HMRC is coming in for criticism over the decision not to further pause Loan Charge compliance activity for contractors affected by the issue, despite the ongoing COVID-19 crisis.

A request had been made to put a hold on the letters demanding a response within 30 days that HMRC has been sending to contract workers, in recognition of the fact that contractors are struggling with the fallout of the virus and lockdown. However, the organisation has declined to do this, citing a couple of reasons for its decision.

According to the All-Party Parliamentary Group (APPG) set up to investigate HMRC’s handling of the issue, the department has told them that the “expiry of a statutory time limit” that will arrive soon would create the possibility of not being legally able to pursue individuals for tax owed if it agreed to the pause.

The second argument made by HMRC is that only those contractors who have provided details that could enable a settlement to be reached will receive the letters. Penny Ciniewicz, its customer compliance director, stated that those who have supplied information to clarify their position concerning Disguised Remuneration schemes up to April 5th last year will be able to resolve the issue, and potentially avoid Loan Charge payments.

However, a spokesman for the action group against the Loan Charge responded that this proved HMRC was still pursuing people.

There is little doubt that it is causing additional stress to many contractors, who are looking to accounting services in South Yorkshire and elsewhere for help.