The R3 Technical Team has seen a rise in concerns among members with regard to experiences with VAT returns, tax clearances and other HMRC related matters since Q2 of 2020. To aid R3 members and improve engagement with HMRC, we asked members to report matters of urgency to us, which we would then collate and pass on to our HMRC liaison officer. We are aware that this assistance has helped a number of members resolve a range of issues.

While we acknowledge that the COVID-19 pandemic has affected all businesses and organisations throughout the UK, including HMRC, it is evident across the profession that HMRC’s management of insolvency from a tax perspective continues to create a number of problems for our members. The problems range from being unable to progress insolvency cases to closure to delays in distributions to creditors and the resulting increased costs associated with this. While these are problems for our members, they are ultimately problems for creditors, directors, and other stakeholders, at a time when a smoothly functioning insolvency framework will be increasingly important to the health of the wider economy.

Action

So, what has R3 been doing to address members’ concerns? The team and the R3 VAT Working Group collaborated and produced a firm but balanced letter to HMRC setting out the issues and areas of concern to R3 members, including:

• Turnaround of VAT repayments (VAT 426 and VAT returns)
• Lack of expertise and poor customer service
• Repayment Supplement
• Delays in processing new appointments (VAT 769s and subsequent VAT group restructure)
• Delays in registrations and deregistration
• Customs and Excise Authorisations

To ensure the letter receives the attention it deserves, the letter was sent to a number of senior HMRC officials, including:

• Myrtle Lloyd, HMRC, Director General, Customer Services Group
• Jim Harra, First Permanent Secretary and Chief Executive
• Amanda Callaghan, HMRC, Deputy Director - Operational Excellence, Business Delivery
• Rt Hon Jesse Norman MP, Financial Secretary to the Treasury (the letter is now also being sent to his replacement as Tax Minister, Lucy Frazer QC MP).

Conclusion

While we have not received a formal response at the time of writing, the team is aware that the letter is already having an effect within HMRC, including extra resource being allocated to a number of departments. The Team will keep members updated on developments and continue to meet regularly with HMRC representatives to ensure our members concerns are addressed.

Finally, the Team would like to thank members of R3’s VAT Working Group for their commitment and assistance in producing the letter to HMRC.