Following the damage created by Storm Desmond in Cumbria last weekend, HMRC has set up a dedicated telephone helpline for anyone affected by severe weather and flooding, but is facing calls for wider action to counter the effects of storm damage, loss of power and flooding, while business rates and council tax charges for flooded businesses will be suspended for three months
The helpline will provide individuals whose home or businesses have been affected with help and advice on any tax problems they may be facing.
HMRC says it will agree instalment arrangements where taxpayers are unable to pay as a result of the floods, and is also promising to adopt a practical approach when individuals and businesses have lost vital records to the floods.
In addition, the tax authorities are to suspend debt collection proceedings for those affected by the floods and will cancel penalties when the taxpayer has missed statutory deadlines.
ICAEW is calling on the government to take more action, saying it should offer extensions to filing deadlines to help businesses affected by flooding get back on their feet.
Peter Hollis, chair of the ICAEW practice committee, said: ‘Government should be doing all they can to help by automatically extending filing deadlines for businesses in affected postcodes, rather than on a case-by-case basis. This will make a major difference to those businesses who will need to file VAT, self-assessment and income and corporation tax returns in the next three months.’
ICAEW wants to see businesses in the worst affected areas given an extra three months to file VAT, income tax and corporation tax returns and pay the associated tax without penalties arising.
The institute also says the government should fund local authorities to suspend collection of business rates for three months while businesses get back in their feet and provide guarantees to banks to enable assistance to affected businesses on a case by case basis.
Additional measures proposed by the firm include a cut in the VAT charged on house repairs to 5% for homes which have been damaged; and a reduction or exemption from Stamp Duty Land Tax (SDLT) on the sale of these properties for the next few years.
HMRC’s storm and flood helpline is in addition to other HMRC telephone contact numbers. The helpline is 0800 904 7900. Opening hours are Monday to Friday, 8am to 8pm; Saturday and Sunday, 8am to 4pm, excluding bank holidays.
Details of flood support schemes are here
ICAEW has updated advice for businesses affected by flooding here
The ATT is calling on the government to extend the eligibility criteria for tax relief on contributions to flood defence projects, which currently only apply to businesses. It argues that the relief should allow individual taxpayers to make contributions on a similarly tax-efficient basis. This might be done in a similar way to Gift Aid or payroll giving.
Paul Hill, chairman of ATT’s technical steering group said: ‘We see no reason why less value should be attributed to contributions from private individuals than to those from businesses. On that basis, tax relief should be equally available on all contributions regardless of the source.’