The miseries experienced by people affected by the severe flooding in parts of the UK will not be compounded by demands for interest and surcharges.

The Chancellor of the Exchequer has announced that next year's Finance Bill will contain measures, retrospective to 26 July, to remove the exposure to any interest and surcharges arising from compliance delays caused by the floodwater.

HMRC will be able to:

• defer collection of taxes and duties, or agreeing instalment arrangements where customers are unable to pay as a result of severe hardship;
• waive interest, surcharges and penalties for the period during which collection of tax or duty is deferred;
• introduce practical arrangements where individuals and businesses have lost records in the flooding;
• suspend debt collection proceedings;
• defer compliance checks and investigations.

HMRC will not charge penalties where they are satisfied that customers have missed deadlines as a result of the flooding.