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COVID–19: Dealing with HMRC during the crisis

Updated 11 May 2020: ICAEW’s Tax Faculty summarises what we know so far about communicating and transacting with HMRC during the COVID-19 crisis.

Update 11 May: HMRC will accept delayed appeals against decisions or penalties dated as far back as February 2020 where the delay is due to the taxpayer or their business being affected by coronavirus. Read more

HMRC is expected to publish guidance about changes to facilitate tax administration during the COVID-19 crisis; the limited changes which have been announced to date are summarised by the Tax Faculty below, but further guidance from HMRC is needed urgently.

ICAEW members have raised a significant number of practical issues around communicating and transacting with HMRC during the COVID-19 crisis. These include difficulties for taxpayers, agents and HMRC sending and receiving post, problems with submission of forms and returns and dealing with enquiries including appeals and penalties. These issues have been raised with HMRC and the Tax Faculty understands that guidance will be published. This guide will be updated as new information becomes available.

HMRC online services

Where possible agents and taxpayers should use HMRC online services to help reduce the pressure on the system. As agents are all too aware the services available to agents are more limited than those provided to taxpayers. This may be the time to encourage those clients that are able to use the services available to them in their personal tax account and/or business tax account. Businesses wishing to claim grants through the coronavirus job retention scheme, or the self-employment income support scheme are likely to need access to their business tax account. The Tax Faculty has made representations that agents should have access, but this may not be possible in the short time available to develop these services. It is not yet possible to apply for this support and contacting HMRC will clog up the helplines.

One specific question asked by a member is how to log on to a digital tax account if the two-step verification code goes to a landline or other phone number that is no longer being answered. The solution is to phone HMRC’s online services helpdesk and ask them to remove the existing phone number. The next time the individual attempts to log in they will be asked to set up a new phone number on the account. This process has been in place for some time for situations such as someone changing their mobile phone number.

Some HMRC services require an authentication code to be sent by post when the service is being set up for the first time and receipt of this code may be a problem.

HMRC helplines

HMRC helplines are under significant pressure due to staff shortages and increased demand. The hours on all lines have been reduced to 08:00 to 16:00 and they are closed at weekends. HMRC advises that the lines tend to be least busy between 08:00 and 10:00.

HMRC has set up a specific helpline for businesses struggling to pay their tax due to the COVID-19 crisis but reports from members indicate that this line also has insufficient resource to meet the demand. HMRC recommends that businesses wait until just before their tax is due before contacting them to discuss time to pay. It is not necessary to contact HMRC to defer VAT payments or self assessment payments on account  - the deferral is automatic. Writing to HMRC about payment difficulties is not usually very satisfactory but may be an option to at least get the particular circumstances on record.

Written communication

HMRC’s post rooms remain open but delays to dealing with correspondence are to be expected.

HMRC has introduced digital communication options for dealing with stamp duty and non-statutory clearances. Barristers can now deal with VAT correspondence by email as that particular post room has been closed. Corporate interest restriction elections can be emailed to customer compliance managers or a central email address.

Email options have not yet been extended to more high-volume transactions, but the Faculty hopes that more electronic communication options will become available.

Some forms and returns can only be submitted in paper form eg, P11Ds and CT61s which may pose particular problems and delays. The Faculty recommends that wherever possible form or returns (eg, income tax self assessment returns) be filed online. This is particularly the case if an individual or business wishes to claim a refund for 2019/20.

HMRC enquiries involve a lot of written correspondence, much of which can be time critical. This includes information notices, assessments and penalties with a 30-day deadline to make an appeal. HMRC has discretion over some deadlines but many are statutory.

HMRC has not yet announced any general extensions to filing or other deadlines but the Faculty expects that this may be addressed in forthcoming guidance.

The Tribunal Service has announced that proceedings have been put on hold.