to the APPG. More information about the group, including its full membership list, is available at https:// www.investmentfraudappg.co.uk

4. The current APPG Advisory Panel comprise: Carly Barnes (Chair)- Phoenix Sport and Media Group Adam Richardson - Barrister, 1 Essex Court Sue Flood - Victim Representative. Andy Agathangelou - Transparency Taskforce Margaret Snowdon OBE- The Pensions Scams Industry Group Rick Muir - The Police Foundation APPG Supporters include : The Police Foundation Tiger Law 1 Essex Court The Pensions Scams Industry Group The Transparency Taskforce St Paul’s Chambers POC Management.

6. Since the formation of the APPG, the APPG has held regular meetings at which we have had the benefit of hearing from and questioning a wide range of investment and pension fraud experts. These have included leading lawyers, former detectives and tax officials, academics, researchers and policy advisers, professional and specialist bodies as well as tax and financial advisors, clinical psychologists, counsellors and police and tax officers.

7. More information about the inquiry, is available at https://www.investmentfraudappg.co.uk/ inquiry The Conclusions drawn from evidence presented include :

• There is very little to no support for victims following investment fraud.

• Victims are struggling to navigate through a disjointed and complex system in the aftermath of fraud.

• Tax liabilities are blighting victims and are causing severe financial issues and acute mental and physical health issues and family breakdowns.

• Victims are feeling no sense of justice at all - especially from HMRC and feel they are being failed by poor investigation and prosecution rates.

• Investigators claim weak regulation and complex government backed incentive schemes have being exploited by fraudsters.

• There appears to be a significant lack of knowledge of specialist fraud knowledge within the Treasury & HMRC and victims are reporting that HMRC exhibit in practice very little empathy for victims.

• The government’s new fraud strategy launched in May this year (2023), a new Fraud Strategy : Stopping Scams and Protecting the Public, whilst welcomed, does not deal with serious complex investment and pension frauds nor tax liability issues.

9. Key Inquiry recommendations include:

- A moratorium and amnesty for historic victims to avoid foreseeable and preventable loss of life and further harm to victims;

- An independent government inquiry into this issue;

- Reform at HMRC to include prioritisation adjustment, widespread training, new guidance and the introduction of a specific unit and panel within HMRC to deal with investment and pension fraud cases;

- The introduction of new legislation to regulate HMRC’s treatment and taxation of victims;

- The introduction of a new victim welfare advocacy service.