HMRC to restart investigations paused because of COVID-19

HM Revenue & Customs have announced that after a brief hiatus, owing to the Coronavirus, they will be resuming investigations into business and personal taxes.

They temporarily paused most investigations in mid-April to reassign resources to implement new systems for the various Coronavirus support initiatives for both businesses and individuals and shift personnel to operate the call centres.

However, the financial support provided over recent months has been costly to Government and they will want to ensure that borrowing is not overinflated by non-compliant taxpayers paying too little tax. Pressure will undoubtedly be applied on HMRC to deal with fraud and underpayments of tax as a matter of urgency.

HMRC has now completed their initial consultation on the draft legislation regarding the taxation of Coronavirus Support Payments which amongst other things deals with the collection of overpayments and how they should treat inaccurate claims. It is anticipated that where companies have made inaccurate claims but cannot repay the overpayment HMRC will collect the amounts direct from the person(s) responsible for the management of the company at the time.

If you receive any correspondence from HMRC regarding an investigation into your tax affairs or a compliance visit it is important that you speak with your adviser as soon as possible to ensure that you receive the correct advice and obtain the best possible outcome.

We provide a Tax Investigation Service to help protect clients against the professional costs involved in a tax investigation or enquiry. This service is backed by an insurance policy we have taken out in our own name. We must stress that dealing with a tax investigation is not included in our normal fees and the costs involved could be substantial. A tax investigation could last for several months if not years and can be extremely stressful for you. Now, more than ever, we strongly recommend you consider subscribing to our Tax Investigations Service.

Contact Anne Wilson in our tax department for more information.

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