The government has already unveiled an unprecedented package of support to assist businesses and individuals through the coronavirus crisis.
For individuals and businesses that were already struggling with debt problems before the coronavirus outbreak, HMRC has confirmed that it will be providing some additional relief.
Where individuals, companies and partnerships as a result of the coronavirus outbreak are having trouble meeting VA contributions, whether it be in an IVA or CVA, HMRC is encouraging insolvency practitioners (IPs) to exercise maximum discretion and only consult with creditors where it is essential.
The tax authority also confirmed that it will support a minimum three-month deferral of VA contributions and IPs do not need to contact HMRC to approve the deferral.
In addition, any tax deferrals offered under the government coronavirus business support package (such as VAT or self-assessment income tax deferrals) will not be considered a breach of VA.
Suspending enforcement activity
HMRC also confirmed that it would be suspending some of its enforcement activity during the period. In practice, this means that HMRC will not petition for bankruptcy or winding up orders unless it is deemed essential (such as in cases of fraud or criminal activity).
The tax authority also confirmed that it would be suspending face to face visits with customers for the immediate future, in line with social distancing protocols.
Individuals and companies that are struggling with debts will still be able to apply for new company voluntary arrangements (CVAs), individual voluntary arrangements (IVAs), administrations and other types of insolvency solutions during this time and HMRC will continue dealing with new cases.
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency, said: “Individuals and businesses with IVAs and CVAs that have also been negatively affected by the coronavirus will have been worried about how they would keep up with repayments.
“While this announcement from HMRC isn’t a silver bullet, it will benefit many people. To understand how it will affect your situation, speak to a member of the team today.”
Are you struggling as a result of the coronavirus crisis? Speak to an expert today about personal and company insolvency solutions. Call: 01625 544 677.