HMRC has suspended inquiries into taxpayers and businesses under investigation as a result of capacity constraints because of the coronavirus pandemic.
It has written to taxpayers to ask them not to request information or documents from HMRC or press for responses to requests that have already been made. In some cases they are suspending inquiries completely.
HMRC said it was less able to carry out investigations under the shutdown and taxpayers would also have reduced capacity to carry out the necessary follow-ups.
This will come as a relief to those in HMRC’s firing line, but targets should not be lulled into a false sense of security, tax firm Blick Rothenberg has warned.
The firm urged people to use the economic shutdown to get their affairs in order rather than delay the paperwork until business operations returned to normal. The tax will still be due once the lockdown is lifted.
Fiona Fernie, of Blick Rothenberg, 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.”
Ms Fernie added that HMRC had assembled a 2,000-person taskforce to help taxpayers that needed additional time to pay, which increased the likelihood of extensions being agreed.
Anybody seeking additional time to pay will need to prove that Covid-19 has affected their business and ability to pay and present a plan for repayment. This includes a proposed timescale for deferral of the tax and evidence to show that costs are being well managed.
“For businesses, that will probably mean provision of management accounts and preparation of a cash flow forecast. Individual taxpayers are likely to need monthly income and expense statements and a statement of personal assets and liabilities,” said Ms Fernie.
The longer the period being requested for time to pay the more evidence HMRC is likely to require.