THE BELOW UPDATE FROM HMRC WAS SENT ON 09/07/20
This HM Revenue and Customs (HMRC) Parliamentary Digest provides an update on yesterday’s announcement on the Government’s ‘Plans for Jobs 2020’, as well as other Coronavirus policy measures. It also covers a summary of summary of our 2020 Tax Gap report which has been published today. We want to ensure everyone knows about the support available and any updates to our programmes so we’d be grateful if you could share these messages with your constituents.
The government has set up a dedicated support page where businesses can find the right support, advice and information to help with the impact of Coronavirus.
- Measuring the Tax Gap 2020
- Eat Out to Help Out – guidance published
- VAT announcements – guidance published
- Jobs Retention Bonus – guidance published
- CJRS – updated key dates
- Latest CJRS and SEISS stats published
- Coronavirus tests – tax update
Measuring the Tax Gap – 2020 report
HMRC has published its ‘Measuring Tax Gaps: 2020 edition’ report, which confirms the tax gap for 2018-2019. The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid. The full report is now available on GOV.UK
With the tax gap estimated at 4.7%, or £31 billion in cash terms, the report shows that HMRC collected 95.3% of all the tax due under the law in 2018-19. There is a long-term downward trend in the tax gap, falling from 7.5% in 2005-06 to 4.7% in 2018-19, its lowest percentage rate.
We have also included a stand-alone estimate of the wealthy tax gap for the first time in the report. We wanted to be more transparent in our approach to wealthy taxpayers and to enhance and improve our understanding of wealthy non-compliance, this is a complex area and we have worked hard to develop sound methods to help us to do this.
The Tax Gap figures also show that while the majority of our customers want to get their tax right, too many are still finding this hard, with avoidable mistakes costing the Exchequer over £8.5 bn in lost revenue in 2018-19.
This underlines the importance of the action HMRC has been taking with the launch of Making Tax Digital (MTD) in April 2019. MTD seeks to reduce the tax gap caused by avoidable mistakes and over 1.4 million businesses have now joined. Under MTD businesses with a taxable turnover above the VAT threshold are required to use digital record keeping tools and submit their VAT return data direct from those records using MTD-compatible software. This helps them reduce errors and enables them to see, close to real time, the health of their finances.
We are the only revenue authority in the world that measures and publishes the tax gap, covering both direct and indirect taxes, every year. We publish the tax gap because we believe it’s important to be transparent in our work.
Tax gap calculations are a complex series of measurements and estimates are subject to revision. This is due to the continued availability of more up-to-date data and improvements to the analysis. The estimates are produced in accordance with the Code of Practice for Official Statistics, which assures objectivity and integrity.
At 4.7%, the tax gap is the lowest that it’s been and is the result of HMRC’s sustained efforts to support the overall health of the tax system and make it as easy as possible for customers to pay the right tax at the right time.
Eat out to Help Out – guidance published
Yesterday, the Chancellor announced the Eat Out to Help Out Scheme.
During August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered.
Guidance for businesses in your constituency who wish to register for the scheme is available on GOV.UK.
More information about the scheme is also available on GOV.UK
VAT announcements – guidance published
The Chancellor has also announced a reduced rate of VAT for hospitality, accommodation and attractions.
We’ve published a Revenue and Customs Brief and associated VAT Notice for this measure.
Job Retention Bonus – guidance published
Yesterday the Chancellor also announced the introduction of the Jobs Retention Bonus.
This is a one-off payment of £1,000 to employers in your constituency that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
- have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
- have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
Your constituents can now read more about the scheme on GOV.UK
CJRS – key dates
We would like to make you aware of some key dates on the CJRS scheme that might affect your constituents:
Claiming for employees furloughed on or before 30 June
Employers in your constituency need to claim by 31 July for employees furloughed through the Coronavirus Job Retention Scheme (CJRS) for periods ending on or before 30 June.
Get ready for changes from 1 August
Employers will no longer be able to use a CJRS grant to cover National Insurance (NI) and pension contributions for furloughed employees from 1 August. Employers in your constituency can submit August claims in advance, from 20 July.
Working out claims
Employers in your constituency can use our online examples and calculator to help work out what they can claim, for claims ending on or before 31 July. From 10 July they will also be able to use these to help them work out claims ending on or before 31 August.
Guidance for employers who have made a mistake on their claim
Employers in your constituency can now delete a claim online within 72 hours of submitting it. Search ‘claim for wages through Coronavirus Job Retention Scheme’ on GOV.UK.
Calls to customers
We are contacting selected employers to discuss their claims. These calls will be to check they haven’t made any mistakes and to help make sure they’re claiming the correct amount.
Further support for your constituents
Live webinars on changes to the scheme and how they impact your constituents are available to book online on GOV.UK. We are asking people to please leave our phone lines open for those who need them most.
Protect your constituents from scams
Please remind your constituents to stay vigilant about scams which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to firstname.lastname@example.org and texts to 60599.
Latest CJRS and SEISS stats published
HMRC publish data about the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme, and the VAT payments deferral scheme. on GOV.UK.
As of midnight on 5 July, 1.1 million employers had furloughed 9.4m jobs through the Coronavirus Job Retention Scheme. The total value of claims made is £27.4 billion.
As of midnight on 5 July, 2.7 million people have made a claim through the Self-Employment Income Support Scheme. The total value of claims made is £7.7 billion.
Coronavirus Tests – tax update
Coronavirus tests provided by the government, as part of its national testing scheme, are not treated as a benefit in kind for tax purposes.
This means that if businesses in your constituency employ healthcare workers – and other eligible front-line staff who receive a test through this programme – there is no tax due and they do not need to report a benefit to HMRC.
More information on the national testing scheme can be found on GOV.UK
If employers in your constituency provide testing kits to their employees, outside of the government’s national testing scheme, either directly or by purchasing tests that are carried out by a third party, no Income Tax or Class 1A National Insurance will be due.
The Government is legislating for this through regulations, and guidance will be updated shortly.