Following the tax authority’s “refusal to stop chasing taxpayers” caught by the charge during the lockdown, the accountancy giant argued it should not penalise taxpayers if they are unable to currently respond.
This call for flexibility follows the All Party Parliamentary Loan Charge Group’s letter to HMRC on 2 April asking it to temporarily stop sending letters to taxpayers demanding a response within 30 days during the coronavirus lockdown.
On 7 April, however, HMRC responded by saying it was unable to stop pursuing them due to statutory time limits on collecting tax.
UHY Hacker Young argued that HMRC can be flexible over 30-day deadlines and should therefore “make this clear to worried taxpayers”.
It cited that the authority recently announced it will not be undertaking any debt collection during the lockdown, “showing that the organisation is prepared to be fair to taxpayers during a time of national emergency”.
The firm also argued that many loan charge letters will have been sent to business addresses that have been closed for at least two weeks, and that these addresses could remain closed for an indefinite period.
Taxpayers from these businesses may therefore remain unaware they have even received a letter and will “no doubt miss the deadline before they find out”.
John Sheehan, tax partner at UHY Hacker Young, said: “By taking a hard line on these time limits, HMRC risks adding unnecessary stress in what is already a very trying time for everyone.
“It should make clear that nobody will be penalised for missing a 30-day deadline because they couldn’t respond to a letter.”
He added: “While we understand that HMRC is bound by statutory 30-day time limits in order to collect tax, in practice we know HMRC has more flexibility than it’s letting on.
“It’s vital that HMRC makes taxpayers aware that it will be understanding of taxpayers who are late in responding. It can be flexible in exceptional circumstances and the coronavirus lockdown is nothing if not exceptional.”