HMRC update – coronavirus grants and self-assessment returns

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After a difficult year, HMRC is encouraging the early filing of self-assessment returns.

It also reminds companies that tax is due on coronavirus grants.

Declaring coronavirus grants on company tax returns

Coronavirus grants to support businesses during the pandemic are taxable.

If a business needs to complete a company tax return (CT600) and has claimed grants from the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out (EOHO), or any payments made by local authorities and devolved administrations, they’ll need to report this as income when they calculate their taxable profits.

Additionally, if a business received a CJRS grant, they will also need:

  • to declare the amount they received (box 471)
  • the grant they were entitled to (box 472) 
  • and any CJRS overpayment already assessed or voluntarily disclosed (box 473) during the accounting period covered by their CT600 return.

They will need to complete box 474 if they received any EOHO overpayments.

They must also include the grants as income when they calculate their taxable profits.    

These boxes were added to the online CT600 on 6 April 2021, so if a business filed before 6 April 2021, they would have been unable to declare this online.      

If a business submitted a CT600 return without boxes 471-474 and 526, or left the boxes incomplete, and they have a CJRS or EOHO overpayment to report they should resubmit the return.      

If all coronavirus support overpayments are already repaid or have already been assessed before the tax return is filed – and there’s no coronavirus support schemes overpayment due – they do not have to correct the return.    

Self-Assessment – Covid-19 support grants

HMRC has already seen thousands of people filing their returns early – more than 63,500 customers filed their tax return on 6 April, the first day of the tax year. After a difficult year, beating the rush and avoiding the panic will be especially helpful.

This year Self Assessment customers must declare if they received grants or payments from COVID-19 support schemes up to 5 April 2021 as these are taxable.

This includes grants or payments from:

  • the Self-Employment Income Support Scheme (SEISS)
  • the Coronavirus Job Retention Scheme (CJRS)
  • other Covid-19 grants and support payments such as self-isolation payments, local authority grants and Eat Out to Help Out.

For more information about which Covid-19 grants or support payments need to be included in tax returns, Self Assessment customers can visit: reporting coronavirus (COVID-19) grants and support payments on GOV.UK for more information.

HMRC recommends customers start gathering the necessary information together now to make sure there’s enough time to check it is correct and to avoid delays.

Plastic Packaging Tax: technical consultation, updated guidance and webinars

Plastic Packaging Tax (PPT) will be introduced in the UK from April 2022 and we would be grateful for your help in sharing HMRC’s recently updated GOV.UK guidance with businesses that manufactures or imports plastic packaging. The latest update provides information on what businesses need to include on a tax return for PPT, and what other substances need to be considered for multi material packaging. We will provide a further update after more information has been added to the updated guidance.

You may also be aware, that the first HMRC Get Ready for Plastic Packaging Tax webinars took place last month. Recordings of both the ‘Introduction to Plastic Packaging Tax’ and ‘Plastic Packaging Tax – Administration and technical aspects’ sessions are now available to view on GOV.UK.

Building on the secondary legislation published in draft earlier this year, HMRC has also recently published further draft secondary legislation for Plastic Packaging Tax (PPT) for technical consultation. The Government welcomes feedback on whether the further draft secondary legislation works as intended. The technical consultation runs until 11:45pm on 1 December 2021. Please provide any comments to [email protected].

HMRC warns customers about Self-Assessment tricksters

More than 4 million emails and SMS will be issued this week to Self-Assessment customers reminding them about the 31 January deadline. As these go out, HMRC is warning customers to not be taken in by malicious emails, phone calls or texts, mistaking them for genuine HMRC communications.

Criminals often mimic government messages to trick their victims into handing over money or personal and financial information.

To help HMRC fight these crimes, people can report suspicious phone calls on GOV.UK, and forward suspicious emails to [email protected] and texts to 60599.

HMRC is also reminding Self-Assessment customers to check websites and online forms before using them to complete their 2020/21 tax return. People can be taken in by misleading sites designed to make them pay for help in submitting tax returns or charging to connect them to HMRC phone lines. Customers should visit GOV.UK for more information about Self-Assessment and use the free, signposted tax return forms.

More information can be found on GOV.UK.

Tax Administration and Maintenance Day

The Government will publish a Tax Administration and Maintenance Command Paper on 30 November. The Paper will outline the further steps it is taking to progress tax simplification, tackle non-compliance and ensure our tax system is fit for the modern world. It follows a similar set of announcements published on 23 March in ‘Tax policies and consultations (Spring 2021)’.

Working Tax Credit – reporting changes to working hours   

During the pandemic, Working Tax Credit (WTC) customers haven’t needed to tell us about any temporary reductions to their working hours as a result of COVID-19. This was one of several measures we introduced to help those facing uncertainty.   

We’re reminding WTC customers that this measure ended on 30 September 2021.  

If they don’t intend to go back to working enough hours to be entitled to WTC by 25 November, they must tell us as soon as possible. Customers can check their current claim details and how many hours they need to work on GOV.UK.

After 25 November, if they are still not back to working enough hours to be entitled to WTC, they must tell us within one month.   

Customers should still continue to tell us about any permanent changes to their circumstances, for example if they’re made redundant, lose their job, or their hours change permanently.   

If a customer has a change in their working hours which makes them no longer eligible, they will continue to receive WTC for four weeks before their claim ends. 

Any changes can be easily reported online on GOV.UK.

If customers receive tax credits they’re not entitled to as a result of a change, they may need to repay this money, and may also have to pay a penalty if they don’t let us know within one month of their change.  

Time is running out for customers with Post Office card accounts

From 1 December 2021, HMRC will stop making tax credits, Child Benefit and Guardian’s Allowance payments to Post Office card accounts. HMRC is urging account holders to contact them to update their bank account details to continue receiving payments without disruption.

Customers can choose to receive their benefits and credits payments to a bank, building society or credit union account. If they already have an alternative account, they can contact HMRC now to update their details.

Child Benefit and Guardian’s Allowance customers can use their Personal Tax Account to provide revised account details, change their bank account details via GOV.UK or by contacting the Child Benefit helpline on 0300 200 3100. Tax credits customers can change their bank account details by contacting the tax credits helpline on 0345 300 3900. If customers cannot open a bank account, they should contact HMRC.

More information can be found on GOV.UK.

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.

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