HMRC re-assign thousands of staff…

When Lockdown 1 hit in 2020, HMRC penalties dropped like a stone. Income from penalties dropped to £21million in May 2020.

In November 2020, this figure increased by 97% to £41million.

The initial drop happened because HMRC paused much of its compliance and investigative work during the early stages of the pandemic.

• A large number of their staff were temporarily moved to work on the furlough and CBILS schemes, that were implemented in record time.
• More than 6,000 HMRC staff were assigned to work on Brexit related issues during 2019/20.

A recent report by Tax Investigation specialists PfP says that this is now changing again.

They report that HMRC are now shifting resources to investigating potential cases of fraud in schemes such as the Furlough scheme and Eat Out To Help Out. Staff are also being put back into the other core ares of tax investigation work.

HMRC’s own estimates show that up to £3.5billion may have been fraudulently claimed or paid in error under the Furlough scheme alone.

With the scheme being extended to April, it’s likely that more investigations will be made.

Kevin Igoe, PfP managing director, said: ‘The huge amounts the Treasury has spent to try and stabilise the economy during the pandemic means that HMRC is going to come under huge under pressure to recoup as much tax revenue as possible. The taxman will, therefore, be in no mood to go easy on individuals and businesses that they believe have underpaid tax. HMRC will be looking to make up for ground lost in 2020 – that means more investigations and more penalties are inevitable.’

As we’ve mentioned before, it’s essential that you keep clear, accurate records of any and all claims you’ve made under any of the Coronavirus support schemes. They have been hugely costly to operate, and the chances of you needing to prove the validity of your claim is high!