HMRC issue briefing: how HMRC will continue to support customers and the economy

UK HM Revenue and Customs publishes today (27 August) issue briefings for external organisations who want to know more about its work. 

The briefing sets out how HMRC will continue to support customers and the economy over the coming months.

The document contains information about the support schemes and policy changes that HMRC has implemented and their principles for the next steps around tax collection, benefits payments, compliance checks and debt activity.

Support schemes and policy changes

HMRC’s work has been at the centre of the government’s response to COVID-19.

Through the Coronavirus Job Retention Scheme, nearly 1.2 million employers have claimed around £30 billion to protect their furloughed employees. HMRC have also helped around 2.6 million self-employed people claim £7.6 billion in grants and helped employers by reimbursing some of the costs of statutory sick pay for COVID-related absences.

Also, HMRC look closely at anticipated levels of error and fraud so they can make sure that they are responding in a proportionate and appropriate way. 

Where people have made an honest mistake, HMRC want to help people correct them. Claimants can correct any mistake they’ve made without fear of a penalty or other sanction, provided they notify HMRC by 20 October 2020, or within 90 days of receiving the grant, whichever is latest.

Reforming the tax system and principles for the next steps

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.

It is important that the tax system continues to function, so it can fund vital public services such as the NHS. HMRC are encouraging their customers to go digital to make this easier, by using services such as “Making Tax Digital.”

Tax collection and benefit payments

Taxpayers and claimants should continue to file their tax returns and claim forms or renewals on time. While HMRC appreciate there will be many competing priorities for businesses as economic activity resumes, customers should prepare now to meet their future tax obligations.

HMRC are issuing penalty notices to businesses and individuals who have not met their obligations, but they will take a sympathetic approach to those who are struggling to pay their tax or file their returns on time. HMRC will accept the impacts of COVID-19 as a reasonable excuse and offering longer periods to request a review or appeal the decision.

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. HMRC approach is to do this in a way that recognises the very real needs and challenges that businesses and individuals may be facing.

However, in some specific situations, for example where HMRC suspect criminal activity, fraud or significant deliberate non-compliance, including avoidance HMRC will open tax enquiries even if a customer has been severely affected by COVID-19.

Tax debt

As lockdown measures have been relaxed, HMRC have restarted debt collection activities with customers.

If taxes are not paid on time, they will incur late payment penalties and interest, so HMRC encourage people to get in touch if they don’t think they will be able to pay. HMRC do not want people to worry they are always ready to help those who want to settle their affairs. If customers are worried about payment, they should call the dedicated HMRC Payment Support Service as soon as possible.