HMRC’s progress

How HM Revenue and Customs (HMRC) has performed during the first 9 months of tax year 2020 to 2021.

The HMRC has published a news story charting their progress over the past 9 months. It has been a unique financial year as HMRC continues to be at the heart of the government’s COVID-19 response, delivering financial support to millions of businesses and individuals .

Additional priorities are to help businesses understand the new post-Brexit rules and support customers to pay tax on time, while protecting the tax and payments system from fraud.

Supporting taxpayers

Its been a tough year of urgent and unexpected challenges for HMRC yet has delivered unprecedented financial support schemes and offer the best possible service, through an almost entirely home-based operation.

The Chancellor extended the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme throughout quarter 3 and announced that the schemes would continue to offer support until April.

At midnight on 13 December 2020, HMRC had enabled 1.2 million employers to claim £46.4 billion for 9.9 million furloughed jobs through the Coronavirus Job Retention Scheme. Also provided £18.5 billion of support to the self-employed, with around 7 million claims made across three Self-Employment Income Support Scheme grants.

HMRC COVID-19 webchats, an alternative to phone calls, helped more than 441,000 customers, and running 600 webinars on COVID-19 support topics, with 290,000 attendees.

HMRC made it easier for more Self Assessment customers to apply online to spread their tax bill over up to 12 months. Since October 2020, 46,700 Time to Pay plans were set up online with a total value of £147.7 million. Self Assessment customers who cannot file their tax return by the 31 January deadline will not receive a late filing penalty as long as they file online by 28 February.

It has been a difficult 9 months, with HMRC working at stretch and speed, serving customers as best as it can and continuing to chase non-compliance. It has moved staff to support the coronavirus helpline and support schemes and recruited 1,500 new temporary staff into customer service and compliance roles.

Tax receipts and compliance

The economic impact of the COVID-19 pandemic is also having an inevitable effect on tax receipts, compliance yield and customer debt. With deferred payments, debt is abnormally high holding £65 billion of debt, around £45 billion more than last year.

By the end of December, HMRC had collected £394 billion in tax, compared to £457 billion at the same point in 2019.

HMRC is prioritising support for those in urgent need, taking a sympathetic approach to those struggling to pay their tax or file returns.

HMRC always tackle the minority who don’t play by the rules and is continuing to use its criminal and civil powers where it believes someone is trying to cheat the system.

HMRC is also working hard in rejecting or blocking thousands of fraudulent claims against COVID-19 support schemes, starting post-payment compliance work, helping to correct any mistakes made in applications but also identifying and tackling instances of fraud and abuse. Six arrests have already been made for suspected fraud against these schemes, with additional criminal investigations underway.

Looking ahead

In the final quarter HMRC’s immediate priorities remain to help Britain cope with the economic impact of COVID-19, support them to pay tax on time, and protect the tax and payments system from fraudulent attacks.

HMRC’s other priority is to help businesses navigate the new rules following the biggest border change for more than 40 years, after the UK reached a Free Trade Agreement with the EU which came into force on 1st January 2021.

HMRC’s message is clear: if you can pay your taxes, you should do so – but if you’re struggling, it will listen and do its best to support you. Anyone concerned about paying their tax is urged to contact HMRC as early as possible to discuss ways to help.

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PAYadvice.UK 4/2/2021