Ministers have ordered the taxman to soften its revenue-raising zeal in the event of a no-deal Brexit, saying the priority must instead be providing support to cash-squeezed small businesses.
Sky News understands that Michael Gove, the cabinet minister in charge of no-deal planning, told business groups on Thursday that HM Revenue & Customs (HMRC) had been instructed to find ways of assisting SMEs through a potentially difficult period.
That did not mean that HMRC would cease normal tax-collecting actions, Mr Gove said, but that it should prioritise measures to ease the burden on SMEs facing financial strain.
Mr Gove is understood to have raised the idea of creating a WhatsApp group between business leaders and the government to collaborate more closely on no-deal preparations.
He was joined at the meeting by the business minister Jo Johnson and Sir Edward Lister, the prime minister’s chief of staff.
Among the business organisations present were the CBI, institute of Directors, Association of British Insurers and the British Retail Consortium.
The chief executive of the Investment Association is said to have pitched the idea of 1 November being designated a bank holiday in order to alleviate any disruption to financial markets from a no-deal Brexit.
Mr Gove responded by saying it would be considered, but Whitehall sources said on Thursday evening that it was “not going to happen”.
The prospect of the UK leaving the EU without a deal on October 31 has grown significantly since Boris Johnson became prime minister, raising deep anxiety among business leaders about the public and private sectors’ apparent lack of preparedness.
Sky News’ business correspondent Paul Kelso revealed this week that two-thirds of UK exporters had yet to register for documentation critical to their ability to continue to trade with the EU after a no-deal departure.
Sources said that Mr Gove revealed during Thursday’s meeting that HMRC had been ordered to send the required forms to all 240,000 relevant companies, regardless of whether or not they had applied.
One source who attended the talks said it had been suggested that the government would make an announcement next week on the emergency tariff regime that had been drawn up before the earlier Brexit date in March.
Mr Gove told bosses that while many of them were opposed to leaving without a deal, the government was committed to ensuring that appropriate planning was being put in place.
“There was a lot that the previous government could have done but chose not to,” said one Whitehall source.
“We won’t stand by and let that continue.”
Among the other ideas discussed at the meeting were the possibility og VAT and national insurance contribution holidays for SMEs; a relaxation of lending criteria by the major banks; government assistance to businesses with their communications campaigns; and easing the regulatory burden on businesses by suspending the implementation of new rules.
Other business groups which joined the meeting with Mr Gove were the Creative Industries Federation, the Food and Drink Federation, Make UK, Tech UK, UK Finance and UK Hospitality.