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Flooding: Tax Assistance

Volume 694: debated on Thursday 26 July 2007

My right honourable friend the Financial Secretary to the Treasury (Jane Kennedy) has made the following Written Ministerial Statement.

The Government have taken a series of steps to support individuals and communities affected by the recent flooding.

In addition to this, I want to ensure that people affected by flooding do not have to worry about tax and related issues at this difficult time and to make it easy for them to receive their tax credits. Individuals or businesses affected by the flooding should get in touch with HM Revenue and Customs (HMRC), which will be able to provide practical support and advice. For example, HMRC will consider:

suspending collection of taxes and duties, or agreeing instalment arrangements where customers are unable to pay as a result of severe hardship;

practical arrangements where individuals and businesses have lost records in the flooding;

suspending debt collection proceedings; and

deferring and suspending compliance checks and investigations.

HMRC will not charge penalties where it is satisfied that customers have missed deadlines as a result of the flooding. In addition the Government will bring forward legislation in next year's Finance Bill which will allow the Commissioners of HM Revenue and Customs to waive interest and surcharges on tax paid late due to the floods. The Government propose to make this legislation retrospective from the date of this announcement. The Commissioners will exercise their discretionary powers not to collect such interest and surcharges in the interim.

HMRC will also support those who have difficulty sending in their tax credit renewals on time or notifying HMRC of any change in circumstances. Individuals affected by the floods should contact HMRC which will take steps to ensure that tax credits continue to be paid at the right level.