HMRC updates and guidance – October 2020

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HMRC has published an extensive set of updates following the launch of the Job Support Scheme, extensions to other Covid-19 support schemes, and preparations for leaving the EU single market.

Job Support Scheme (JSS)

The Government recently announced the Job Support Scheme (JSS) to protect jobs where businesses remain open but are facing lower demand over the winter months due to COVID-19.

Under JSS the Government will contribute towards the wages of employees if they are working fewer than normal hours due to decreased demand. Employers will continue to pay the wages for the hours their staff work. Employees must work at least 33% of their usual hours. For the hours not worked, employers and the Government will pay a third each of their usual wages (the Government contribution is capped at £697.92 per month).

Expansion of Job Support Scheme 

The Government today (9 October) announced an expansion of the JSS, to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.

Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one or more of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.

The Government will pay two-thirds of employees’ usual wages, up to a maximum of £2,100 per month. Employers will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.

Employers can apply for the JSS, including the new expansion, even if they haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1 November, with payment of grants in arrears from early December. The scheme will be reviewed in January.

A factsheet explaining the changes in more detail can be found on GOV.UK. Further information will be published in the coming weeks.

Job Retention Bonus – guidance now live

Further guidance for the Job Retention Bonus is now available. It includes information about how employers can check if their employees are eligible and when they can claim the bonus.

Employers will be able to claim a one-off payment of £1,000 for every eligible employee they have furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS) and kept continuously employed until at least 31 January 2021. Employers do not have to pay this money to their employee.

To be eligible, employees must earn at least £1,560 between 6 November 2020 and 5 February 2021 and have received earnings in the November, December and January tax months. Employees must also not be serving a contractual or statutory notice period on 31 January 2021.

Employers will be able to claim the bonus from 15 February until 31 March, once they have submitted PAYE information for the period up to 5 February 2021. We’ll let you know how employers can make a claim when further guidance is published by the end of January.

Employers can still claim the Job Retention Bonus if they make a claim for the same employees through the Job Support Scheme, as long as they meet the eligibility criteria for both.

Further information can be found on GOV.UK by searching ‘Job Retention Bonus Guidance’.

What employers need to do now:

If employers intend to claim the Job Retention Bonus, they must:

  • keep PAYE submissions up-to-date and on time, with Real Time Information (RTI) reporting for all employees, including reporting the leaving date for any employees that stop working for them in the month they leave or the next Full Payment Submission
  • use the irregular payment pattern indicator in RTI for any employees not paid regularly
  • provide any employee data for past CJRS claims that HMRC has requested
  • make sure all their CJRS claims have been accurately submitted and they have told us about any changes needed (for example if they’ve received too much or too little).

Coronavirus Job Retention Scheme – changes from 1 October 

From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work. 

Employers will continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves. 

The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). Employers must still pay their employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours, employers need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.

Employers will also continue to pay their furloughed employees’ National Insurance and pension contributions from their own funds. 

The scheme closes on 31 October and employers will need to make any final claims on or before 30 November. Employers will not be able to submit or add to any claims after 30 November.

If employers have claimed too much in error

It’s important that employers continue to check each claim is accurate before submitting it, and we would also recommend checking previous claims so they can avoid any penalties for claiming too much.

If employers have claimed too much CJRS grant and have not repaid it, they must notify us and repay the money by the latest of whichever date applies below:

  • 90 days from receiving the CJRS money they’re not entitled to
  • 90 days from the point circumstances changed so that they were no longer entitled to keep the CJRS grant
  • 20 October 2020, if on or before 22 July they received CJRS money they were not entitled to, or if their circumstances changed.

If employers do not do this, they may have to pay interest and a penalty as well as repaying the excess CJRS grant. For more information on interest search ‘Interest rates for late and early payments’ on GOV.UK.

How employers can let HMRC know if they claimed too much

Employers can let us know as part of their next online claim without needing to call us. If employers claimed too much but do not plan to submit further claims, they can let us know and make a repayment online through the new card payment service – go to ‘Pay Coronavirus Job Retention Scheme grants back’ on GOV.UK.

Further support

Guidance and live webinars offering more support on changes to CJRS and how they impact employers are available to book online – go to GOV.UK and search ‘help and support if your business is affected by coronavirus’.

HMRC phone lines and webchat remain very busy, so the quickest way to find support is on GOV.UK. This will leave their phone lines and webchat service open for those who need them most.

VAT Deferral New Payment Scheme 

If an individual or business deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 3‌‌‌1 March 2021. They can use the VAT Deferral New Payment Scheme to spread these payments over equal instalments up to 31 March‌‌‌ 2022. Alternatively, they can make payments as normal by 3‌‌‌1 March 2021, or make Time To Pay arrangements with HMRC if they need more tailored support.

More information on the VAT Deferral New Payment Scheme will be available on GOV.UK in the coming months.

A reminder about closure of the SEISS 2 Grant

Applications for the second Self-Employment Income Support Scheme (SEISS) grant close on 19 October 2020.

Anyone who thinks they are eligible for the grant and has not yet claimed must do so by 19 October. It is quick and easy to apply on GOV.UK. Anyone who needs extra support can make their claim over the phone.

Grants paid under SEISS count as taxable income. Anyone who has received a SEISS grant will need to enter the amount they received on their Self-Assessment return for tax year 2020 to 2021 to ensure they pay the correct income tax and national insurance contributions.

Parents who were previously ineligible for SEISS because their trading profits for the 2018 to 2019 tax year were affected by taking time out of their trade to care for a new child, may now be eligible.

Parents who think they may be entitled to a SEISS grant, had until 5 October to provide information to HMRC to verify the birth/adoption of their new child. HMRC will confirm if their information has been verified and they are eligible to make a claim for a grant. Any parent who believes they may be eligible and has missed the 5 October should contact HMRC.

The Government has recently announced an extension to the SEISS grant scheme. You don’t need to contact HMRC about this. HMRC will provide more details in due course.

Claim tax relief for working from home

More than 54,800 customers have claimed tax relief for working from home via HMRC’s new online portal.

Launched on 1 October 2020, the online portal is simple to use and has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of coronavirus (COVID-19).

Click here for more information.

Border Operating Model Published 

As part of preparations for the end of the transition period, the Government has published an updated Border Operating Model, which provides further detail on how the GB-EU border will work and the actions that traders, hauliers and passengers need to take. 

The updated guidance follows extensive engagement with the border industry and the £705m package of investment for border infrastructure, jobs and technology, announced earlier this year.  

This publication gives traders further information on the changes and opportunities they need to prepare for as a result of us leaving the EU Single Market and Customs Union. These steps will be needed regardless of whether we reach a trade agreement with the EU. 

The updated GB-EU Border Operating Model: 

  • Maps out the intended locations of inland border infrastructure. The sites will provide the necessary additional capacity to carry out checks on freight;
  • Announces that passports will be required for entry into the UK from October 2021 as the Government phases out the use of EU, EEA and Swiss national identity cards as a valid travel document for entry to the UK. Identity cards are among the least secure documents seen at the border and ending their use will strengthen our security as the UK takes back control of its borders at the end of the Transition Period;
  • Confirms, after extensive engagement with industry, that a Kent Access Permit will be mandatory for HGVs using the short strait channel crossings in Kent. The easy-to-use ‘Check an HGV’ service will allow hauliers to check if they have the correct customs documentation and obtain a Kent Access Permit. 

In a further move to support the customs intermediaries sector, the Government is also announcing that it will exercise an exemption within EU state aid rules to increase the amount of support that businesses can access from the Customs Grant Scheme. To date, the Government has provided more than £80m in funding to support the customs intermediary sector with training, new IT and recruitment.  

Daily penalties for Self-Assessment 2018-19 Tax returns

HMRC has taken the decision not to charge individuals and businesses daily penalties where someone has been late in filing their 2018-19 Self-Assessment Tax return. This is in recognition of the exceptionally difficult circumstances many taxpayers have faced due to the impact of the COVID-19 pandemic, during the period when the daily penalties accrued. 

The mandatory 6-month and 12-monthly penalties will apply for 2018-19 tax returns as normal and HMRC continue to require customers to file their returns where they are able to. HMRC will consider coronavirus as a reasonable excuse for missing return deadlines. 

HMRC will keep all our operational decisions under constant review.  

HMRC also want to let you know that HMRC can agree time to pay arrangements with any businesses that cannot pay their tax because of COVID-19. HMRC agree these on a case-by-case basis and tailor them to meet their circumstances. We’ve set up a dedicated helpline for dealing with time to pay arrangements. If businesses need help or want to talk about their options, they can phone us on 0800 024 1222. More information on this can be found on GOV.UK.

Self Assessment customers to benefit from enhanced payment plans

Self Assessment customers can now apply online for additional support to help spread the cost of their tax bill into monthly payments, without the need to call HMRC.

The online payment plan service can already be used to set up instalment arrangements for paying tax liabilities up to £10,000. From 1 October 2020, HMRC has increased the threshold to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic.

The increased self-serve time to pay limit of £30,000 follows the Chancellor of the Exchequer’s announcement on 24 September to increase support for businesses and individuals through the uncertain months ahead.

Customers who wish to set up their own self-serve time to pay arrangements must meet the following requirements:

  • they need to have no:
    • outstanding tax returns
    • other tax debts
    • other HMRC payment plans set up
  • the debt needs to be between £32 and £30,000
  • the payment plan needs to be set up no later than 60 days after the due date of a debt.

Customers using self-serve Time to Pay will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

Students warned about tax scams

Students starting at university are being warned by HMRC that they could be targeted by a fresh wave of tax scams.

With universities blending online and face to face tuition this year, and an increase in remote working due to the pandemic, students could be left exposed to the work of fraudsters. Freshers might also be more vulnerable because of their limited experience of the tax system.

To highlight the risk, HMRC is writing to Vice Chancellors, asking them to help ensure students know how to spot a tax scam. Read more on GOV.UK.

Criminals are also taking advantage of the measures announced by the Government to support people and businesses affected by coronavirus. They text or email taxpayers offering spurious financial support as a way of harvesting their personal and financial details.

People are encouraged to forward suspicious emails claiming to be from HMRC to [email protected] and texts to 60599.

Changes to our opening hours

At the start of the pandemic HMRC reduced our phone helpline opening hours to 8am – 4pm, to offer customers the best service HMRC could at the times they needed us the most.

We’ve reviewed the situation regularly, monitoring when our customers are contacting us, and are now extending the opening hours for most of our helplines to 8am – 6pm. As part of this we’re also changing our webchat opening hours. We’re no longer offering webchat after 8pm or on Sundays, so HMRC can make more advisers available when customers need us most.

There will be a few exceptions to this, so please check GOV.UK for more information about our helplines and their opening hours.

VOA Rental Information Campaign

The Valuation Office Agency (VOA) is now contacting businesses to request rental information to support the next revaluation of business rates in England and Wales – Revaluation 2023.

When businesses receive the letter, they should go online and use the reference number provided to submit your up-to-date details. It is important to provide this information to ensure business rates are accurate.

The coronavirus outbreak significantly affected many businesses. This is an opportunity to make sure any changes are reflected in the details the VOA holds.

At revaluation, the VOA adjusts the rateable value of business properties to reflect changes in the property market. To make sure every business is treated fairly, all rateable values are based on the open market rental value at a certain date. For Revaluation 2023, this date is 1 April 2021.

Businesses may not receive the letter immediately, but they should look out for it and provide information as soon as they are able.

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

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