Part 1, para 76, Coronavirus Act 2020 states: ‘Her Majesty's Revenue and Customs are to have such functions as the Treasury may direct in relation to coronavirus or coronavirus disease.’

Advisedly this could give the tax authority the potential to have unlimited powers to check records and access taxpayers' information, although lawyers have stressed that the use of the word 'function' mean it is administrative rather than tax collecting related.

The last occasion HMRC tried to gain this type of power was through the direct recovery of debts measure, which gave it the powers to access individuals' bank accounts. These measures were watered down at the time following extreme criticism of the original proposals by the various professional institutes, taxpayer groups representing the vulnerable and LITRG.

HMRC already has extensive powers, recently strengthened further through the Criminal Finances Act and a number of measures, not yet passed but currently out for consultation, include extension of its investigative powers to a 14-year period and plans to give HMRC further powers to force companies to disclose any tax planning that they 'think' might contravene UK tax code.

The measures set out in the 360-page Coronavirus Act 2020 cover a range of issues from tougher policing powers to border control, health service indemnification to forced business closures, and provisions to extend statutory sick pay.

The government was forced to include a clause agreeing to review the Act every six months, down from the original two-year review set out in the draft legislation which was rushed through parliament last week and given Royal Assent on 25 March 2020.

The Coronavirus Act 2020 makes ‘provision in connection with coronavirus; and for connected purposes’. It allows the government to respond to the emergency situation and manage the effects of the covid-19 pandemic. However, there is no clarity on what 'functions' relate to in an HMRC context.

The Act contains temporary measures designed to either amend existing legislative provisions or introduce new statutory powers which are designed to mitigate these impacts.

The measures are only designed to be temporary and relate exclusively to the public health issue surrounding covid-19/coronavirus.

For the government’s perspective this is a public health emergency which requires it to take ‘unprecedented’ measures to protect individuals in the time of the coronavirus crisis, rather than an extension of state powers. It was also the quickest way for the government to shut down perfectly functioning businesses overnight, citing the public health emergency.

Alun Milford, partner in the criminal litigation team at law firm Kingsley Napley LLP said: ‘Any powers created under this Act, and when it was a Bill before parliament, are limited in respect of coronavirus.

‘The nature and purpose of the Act is time limited. It is about the function of HMRC – the function they [government] had in mind was the function of the tax process during furlough. For example, in public policy terms this means not just that the economy could function, but that people that were furloughed could volunteer.

‘These are not powers that are being taken to extend the Revenue’s powers, but to allow the government to respond to the covid-19 emergency.

‘You can draw comfort from the way the business regulations have been written; those forced closures of businesses stating that it was necessary to stop the spread of infection. Otherwise how could you close down perfectly functioning businesses.

‘This is a piece of legislation that is time limited. When they made the regulations, additional brakes were put on so they only apply during the “transmission control period”.’

The Act contains temporary measures designed to either amend existing legislative provisions or introduce new statutory powers which are designed to mitigate these impacts.

So far, only some of the measures announced as part of the government’s emergency covid-19 employment and business support grants and loan package are available in statutory instrument or legislation.

When asked what protections were in place to prevent abuse of the Coronavirus Job Retention Scheme by unscrupulous companies and accountants, HMRC told Accountancy Daily: 'Government will retain the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims.'

Lack of detailed guidance

So far HMRC has produced limited guidance. The Coronavirus Self-Employment Income Scheme guidance was issued on Thursday 27 March, but it is far less detailed than normal HMRC guidance and does not have the depth of examples which are urgently needed to provide clarity on the provisions. Draft legislation on this measure is awaited.

There is still only limited HMRC guidance and no legislation on the Coronavirus Job Retention Scheme which was announced on Friday 20 March.

Many of the measures announced as part of the government’s emergency covid-19 employment and business support grants and loans are still not available in statutory instrument or draft legislation.

When asked about the absense of draft legislation, an HMRC spokesperson told Accountancy Daily that Treasury and HMRC officials ‘are working day and night to finalise the details’.

Draft legislation on the Coronavirus Job Retention Scheme was due to be published by HMRC/Treasury by close of play last Friday but it is still not available.

It is worth noting that the final version of the Coronavirus Act 2020 has not been fully updated on the government’s usual legislation website.

There is a proviso on legislation.gov.uk stating: ‘There are outstanding changes not yet made by the legislation.gov.uk editorial team to Coronavirus Act 2020.

‘Those changes will be listed when you open the content using the Table of Contents below. Any changes that have already been made by the team appear in the content and are referenced with annotations.’

Finance Bill 2020 is still also awaiting final approval. It had been expected to be passed before the end of March. Draft legislation on Finance Bill 2020 is available.  

Key measures already announced by the government covering employment and businesses, and set out in the Coronavirus Act 2020 include:

• enables the secretary of state to make regulations regarding the recovery from HMRC of additional payments of Statutory Sick Pay (SSP) by certain employers for absences related to covid-19; and
• allows government to temporarily modify the existing procedures around introducing national insurance contribution (NIC) changes, in order to respond quickly to the covid-19 outbreak if required,
• removes the statutory requirement for a report from the Government Actuary Department accompany secondary legislation implementing rate changes; and
• provides for the secondary legislation to be subject to the negative procedure in parliament rather than the affirmative procedure. The temporary modifications will last for two years;
• amends existing legislation governing the Courts and Tribunals to enable use of technology either in video/audio-enabled hearings in which one or more participants appear before the court using a live video or audio link, or by a wholly video/audio hearing where there is no physical courtroom and all participants take part in the hearing using telephone or video conferencing facilities.

Report by Sara White

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