HM Revenue & Customs and COVID-19

HM Revenue & Customs & COVID-19

The ongoing pandemic continues to wreak financial havoc upon a significant number of our individual and business clients and the wider economy. We continue to offer a full service range during what has been a trying time for our own business, as well as our clients’.

Despite office closures, remote working and furlough arrangements, we continue to assist our clients with their usual accounting, tax and payroll requirements in addition to supporting them where we can in applying for and obtaining many of the Government announced support measures (CJRS, SEISS, small business grants and business rate relief, etc).

We are finding that HM Revenue & Customs (HMRC) response times and levels of engagement around the flagship support schemes has been, on the whole, very positive and client feedback would support that view.

It appears, unsurprisingly, that a significant proportion of HMRC resource has been diverted to the running and administration of the business support scheme. This would go some way to explaining a deteriorating performance in other areas.

Tax compliance services, Corporate and individual Tax Return submission, P11d’s and Employment Related Security returns, the filing deadline for which has now passed, are all largely electronic and require very little in the way of human interaction at HMRC. Filing deadlines have not been relaxed and the HSKS Greenhalgh team continue to help clients with their filing commitments. We are, however, finding that HMRC’s other services, which do require Revenue staff input, have slowed due, no doubt, to the resource diversion issue referred to above.

With checks into taxpayer returns, we are seeing many Revenue officers giving taxpayers and their agents the option to delay matters. Whilst this is largely welcomed, most of our clients would rather seek to keep such checks moving towards a conclusion. When tax clearances have been sought over recent months we are seeing the usual 30 day response timeframe in which HMRC are required to give a response slip quite dramatically.

Client expectations, particularly where an early view is required to proceed with a proposed transaction or restructure, need to be managed when it comes to these HMRC interactions. Early submission, as ever, will help achieve required opinions where time is of the essence.

We are also seeing HMRC agree to extended time limits for completing certain measures (eg, a recent EMI scheme valuation check saw the usual 60 day turnaround for options to be granted extended to 120 days.

With limited exception, we are seeing a helpful stance being adopted by HMRC during the current crisis, which is helpful and to be welcomed. The ability to defer self assessment tax payments for non-corporate entities this July, the recent VAT payment deferral and an openness to Time to Pay Arrangements is similarly welcome. Ensure these arrangements, if necessary, are entered into as early as possible, ideally before the liability falls due, for the best chance of success.

We would encourage businesses who may receive penalties for late payment to query these with HMRC, which we can assist with, as the majority of penalties can be expected to be raised automatically, in error, during the current crisis.

Martin Tomes
Director - Taxation Services