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High rainfall and flooding precipitates change in tax legislation

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2nd Aug 2007
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Recent flooding has disrupted many businesses and taxpayers alike, and in some cases this means that tax returns and payments have been made late.

In general, one can avoid tax penalties and interest if you have a reasonable excuse to prove that you were prevented from fulfilling your obligations under the taxes acts. The problem is often that the description of what is and what is not a “reasonable excuse” can vary from case to case, and it can be very time consuming examining the facts. In view of the knock on effects of the wettest summer on record and resulting flooding, the Treasury has made the following announcement:

"The Government will bring forward retrospective legislation in next year's Finance Bill to allow HMRC to waive interest and surcharges on tax paid late due to the floods."

It is also noted that the Commissioners will exercise their (normal) discretionary power not to collect such interest and surcharges in the interim.

In addition, HMRC will also be able to:

    ,
  • defer collection of taxes and duties or agree installment arrangements where customers are unable to pay as a result of severe hardship.
  • introduce practical arrangements where individuals and businesses have lost records in the flooding
  • suspend debt collection proceedings
  • defer compliance checks and investigations
  • not charge penalties where we are satisfied that customers have missed deadlines as a result of the flooding

HMRC has set up a new Helpline for anyone affected by the recent floods which will enable anyone affected by the flooding to get fast, practical help and advice on a wide range of tax problems they may be facing. Telephone: 0845 3000 157

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