HMRC are suspending enquiries into taxpayers and businesses that are under investigation as a result of the COVID-19 pandemic.
HMRC is writing to taxpayers under enquiry acknowledging that during the existing lockdown they are being instructed not to request information or documents and not to press for responses to requests already made, and in some cases they are suspending enquiries altogether.
However, tax and advisory firm Blick Rothenberg is urging people not to be lulled into a false sense of security.
Tax dispute resolution partner at the firm Fiona Fernie said: “For individual taxpayers and businesses whose activities are currently curtailed, it would be sensible for them to use the time they have now to deal with HMRC rather than store up problems for the future, although clearly employees who are furloughed cannot be involved in responding to HMRC enquiries on behalf of their employers. After all, if tax is due – it is still going to be due when we come out of this.”
She added: “In addition, HMRC is focused at the moment on the fact that many taxpayers will need time to pay [TTP] and indeed they have a dedicated helpline manned by 2,000 staff dealing with this. Hopefully that will mean that it is possible to agree something sensible for the taxpayer.
“However, taxpayers do need to bear in mind that tax liabilities are only deferred not extinguished and for TTP they will need to be able to provide information which demonstrates why they need TTP, the impact that COVID-19 has had, and will need to be able to present a plan for repayment.”
Since nobody knows how long the impact of COVID-19 will last, it may be possible to renegotiate TTP if the original agreement cannot be met, according to Fernie.
“If that turns out to be the case taxpayers should always notify HMRC of the difficulty as soon as possible and before missing a payment,” she added.