HMRC Support For Covid-19

HMRC has said that it will continue to support customers and the economy.

Throughout the pandemic, HMRC’s priority has been to deliver government support to protect people’s livelihoods and help businesses get through this difficult time financially. As the UK begins to emerge from COVID-19, the country will face serious economic challenges. HMRC will support businesses and individuals to adapt to a changing economy while continuing to help fund public services.

It will take time for the UK to recover and rebuild the economy. HMRC’s purpose is to collect the money that pays for HMRC public services and pay out the correct financial support to those in need. HMRC will carry out this vital work in a way that is sensitive to any customers’ altered needs and capabilities.

HMRC will work with HMRC customers and stakeholders over the coming months. HMRC are committed to being as open and as transparent as possible when HMRC make any changes.

Support Schemes And Policy Changes

HMRC’s work has been at the centre of the government’s response to COVID-19. Whether that’s by administering the new support schemes, changing HMRC operational approach or through more than 80 other policy changes.

Through the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), HMRC have supported millions of people.

HMRC’s priority in administering the support schemes has been to get money to the people who need it as quickly as possible.

While doing this, HMRC must also protect the schemes against abuse from organised criminal attacks, inflated claims and other non-compliance. HMRC designed these schemes in a way that reduced the likelihood of mistakes happening and removed opportunities for fraud.

Where honest mistakes happen, HMRC has been helping customers put it right, but are taking tougher action on deliberate fraudulent behaviour. HMRC analysts are using multiple data sHMRCces to quickly identify discrepancies. HMRC are seeing clear patterns that make fraud easier to spot.

In the Budget, the government announced it was investing £100 million to expand the scope of HMRC compliance work.

The Taxpayer Protection Taskforce will see HMRC commit around 1,200 people to recover money paid out to incorrect and fraudulent claims. HMRC have opened 10,000 inquiries into COVID support scheme claims so far and has another 5,000 in the pipeline. The £100 million investment will see HRMC double the number of inquiries to at least 30,000.

HMRC continue to encourage businesses and individuals to come forward and self-correct if they have made a mistake in their claim. Where people have made an honest mistake, HMRC want to help people correct them.

The quickest way to contact HRMC is through HMRC digital channels.

Many of the operational policy changes have flexible end-dates as they depend on the easing of public health interventions. These will be withdrawn when HMRC are confident that they are no longer required. Some easements provide an opportunity for modernisation, so wherever possible HMRC will make these positive changes permanent.

Reforming The Tax System

COVID-19 has emphasised the need for the tax system to be more adaptable, resilient and responsive. The government has announced a 10-year strategy for building a trusted, modern tax administration system.

These reforms will offer greater flexibility and scope to provide targeted support to people and businesses in the face of future national crises and will increase the resilience of the tax system. Modern digital systems and real-time information will help people to get their tax right first time and make it much harder for people to avoid paying the tax due.

HMRC is consulting on how the tax administration framework could be reformed to support a trusted, modern tax administration system.

Principles For The Next Steps

Over time, as the threat of the virus recedes, the country will slowly return to a steady state – a ‘new normal’ – and HMRC’s activities are no different. HMRC will of course keep the situation under constant review to ensure HMRC aren’t moving too quickly or doing anything which could unnecessarily jeopardise the nation’s economic recovery as HMRC continues to adapt to the impact of the pandemic.

HMRC will follow some key principles to make sure HMRC continue to support the individuals and businesses of the United Kingdom, while protecting the tax system and bringing in the money to fund the country’s vital public services.

Tax Collection And Benefit Payments

Taxpayers and claimants should continue to file their tax returns and claim forms or renewals on time. Coronavirus support payments, including the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, paid to businesses should be included in tax returns.

HMRC are issuing penalty notices to businesses and individuals who have not met their obligations. HMRC will accept the impacts of COVID-19 as a reasonable excuse and offering longer periods to request a review or appeal the decision. As time goes on, HMRC would expect more customers to meet the deadlines and HMRC will be looking more closely at the appeals where COVID-19 has been cited as a reasonable excuse.

Compliance Checks

A ‘compliance check’ allows HMRC to investigate someone’s tax affairs if HMRC think they may not be paying the right amount of tax.

Where there are existing ongoing compliance checks HMRC will continue to take a customer-first approach and work or pause cases as circumstances dictate. This means that during this period, HMRC will usually only open a new enquiry into those badly affected by COVID-19 or those leading the fight against the virus if HMRC think they can engage and resolve the enquiry.

However, in some specific situations, HMRC will open tax enquiries even if a customer has been severely affected.

These situations are:

• where HMRC suspect criminal activity, fraud or significant deliberate non-compliance, including avoidance
• where not doing so would mean missing a deadline preventing us from ever collecting the unpaid tax
• where HMRC are protecting their employees (for example the National Minimum Wage)
• for a mandatory check

HMRC know people may not be able to respond immediately, so HMRC will make it clear that they will not be penalised for any delay as a result of the outbreak, although interest will still apply on any unpaid tax.

It will be difficult for HMRC to identify all customers severely affected and HMRC may not always get this right, but HMRC will consider individual circumstances when taxpayers share these with HMRC.

Some of HMRC work to make sure people are paying the right tax takes place on a one-to-many basis. Contrasting with HMRC one-on-one interventions, one-to-many activity is where HMRC communicate with a number of people at once about the same issue.

One of HMRC vital roles is to make sure that businesses who pay the right tax aren’t disadvantaged or undercut by competitors cheating the system, or who make errors and pay less tax as a result.

HMRC will continue to take robust action to protect customers and the tax system from harm, so HMRC will continue to prioritise tackling fraud and other tax crime, and open enquiries into customers who can engage.

Debt

HMRC will continue to support customers with debts who get in touch with it for further support, for example by offering them payment plans, or helping them to access services such as HMRC Self Assessment Self Service Time to Pay, or New Payment Scheme for VAT.

Tax debts incur interest, so HMRC encourages people to get in touch if they don’t think they will be able to pay. HMRC want to support people out of debt to help them get back on track with their tax affairs, and avoid debts getting bigger.

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