Following a trial, HMRC will now be temporarily closing the VAT and corporation tax phonelines on several days across February and March to help the tax authority deal with a covid post backlog
Over the trial closure between December and January, on average, HMRC cleared more than 4,000 additional pieces of post each day during the test and learn. This resulted in an increased productivity rate among colleagues, above its initial planning assumptions, as staff were able to focus on the task without stopping mid-way through to take a phone call.
There was an increase in telephony contact on Monday’s following the Friday closures, with an estimated 2,500 extra calls over the three Mondays (using November as a comparator). HMRC said it was ‘able to offer an acceptable level of service to these customers despite the additional demand’.
HMRC has sent out communications to tax agents and accountants advising them of the planned closures which will affect phone lines until the end of March.
An HMRC spokesperson said: ‘We are temporarily closing two specialist phonelines on Fridays so we can work through our stocks of post more quickly to help us return to pre-pandemic service levels in these critical areas of work.
‘Temporarily closing these two phonelines was trialled in December and helped us clear more than 4,000 extra pieces of post on each day they were closed.
‘We understand the frustrations of customers and agents who are waiting for HMRC to get to their individual enquiry, we’re sorry that we can’t get to everyone more quickly and thank them for bearing with us.’
Following the success of the December test and learn, the corporation tax and VAT telephony lines will see a further telephony shuttering exercise on Fridays in February and March 2022:
- Corporation tax – 25 February to 25 March 2022; and
- VAT (excluding bereavement) – 25 February to 25 March 2022 (excluding 4 March).
HMRC said it had listened to feedback from stakeholders and has selected these dates to avoid key events on these lines, including the VAT peak.
Based on current plans, HMRC expects to see a significant improvement in service levels in these critical areas.
Time is running out for the 1.5 million taxpayers who still need to file their self assessment tax return and avoid a £100 penalty, HMRC has warned
HMRC extended the deadline for completing 2020/21 tax returns to 28 February, deferring late filing penalties for a second year.
About 12.2m taxpayers are expected to file a tax return for 2020/21 tax year and more than 10.2 million were received by 31 January. This still leaves 1.5m tax returns which need to be completed.
HMRC has given taxpayers until 1 April to pay their outstanding tax bill or set up a time to pay arrangement to avoid receiving a late payment penalty. Interest has been applied to all outstanding balances since 1 February.
The existing Time to Pay service allows any individual or business who needs it, the option to spread their tax payments over time. Self assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return. Almost 100,000 people have used this service since April last year, spreading the cost of their tax bill into manageable monthly instalments.
For anyone who owes more than £30,000, or needs longer to pay, they should call the self assessment payment helpline on 0300 200 3822.
Myrtle Lloyd, HMRC’s director general for customer services, said: ‘There is one week left to complete your tax return if you haven’t done so already. And for anyone who is worried about paying their tax bill, there is support available – search ‘pay my self assessment’ on gov.uk.”
From 22 February, taxpayers will be able to make self assessment payments quickly and securely through the HMRC app either connecting to their bank to make their payments or pay by direct debit, personal debit card or corporate/commercial credit/debit card.
The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers need to declare Covid-19 grants and support payments up to 5 April 2021 on their self assessment, as these are taxable, including:
- Self-Employment Income Support Scheme (SEISS);
- Coronavirus Job Retention Scheme; and
- other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme
The £500 one-off payment for working households receiving tax credits should not be reported in self assessment.
Kevin Sefton, CEO of untied, said: ‘We urge affected taxpayers to take control of their tax returns now to avoid adding an extra £100 to their tax bill. Even if individuals think they have a reasonable excuse for filing late, it’s still best to file returns as soon as you can possibly do so and then contact HMRC later about appealing any penalty.’
HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. It is important to always type in the full online address www.gov.uk/hmrc to get the correct link for filing their self assessment return online securely and free of charge. HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If you’re in doubt, do not to reply directly to anything suspicious, but contact HMRC straight away and search gov.uk for ‘HMRC scams’.
Businesses across the country are being encouraged to apply for remaining grant funding from local authorities to help them through the pandemic
Hospitality, leisure and accommodation businesses can still apply for one-off cash grants of up to £6,000 through the Omicron Hospitality and Leisure Grant scheme.
The funding is made up of £556m available through the £635m Omicron Hospitality and Leisure Grant (OHLG) scheme, which launched in January 2022, and a further £294m through the Additional Restrictions Grant (ARG) scheme which has been paying out funding since November 2020.
The Omicron scheme provides businesses in the hospitality, leisure and accommodation sectors with one-off grants of up to £6,000 per premise.
The one-off grants of up to £6,000 for eligible businesses in the hospitality and leisure sectors, depend on rateable value:
- businesses with a rateable value of £51,000 or above: £6,000
- businesses with a rateable value between £15,000 and £51,000: £4,000
- businesses with a rateable value of £15,000 or below: £2,667
To provide further support to other businesses, the ARG scheme provides councils with funding they can allocate at their discretion to businesses most in need, such as personal care businesses and supply firms.
Small business minister Paul Scully said: ‘We’re working to get our economy running on all cylinders again so we can focus on making the UK the best place in the world to work and do business, creating jobs along the way.
‘Eligible businesses should apply as soon as possible for the grants available to help them put the pandemic behind them and get on a sounder footing.’
Boris Johnson and Rushi Sunak have pledged to go ahead with the upcoming 1.25% rise in national insurance for employees and employers from April, saying it is a progressive tax
In an article in the Sunday Times, the PM and the Chancellor said that the tax rise is essential as it will provide critical funding to address the NHS backlog.
‘We must clear the Covid backlogs, with our plan for health and social care – and now is the time to stick to that plan. We must go ahead with the health and care levy. It is the right plan,’ they said.
‘It is progressive in the sense that the burden falls most on those who can most afford it. Every single penny of that £39bn will go on these crucial objectives – including 9m more checks, scans and operations, and 50,000 more nurses, as well as boosting social care.’
Johnson and Sunak both stressed that they were in favour of a low tax environment but the pandemic has resulted in a number of tax rises, including the freezing of thresholds for annual allowances until 2026, which will drag more taxpayers into the higher rate of tax.
When the national insurance rise was first announced last September, the majority of Conservative MPs voted for the measure, and did not express any reservations.
Now a number of senior MPs have come out strongly against the rise which will hit employees and employers from April. There is growing concern that the rise, coupled with soaring prices, the energy crisis and high inflation, will hit most households and could stall post-covid recovery.
Business groups including the CBI and Federation of Small Businesses are also concerned that the rises will have a negative impact on business growth.
Federation of Small Businesses chair Mike Cherry said: ‘Rises in employers’ National Insurance will mean some employers having to reduce roles or hours, or curtailing pay rises for many workers, as the Office for Budget Responsibility’s (OBR) analysis shows. This is unfair and the government should change course.’
A CBI spokesperson said: ‘If the government goes ahead as planned then it is incumbent on them to use the March Budget to bring forward more ambitious plans to raise the longer term growth potential of the economy.’