HMRC resumes compliance checks, even though CJRS has no appeals process

The taxman will next week resume “normal compliance activity” following the hold he put on HMRC investigations due to covid-19.

Issuing the alert, a specialist in tax enquiries said that “agents” of taxpayers who were under scrutiny before HMRC’s compliance pause would hear from the department “over the next few weeks.”

“From next week, we will see a step up in their compliance activity,” warns the specialist, Jesminara Rahman, referring to the week commencing Monday June 8th.

“For those that opted to continue working their tax investigations, [HMRC] caseworkers have been handling their covid-19 support scheme duties and resuming casework when they are free.”

For the last two weeks, HMRC's fraud investigation teams have been working as normal, but some exceptions have apparently been made to permit reviews of coronavirus-related schemes to be run.

'No appeals process for furlough scheme'

However, the pandemic itself could now indirectly trigger a new wave of activity for HMRC compliance officers.

“There is no appeal process for either the Self-Employed Income Support Scheme or the Coronavirus Job Retention Scheme,” said Rahman, a director of Tax Resolute Ltd.

“There is only the option of a review at this stage. Although I understand that HMRC are putting in another stage after the first review.”

'Difficult to proceed'

Asked by ContractorUK what that additional stage might entail, the tax specialist suggested it will be designed to give the CRJS-user another chance to put their case.

“There is no appeal for CJRS claims that are rejected, instead there is the option for the taxpayer to request a review,

“If the review doesn’t uphold the taxpayer’s CJRS claim, then it is difficult to proceed further [so] HMRC are looking at another stage if the CJRS claim is rejected at review”, she said.

'Lack of footprint'

Earlier this month, Rahman took to LinkedIn to reveal that HMRC will accept ‘covid-19’ as a ‘reasonable excuse’ in appeals against assessments and tax penalties, or in relation to late filing.

But problematically, she points out that there is a "lack of footprint" regarding symptoms for covid-19 infection, especially if individuals with the virus do not visit their GP or hospital.

“[Then], HMRC will look at other factors; dip in turnover, lockdown [of a business], social personal distancing and furlough claims,” the specialist exampled, reiterating yesterday:

“[So some sort of] evidence would need to be provided [to HMRC] on how the covid-19 situation has impacted on the individual and/or business. One cannot simply put down ‘Covid19’ as an excuse without substantiating it.”