Coping with Covid 19 ~ HMRC Tax Investigations

Taxpayers presently involved in current HMRC investigations and enquiries including Code of Practice 9 investigations will be concerned at how the COVID-19 crisis affects their situation.

Investigation deadlines

 HMRC investigators are expected to not insist on deadlines being met and will offer reasonable extensions of time and will ask taxpayers to do the best they can in the circumstances.

HMRC will accept that if a taxpayer is either ill with coronavirus or self-isolating it would not be reasonable for them to visit business premises for example in order to obtain copies of documents subject to a Schedule 36 information notice. However, if it was reasonable to get someone else to obtain that information on the taxpayer’s behalf then HMRC will expect that to happen.

Exceptions

The exception to this is where HMRC are assessing time limits that are about to expire: for example where the four year period for issuing a discovery assessment is rapidly approaching; or where HMRC are concerned about the solvency of a taxpayer; or there is a risk that the taxpayer will dissipate their assets leaving little or nothing for HMRC to recover. In such cases, HMRC will understandably do whatever is necessary to protect the tax revenue and secure their position.

In these circumstances, the best course of action is for the taxpayer or their adviser to contact the officer at HMRC running their case, explain the difficulties they face and request some leeway in complying with undertakings and deadlines. This will assist HMRC by keeping them up to date and allow HMRC to formally agree extensions of time. We would expect such contact with HMRC to be welcomed and be met with a willingness on the part of HMRC to make allowances for COVID-19 affected clients.

Protecting yourself

 If you are subject to an investigation or concerned that you may be investigated, please get in touch with us so that we can assist.