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HMRC: if you need support, get in touch with us

Author: ICAEW Insights

Published: 16 Apr 2021

The message from HMRC is clear: where businesses are in distress it will provide support, but there must be ongoing conversations.

Throughout the pandemic, HMRC has been at the centre of government support to businesses and individuals. “We’ve offered unprecedented support,” says Marc Gill, Director, Debt Management, HMRC. “When the support schemes were announced – not just the HMRC-administered schemes, but also the local authority grants and government-backed bank loans – it was still very early on in the pandemic. At that time, the first practical support that was in place was being able to delay or defer payments, we offered that through our payments support service. A huge number of businesses and individuals came forward and asked for that support.”

Since then, HMRC has been operating the high-profile programmes, principally the furlough scheme (Coronavirus Job Retention Scheme), but also the self-employment income support scheme (SEISS) through their various phases. Speaking about debt, Gill said, “We were proactively asking customers in debt to contact us through until mid-December when the country went back into lockdown, but the approach has been very different since the beginning of this year. 

“Since summer 2020, we've developed a way of segmenting customers into those who are least, most, and in the middle range of being impacted by coronavirus. We can see this through VAT receipts, PAYE activity, how they have accessed the support schemes, and so on. We've tailored all of our correspondence to offer the right support for customers depending on how they’ve been impacted, to communicate empathetically with them.”

Getting debt under control

Now HMRC is asking people to get in touch if they’re worried about paying. “We’ve been offering case-by-case deferrals,” says Gill. “We’ve been really clear that where people can't pay immediately, especially where the industry itself is shuttered, then we’ve been offering short to medium-term case-by-case deferrals.”

HMRC says it will always try to set up a time-to-pay arrangement where possible and, across the whole of its debt management operation, teams have been retrained, not least to help them rethink what an appropriate time to pay arrangement looks like now, under pandemic conditions. 

“The real challenge has been to get customers’ debt under control and into a payment plan. We look at each customer’s personal circumstances and offer them the length of time that works for them while keeping payments affordable. We can always revisit the plan if the customer is able to pay faster, or slower” says Gill. “What we're trying to avoid is losing contact with customers.”

He points to increased debt as a trigger for companies becoming less viable and also for the impact of that leverage to take its toll on directors’ and business-owners’ mental health. “We know that there was an impact on many business’ and individuals’ cashflows, and the pressure that this might have created. That is why we've been trying to maintain contact, wherever possible, and get people to talk to us about a sensible, time to pay arrangement,” says Gill.

Gill is keen to emphasise the huge shift in HMRC’s processes over the last year or so and to demonstrate how empathetic and supportive HMRC has been. “In a typical year, before the pandemic, we do several hundreds of thousands of field collection visits. But last year, we only did somewhere in the region of about 1,000-2,000. They were all to business premises, not to individual residences, and they were only to seek contact, not to take control of goods or pursue other enforcement action.” 

Continued engagement but no return to pre-pandemic correspondence

So who should you talk to if contact with HMRC is to be maintained? For larger companies, there is likely to be an HMRC customer contact manager in place. For individuals, Gill urges them to use the telephone number that appears on the letters sent out by HMRC, but Gill also points out that HMRC has worked hard on the online guidance that has been created in the pursuit of a more customer-friendly approach.

“We've seen really, really strong engagement from some of our customer base who are absolutely doing their best to pay,” says Gill. “We can also see, not just in the highly impacted by coronavirus segments, quite a few customers who – in the data – have an ability to pay, but we've lost contact with them and they are not paying us. So, there is a real need for us to get back to a normal rhythm of operations.”

But he is at pains to point out that this does not mean a return to pre-pandemic correspondence. “It absolutely won't be hard and fast,” he says. “We’ve worked hard to make sure when we contact customers we do so with empathy and support, and we’re ensuring that’s also the case with the debt collection agencies, who work on our behalf. And we've also introduced improved complaint handling procedures for use where anybody is genuinely uncomfortable with how things are being handled.”

Implications for HMRC

So, what does all this mean for HMRC’s team and systems? “We've got substantially more debt than we’d expect to have if coronavirus hadn’t happened, but we're seeing a consistent level of contact. We've been prioritising our resources towards the coronavirus support schemes, so a significant number of debt management colleagues have been working on the front line on the furlough scheme, and with SEISS, delivering frontline customer service,” he says.

“We've also been focusing on getting customers into our deferral schemes. A huge number of customers have come through those schemes. For self assessment customers, some of whom run businesses, we launched, at scale, our enhanced self-serve time to pay scheme. We’ve got the VAT New Payment Scheme (NPS) supporting customers to pay their deferred VAT which is available until 21 June, but customers should sign up early to take advantage of spreading payments over more instalments.” 

Turning to viability, Gill says HMRC uses a number of analytical models that work alongside speaking to customers, to test companies’ prospects. These are currently not being used as HMRC focuses on supporting customers but, at some point, they will be brought back into service. He is at pains to point out that firmer action is always a last resort and within the context of conversations and contact. 

“Where we haven't had payment, or where we persistently haven't had contact, that will be factored in when we start to visit in person. But we're not ready to move to enforcement action yet, that just isn't our operational approach. Our approach is re-engagement and continued re-engagement, and from our experience that it’s always better for customers to speak to us if they’re worried about paying a tax bill”.

Further reading:

Insights Special: Business Rescue

Conversations are intrinsic to business rescue. Be they with a chartered accountant, a bank, HMRC or any other trusteed individual, business restructuring, refinancing and recovery depend upon communication.

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