November 9 2021

COVID-19 Pandemic: United Kingdom Updates Policy Towards Supporting Affected Taxpayers and the Economy

Source: IBFD Tax Research Platform News

On 9 November 2021, HM Revenue and Customs (HMRC) updated its tax policy to reflect its latest position on support schemes and policy changes as a response to the COVID-19 pandemic, as well as its principles on tax collection, benefits payments, compliance checks and debt activity. Further details are summarized below.

Firstly, in its attempt to guarantee that funds from support schemes, including the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, reach those in need, while abuse, fraudulent behaviour and mistakes are minimized, HMRC plans to commit more than 1,200 people to recovering money paid out to incorrect and fraudulent claims. Existing measures and practices will be reviewed and will either be retained or removed. Also, HMRC will open more than 30,000 one-to-one enquiries into COVID-19 support scheme claims. These actions are expected to allow the Taxpayer Protection Taskforce to recover GBP 1 billion over the next 2 years.

Secondly, HMRC will strive to make sure taxpayers are supported, while the tax system is protected. This will include recognizing the needs and challenges that businesses and individuals face, providing certainty, interacting with fairness and professionalism with the customers and using administrative arrangements to deliver long-term sustainable solutions.

Thirdly, HMRC will continue to conduct compliance checks informed by taxpayers' individual circumstances, particularly if they are still severely affected by the COVID-19 pandemic. This means that people will not be penalized for any delay as a result of the COVID-19 pandemic, although interest will still apply on any unpaid tax. In addition, taxpayers should prepare now to meet their future tax obligations.

Lastly, HMRC will continue to provide support to taxpayers with tax debts and those who are concerned about their ability to meet their tax obligations, by offering them affordable and sustainable payment plans called time-to-pay arrangements. Nevertheless, HMRC is restarting its debt collection work, including insolvency actions against companies, which are now permitted after the moratorium on company winding-up petitions has been partly lifted.