This below update was sent to MPs by HMRC on 25th January:
Self-Employment Income Support Scheme (SEISS)
The deadline for claiming the third SEISS grant is fast approaching. Eligible customers in your constituency must make their claim on or before 29 January 2021.
As with the first and second SEISS grants, the third grant will be subject to Income Tax and self-employed National Insurance and must also be reported on their 2020-21 Self-Assessment tax returns (to be submitted by 31 January 2022).
Confirming a significant reduction in trading profits
Before eligible customers make a claim for the third grant, they must decide if the impact on their business will cause a significant reduction in their trading profits for the tax year they report them in.
HMRC cannot make this decision on their behalf because their individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.
Eligible customers do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1 November 2020 to 29 January 2021 (period covered by the third grant).
Those who may need extra support
We recently sent a letter to customers who we have identified as potentially requiring extra support. At the time of writing to them, the customers had yet to claim for the third SEISS grant, and we believe they may be eligible, depending on the circumstances of their business. The letter included details of the deadline for claiming the third SEISS grant, our digital claim service, and the number of a helpline for those requiring additional support.
The third SEISS grant and working parents
For those unable to work because they have additional caring responsibilities due to school closures, and they meet all other conditions, they are eligible to claim, provided they reasonably believe that the impact of taking this time off will significantly reduce their trading profits for the year that they report them in.
Other types of work and the third SEISS grant
Due to the impacts of coronavirus, we know that some customers who are usually self-employed are also seeking other forms of work.
If they receive the grant they can:
- continue to work
- start a new trade or take on other work including voluntary work and duties as a military reservist.
Eligible customers must declare that they intend to continue to trade.
The fourth SEISS grant
HM Treasury have confirmed that information about the fourth SEISS grant will be provided on 3 March.
Thousands of people have joined and benefitted from our live webinars which now offer more support on changes to CJRS and SEISS, and how they affect you or your clients. Customers can book online, or to view updated guidance, on GOV.UK..
Our phone lines and webchat remain very busy, so the quickest way to find the support you need is on GOV.UK. This will leave our phone lines and webchat service open for those who need them most.
No Self Assessment late filing penalty for those who file online by 28 February
Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February.
More than 8.9 million customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible.
Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February.
Taxpayers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities. Customers can pay online, via their bank, or by post before they file. More information on how to pay is available on GOV.UK.
Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. HMRC has increased support for customers who may need help with their tax liabilities. Once they have completed their 2019-20 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments.
Further information is available in the press release on MyNewsDesk.
Postponed VAT Accounting: get ready now to account for import VAT on the VAT return
We are encouraging VAT registered businesses who import goods into Great Britain (England, Scotland and Wales) from anywhere outside the UK, or into Northern Ireland from outside the UK and EU to act now so that they can benefit from postponed VAT accounting (PVA).
PVA allows them to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later. We have published guidance on GOV.UK, which explains:
- when to account for import VAT on your VAT Return
- how to complete your VAT Return to account for import VAT
Businesses won’t need approval to benefit from PVA, but they will need to access the Customs Declaration Service (CDS) to view and download their monthly statements (in PDF format).
They need these statements to complete their VAT returns or to send them to whoever completes the VAT return on their behalf.
Businesses should subscribe to the new service as soon as possible to get a postponed import VAT statement online..
Importers that already have access to CDS will go straight from the new service, to their CDS financial dashboard where they can view and download their statements. Businesses without access to CDS will be automatically directed to subscribe to CDS first.
CHIEF users who subscribe to CDS to access their statements can continue to use CHIEF to make customs declarations.
Signing up for CDS is straightforward and takes only a few minutes. Businesses will need details of their:
- Government Gateway user ID and password
- Economic Operator Registration and Identification (EORI) number that starts with GB
- Unique Taxpayer Reference (UTR) – find your UTR if you do not know it
- National Insurance number (if they are an individual or sole trader)
- the date they started their business
A common error is inputting the address incorrectly. If the address on the application is not identical to the address that we hold, there will be delays in the processing. To avoid this, businesses should check all the details they plan to input, and make sure the address we hold is correct and up to date.
When an importer completes the customs declaration (on CHIEF or CDS) and indicates that they’ll be accounting for import VAT on their VAT Return, that import VAT will be shown on their monthly statement.
CHIEF users will need to enter:
- their EORI number starting with ‘GB’ which includes your VAT registration number into box 8 (Header Consignee), or, if applicable, your VAT registration number in box 44h (Registered Consignee)
- ‘G’ as the method of payment in Box 47e
CDS users need to enter their VAT registration number at header level in data element 3/40. VAT will be recorded against the EORI and will be at declaration level only.
The first monthly PVA statements will be available in early February showing the total import VAT postponed in January. Businesses should sign up to CDS now so that they are ready to complete their first VAT return under the new rules.
Until the end of June, importers bringing non-controlled goods into Great Britain from the EU must account for import VAT on their VAT return if they choose to:
- delay their customs declaration or
- use a simplified customs declaration to make a declaration in their own records
Preparing for changes to the off-payroll working rules (IR35) on 6 April 2021
We contacted you on 14 January about our education and support programme to help customers prepare for changes to the off-payroll working rules which are due to come into effect on 6 April 2021.
As part of this we will be emailing around 17,000 businesses this week to remind them to prepare and to provide details of the support available.
Customers we are emailing who should take action are:
- large and medium-sized non-public sector organisations who engage contractors who work through their own limited company or other intermediary
- employment agencies who supply such contractors