As the economy continues to grow post-pandemic, we can expect to see a 'sea change' in how HMRC approaches tax debt. During the pandemic, they offered a lot of help to both individuals and businesses ...
HMRC says that if you can pay your tax debts you should, but whatever you do, don't ignore them!
But that is all changing now, and as the Government's flagship schemes like Furlough and SEISS wind down, HMRC will return to something close to its normal pre-pandemic debt collection procedures.
"It is still committed to an understanding and supportive approach!"
There is a big 'but' included here. Where a business has little chance of recovery, HMRC says it has a responsibility to act. If the Government's support schemes have kept a company on life-support, then HMRC may do something about it. The emphasis is on keeping viable businesses supported.
HMRC will contact you if there are any outstanding tax debts, and it's essential not to hide from them. If you or your company has tax due, then taking the initiative and speaking to HMRC before they initiate contact with you will work in your favour.
"HMRC says that if you can pay your tax debts you should, but they will help you if you can't!"
Of course, they will agree to a payment plan based on your current financial position; they really do want to help you. But again, I say don't hide from them, or they may escalate the debt to a collections agency, and then you could be in real trouble.
While HMRC still emphasises a cautious approach to debt enforcement action, they have extensive powers to look into your financial affairs, so do take appropriate action before this stage is reached.
Early engagement with HMRC is really important.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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