The coronavirus outbreak has created unprecedented uncertainty around the world and now requires unprecedented measures to protect the economy and HMRC should immediately pause tax collections, says Alex Altmann a partner at leading accounting and tax advisory firm Blick Rothenberg.
He added: “Supply and demand are the core principles of a working economy, which are now heavily disrupted by Governments responses globally to tackle the crisis. The announcement by the UK Government to provide £330bn in loan guarantees will play an essential part of a long-term rescue package, but no one knows today how this money will get out of the door. What we need now are quick and direct cash injections into the economy.”
Altmann said: “The Government’s announcement for a 12-months business rate holiday is a first step. However, businesses pay large amounts of VAT, PAYE and Corporation tax on a regular basis as well. Pausing tax collections now is existential for businesses to maintain their liquidity and provides the necessary relief to pay workers and keep the business running.”
“At this stage it does not make sense to collect large amounts of taxes from businesses, which are often based on assessments and assumptions made earlier in the tax year. If the Government wants to achieve a fast and unbureaucratic way to keep businesses liquid, it should follow the measures introduced by other European Governments this week and pause the collection of direct taxes, like Corporation Tax or PAYE, for the foreseeable future”.
Altmann added: “For example, the German Government announced on Tuesday, with an unprecedented package of measures, that it would pause any tax collections on application and provide for fast-track tax refund processing. We need to help businesses in the same way as otherwise they will run out of cash very quickly, which risks losing hundreds of thousands, if not millions, of jobs”.