We have now reached the second anniversary of the emergence of COVID-19 which means we will soon reach the second anniversary of the introduction of the UK government’s financial support package for UK businesses which included Furlough, also known as the Coronavirus Job Retention Scheme, and the Self-Employed Income Support Scheme.
What this means is that in 2022 HMRC will receive accounts and tax returns from individuals and companies covering the periods of trading during which this support was claimed.
Those whose staff continued to work whilst furloughed for example, should carefully consider their next steps as it is only a matter of time before HMRC will be able to reconcile furlough claims to filed accounts and tax returns for the same period. How does one explain sustained turnover during the pandemic when most of the workforce was furloughed?
It is estimated that over £5bn has been paid out due to furlough fraud or error. Any business owner who suspects or knows that their claim was incorrect, should consider putting things right as soon as possible. Acting now, allows a tax dispute resolution specialist to recommend a strategy and an approach to HMRC before HMRC dictate the process and pace. Acting early also mitigates penalties further down the line.
What action will HMRC take?
HMRC has already used “one to many letters” previously known as “nudge letters” to encourage taxpayers to come forward to correct any tax irregularities.
In 2022 I expect we will see a combination of:
How can Claritas Tax help me (or my client)?
The Tax Dispute Resolution team at Claritas Tax is experienced in handling all types of HMRC enquiry and investigation. We take clients on directly or work alongside their accountant. Engaging a tax dispute resolution specialist can make a tremendous difference in how intrusive the enquiry becomes, the length of time it goes on for, the ultimate financial settlement and the associated professional fees. No one client’s fact pattern and circumstances are ever the same and the value of our service lies in years of experience of settling cases with HMRC and drawing upon the relationships we have developed with individuals and departments at HMRC along the way.
To find out more about what we do, please get in touch.