HMRC: ‘We are here to help’

HMRC has reinforced the message that it recognises “the pressure” many people are still facing because of the Covid-19 pandemic, and it is here to help.

It used the publication of its performance report for the first quarter of 2021-2022 to make the point.

In a statement HMRC said: “We are doing everything we can to help. Our message to customers remains: if you can pay your taxes then you should do so – but if you’re struggling, we want to work with you to agree a plan based on your financial position.”

It added: “During the pandemic we have taken a common-sense approach to individual customer circumstances.

“Where people cannot pay their tax, we have enabled them to defer payment, and to pay off their debts over time in affordable instalments.

“Where people cannot deal with our compliance enquiries, we have deferred these if possible – with some direct face-to-face interventions moving into the next financial year.”

The report revealed that the amount of outstanding tax debt has continued to reduce as HMRC has “supported customers to pay where they can, including through affordable instalment plans.”

And it added: “As the UK slowly emerges from the pandemic, we are also working towards a return over time to more normal levels of compliance activity, while recognising the very real needs and challenges that businesses and individuals still face.

“We are contacting customers who have fallen behind with their tax during this difficult time. At all times, we will take an understanding and supportive approach to dealing with those who have tax debts or are concerned about their ability to pay their tax.”

It added: “These decisions to support customers – as well as the economic impact of the pandemic itself – have inevitably had an impact on compliance yield (the additional revenue we collect from our compliance activity).

“Between April and June 2021, with much of the economy still under Covid-19 restrictions, compliance yield remained lower than its usual pre-pandemic level for quarter one, at £7.4billion. However, we expect yield to recover over the course of the financial year.

“As the country slowly returns to a steady state, we are restarting our debt collection work – but we will continue to carry out this work in a way that is sensitive to customers’ altered needs and capabilities.

“Our immediate priority for customers is to continue helping them to comply with their tax obligations and supporting them with the economic impact of the pandemic, through the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme (both of which have been extended to September 2021) and other measures to support people while the economy recovers.

“As the UK builds back better, we will continue to ensure the right tax revenue comes in and protect the tax system and individuals from fraudulent attack.

“Our approach to increasing compliance activity will be informed by customers’ individual circumstances, particularly if they are still severely affected by the effects of the pandemic.

“We will also carry-on supporting businesses to adjust to the changes to trading rules following the UK’s transition from the EU, so they can continue to compete successfully on the global stage.”