HMRC is operating in the same strange new world as the rest of us. And many of us need their help to sort out the financial impact of the health crisis.
This is the government department that is responsible for administering the coronavirus job retention scheme for furloughed workers and the ‘(COVID-19) Self-employment Income Support Scheme’. Amongst other things.
Their staff are implementing new processes under the mandated social distancing and self isolation procedures. They are doing at top speed, so that financial support reaches individuals and businesses as quickly as possible. At the same time, they are protecting us against criminals who are trying to use the situation to defraud both the Treasury and individuals.
As a result of this extra workload, and with no additional staff, some of their investigations have been put on hold until normal service can be resumed.
What types of investigation are affected?
If HMRC suspect that a business or individual taxpayer has committed tax fraud, they can launch a code of practice 9 (COP 9) investigation.
This gives those being investigated the opportunity to resolve the situation before it becomes a criminal matter.
HMRC send a letter to notify you that a COP 9 tax fraud investigation has been opened up against you. You then have a period of 60 days to submit your evidence to the contrary. This is an “opportunity to make a complete and accurate disclosure of all their deliberate and non-deliberate conduct that has led to irregularities in their tax affairs.” This is the exact wording from HMRC’s Code of Practice 9 Guidance document, which you should read in full if you have already received such a letter.
If HMRC “suspects that the recipient has failed to make a full disclosure of all irregularities, the Commissioners reserve the right to start a criminal investigation with a view to prosecution.”
What should I do if I’m in the middle of this now?
Given the new burdens place on HMRC at the moment, expect your case to be paused. You may receive a letter from them telling you this. They are currently not chasing any information they’ve already requested and they are not making any new requests for information or documents.
This is an acknowledgement that those under investigation may be ill or self isolating. And that there is a necessary diversion of HMRC personnel to other COVID-19 matters.
You need to know that this doesn’t mean that your case has gone away. If you owe HMRC, you’ll still owe them when we come out of this current health crisis. They are not wiping the slate clean, they are simply re-prioritising their workload.
You need to prepare. Both in readiness for the reopening of your business and in order to face the investigation. Make sure every detail of your paperwork is double checked, organise all your evidence, discuss everything with your accountancy department if you can.
Read HMRC’s online guidance and be certain that you are providing them with everything they need. Then, when your case makes it to the top of their list, you’re already fully prepared.
And if you have made use of any of the government’s support packages, makes sure that it’s all by the book and you keep all the evidence.