HMRC Offer to Suspend Tax Investigations amid COVID-19 Pandemic

23 April 2020

Following the provision of helplines, payment extensions and other support offered to those feeling the effects of coronavirus (COVID-19), HM Revenue & Customs (‘HMRC’) are now feeling the effects of this themselves.

With a view to free up resources, HMRC have been advised to issue letters to those with active tax investigations, suggesting that the investigation be suspended until further notice. These letters leave the decision firmly in the hands of the taxpayers; however, they do not provide any indication as to when the investigations would be expected to resume.

Whilst suspending a tax investigation may sound appealing, there are certainly many instances where it would be preferable to proceed with the investigation. Taxpayers should not be drawn in by a false sense of security that a suspension may offer, as now may be a good time to focus on ensuring that tax affairs are in order ahead of lockdowns and restrictions being lifted. It is important to note here that whilst HMRC are offering to suspend investigations, we have not seen any evidence of them offering to close investigations completely!

The decision regarding whether to suspend each investigation should be considered on an individual basis in line with the relevant circumstances surrounding the case. Our Tax Investigations and Dispute Resolution experts are well placed to be able to advise on whether it is preferable to accept the suspension or to proceed with the investigation as normal.

Stuart Petrie, Head of Tax Investigations & Dispute resolutions at AAB said “Suspending enquiries can defer potential problems but will not solve them. Often setting out a clear agreed path towards full closure of enquiries is the most beneficial approach, for all parties concerned.”

For assistance with any ongoing tax investigations, please don’t hesitate to contact Stuart Petrie, or your usual AAB contact.

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