Handling Tax Compliance During the COVID-19 Crisis

Handling Tax Compliance during the COVID-19 pandemic will likely have had a major impact on your business. Weathering this storm and navigating through its ramifications is not an easy task. At Data Tracks, we help over 17,000 businesses in the UK with their iXBRL filing needs. As the economy of the UK struggles, organizations feel the burden of stretching resources and adhering to the deadlines for HMRC dues. Now, more than ever, we have received numerous emails for guidance on continuing to be on the right side of the law whilst dealing with the current crisis. Hence, we have put together some frequently asked questions and concerns that could help your company too.

Am I to disclose my problems to the HMRC?

If you are likely to be facing problems sticking to the payment deadlines, the most helpful route is to let the HMRC know in advance. With a number of policies being announced every day to relax the rules a little, it may be to your advantage that they are aware of your problem. If you do come under the radar, you will have documented communication to show in order to mitigate any penalties later. Want to know how to contact HMRC? Get in touch with us and we can guide you.

What will I do if I have already received an assessment or notice from the HMRC?

There is no need to panic. Firstly, check if you can appeal for a change or waiver within the specified time limit. Usually, it is 30 days, but your letter should give you more clarity on this. Given the current situation, automated systems generate penalties that the authorities may not strictly adhere to.

How can I appeal?

A written appeal is the standard means of a requisition. Your letter should state the basis of your appeal and the reason for doing so. With the current crisis, Tax Faculty anticipates that the most common basis for appeal to be ‘reasonable excuse’. Therefore, it may help to supply additional documentation supporting your claim. Remember to include relevant reference numbers like your Unique Tax Reference Number. If an appeal form is part of your notice from the HMRC, you may simply need to fill that out and send it.

‘Reasonable Excuse’ – What does it mean?

In a given set of circumstances, if the reason for the delay in payment of taxes by the taxpayer is beyond his control, it cannot be his fault for having failed to pay. Therefore, a penalty is not applicable. Most provisions have this as a clause to provide for unforeseen situations.

A global pandemic is highly likely to be a part of this category. The circumstances that have led to the current economic situation could be considered a reason strong enough to not being able to meet payment deadlines to the HMRC. However, a letter stating how the crisis has affected your company may need to be furnished for the authorities to consider your appeal. For instance, has social distancing caused an inability to run your company? Have revenues declined due to this and other inefficiencies caused by the rules mandated by the government? It may be great to give details and justify the lack of funds.

In summary, tax compliance is one area of your company’s functioning that you cannot ignore. Try and keep on top of this wherever possible and do not forget to let the HMRC know of any expected delays and defaults. This may help to get back on your feet a seamless task later. For any concerns, details, and guidance on navigating these waters, you always have our experts at Data Tracks to rely on. Feel free to get in touch with us at enquiry@datatracks.co.uk