HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Monday, 15 June 2020

HMRC's 100% Tax Rate

The Government is to give HMRC draconian new powers in an attempt to claw back hundreds of millions in falsely claimed furlough and Covid-19 business grant payments.

Rishi Sunak will add legislation to the Finance Bill next week that will allow HMRC to go after those who broke coronavirus support payment rules.

HMRC is expected to focus on a number of high-profile companies that it believes may have asked staff to work despite taking the 80 per cent furlough payments from the Treasury’s Job Retention Scheme (JRS).

If HMRC suspects a company has broken the rules of the JRS scheme, which do not allow furloughed staff to work while receiving up to £2,500 a month to stay at home, it will impose a 100 per cent tax rate on the payments.

The Treasury’s decision to take the unusual step of effectively introducing a new tax band has been made to ensure HMRC can use existing powers to prosecute businesses that fail to pay tax demands from Covid-19 payments that it believes were misused, obtained incorrectly or not necessary.

HMRC will also be handed powers to target beneficiaries of the Self-Employment Income Support Scheme (SEISS) and small companies that received grants of up to £25,000 to help them through the crisis. If HMRC suspects a business did not actually require a loan, or that a sole trader ceased trading soon after receiving money from the SEISS scheme, it will be able to put the burden on those investigated to prove otherwise.

The draft legislation to hand HMRC the tough powers will be added to the Finance Bill, which is currently making its way through Parliament and is expected to receive Royal Assent from the Queen by the middle of next month.

Once passed any business or individual that has received cash from the JRS or SEISS schemes, which are due to come to an end on 31 October, will have 30 days to self-declare a mistaken application and pay the furlough cash or loan back without penalty.

If, however, HMRC decides an undeclared mistake has been made after considering filed accounts for the last financial year and the current one, it will launch an investigation and force those accused to show they did not break any Covid-19 support payment rules.

Ultimately, a failure to pay 100 per cent to cash back to HMRC could result in criminal prosecution.

A spokesman for HMRC is quoted by inews:

“HMRC can already refuse to pay claims that they think are fraudulent or abusive, but these measures will ensure we can properly investigate and recover overpayments and penalise deliberate abuse of the schemes.”

Tax does have to be taxing.

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  1. Good. Over 1800 reports of companies abusing the Furlough system have been reported, and should be investigated NOW. HMRC have an investigation arm that in the main are working from home. Get them out and about to check on these businesses now. And they should be prosecuted, not just given penalties. The only reason for this is greed. I know many businesses that closed and will struggle to get back to normal, yet thieving, cheating businesses are taking money out of my pocket. Greedy, greedy greedy.

  2. Off-topic but just to say that the well-known fraudsters pretending to be 'HMRC' are still active. Yesterday, I received a call from 0151 965 3711 and spoke with a female who, after some hesitation, identified herself as "Officer Jennifer Stones" and said that there is "a warrant out for your arrest".

    After asking this scumbag various questions, and informing her that she is a criminal, she terminated the call. No idea why...

    01519653711 appears to be just one of several numbers these scammers are hiding behind: beware.

  3. This isn't introducing a new 100% tax band at all.
    It's getting firms to repay grants that were fraudulently claimed for.
    Big difference.