The below update was sent to Ian Murray MP on 18th March:
VAT deferral – apply now to spread your payments
The VAT deferral new payment scheme is open for all businesses who deferred VAT due between 20 March and 30 June 2020 and still have payments to make, or who are unable to pay in full by 31 March 2021. This includes those on Payment on Account and Annual Accounting schemes.
Businesses in your constituency can apply now to spread these payments over a number of months – the later businesses join the fewer instalments are available to them. Businesses should join by 19 March 2021 to benefit from the maximum number of 11 instalments.
Businesses can join the scheme quickly and simply online without the need to call HMRC. More information, including the things they need to do before joining, can be found on GOV.UK.
Businesses in your constituency need to apply by or before 21 June 2021 if they want to join the scheme online.
Self-Employment Income Support Scheme
HMRC has announced the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.
We wanted to take this opportunity to provide answers to some of the early questions that we have been asked. More information will be available on GOV.UK in due course.
Fourth SEISS grant – Eligibility and calculation
Much of the eligibility criteria remains unchanged from the third grant, with notable exceptions that an individual must:
- have submitted their 2019/20 tax return by 2 March 2021
- have trading profits that are at least nil (not a trading loss), based on their 2019/20 tax return, or an average of tax years 2016/17, 2017/18, 2018/19 and 2019/20
- have trading profits that are no more than £50,000 and at least equal to their non-trading income, based on their 2019/20 tax return, or an average of tax years 2016/17, 2017/18, 2018/19 and 2019/20
- have been trading in the tax years 2019/20 and 2020/21.
Full eligibility criteria can be found on GOV.UK.
The reasonable belief declaration which has been in effect for the second and third SEISS grants remains in effect. There is no turnover test for the fourth SEISS grant.
Claiming the fourth SEISS grant
We will contact potentially eligible customers from mid-April with a personal claim date. These customers can claim at any time from their personal claim date until the claims service closes on 31 May.
As with previous grants, agents can offer help and advice, but they cannot make a claim on their client’s behalf as this will trigger a fraud alert and result in significant delays to their client’s receiving payment. We would appreciate agent’s support in preparing any of their newly eligible clients for possible identity verification questions and creating a Government Gateway account.
Upcoming customer contact
We have moved quickly to ensure we have the information we need to check customers’ eligibility before applications are open, while also preventing fraudulent SEISS claims. Where we need to make further checks, we will write to customers and explain that we will call them to ask for proof of identity and evidence of trade. To make these calls, we will use the telephone number on the customer’s record. If this is their agent’s number, we will ask that they provide us with their client’s contact number as we need to speak to them directly.
Employers in your constituency can now make CJRS claims for March
Employers in your constituency can now submit their CJRS claims for periods in March 2021. These must be made by Wednesday 14 April.
Employers can claim before, during or after their payroll is processed. If they can, it’s best to make a claim once they’re sure of the exact number of hours their employees will work so they don’t have to amend the claim later.
Employers in your constituency can check if they and their employees are eligible and work out how much they can claim using our CJRS calculator and examples.
What employers in your constituency need to do now
- If they haven’t submitted their claim for February but believe there is a reasonable excuse for missing the deadline, check if they can make a late claim on GOV.UK.
- Submit any claims for March no later than Wednesday 14 April.
- Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them.
Extension to the CJRS
As announced in the 2021 Spring Budget, the CJRS has been extended until the end of September 2021.
For periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on their PAYE payroll on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers in your constituency will need to continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, they will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.
Employers must continue to pay Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.
Entering personal details
When an agent submits their clients’ claims, it’s really important to take care when entering their personal details so they’re accurate. To ensure their claim is processed and their grant is paid correctly, the agent should take extra care to check that the bank account details they enter are correct. If they enter an incorrect sort code they will now be alerted to this in the online claims service, and the claim won’t go through.
COVID support schemes: frequently asked questions
Fourth SEISS grant
Have the eligibility criteria changed?
The eligibility criteria will now take into account 2019/20 returns submitted by 2 March 2021. This may mean that some customers no longer meet the eligibility criteria, for example, if their average trading profits were over £50,000 for both 2019/20 and on average across 2016/17 to 2019/20.
Eligibility criteria are initially assessed against the 2019/20 return. If the eligibility criteria (trading profits at least equal to non-trading income and not exceeding £50,000 in 2019/20) aren’t met, we look at the average of the four tax years (where available) and consider all eligibility criteria against this average.
Will there be an eligibility checker?
We want to help customers understand whether they will be eligible, especially as there are changes to the eligibility criteria. We are providing an online eligibility checker from mid-April, and as with the first SEISS grant, agents can use this checker on behalf of their clients. The checker will confirm eligibility, but it will not give a specific reason if someone is ineligible (the customer will need to sign in to their Government Gateway account to find the reason, as this is personal information).
I didn’t submit my 2019/20 tax return by 2 March 2021, but I claimed earlier SEISS grants. Can I claim the fourth grant?
If someone did not submit their 2019/20 Self Assessment tax return by 2 March 2021, they will not be eligible for the fourth SEISS grant.
I didn’t trade in one or more of the tax years 2016/17 to 2019/20 – how will my grant be calculated?
The fourth SEISS grant will first assess individuals’ eligibility on the basis of their 2019/20 returns, and if ineligible on the basis of those returns, the average of relevant years between 2016/17 and 2019/20. For the purposes of calculating the average of relevant years; if there is a gap in returns (e.g. an individual filed in 2016/17, 2018/19 and 2019/20), we would only take into account the consecutive years after the gap in filing (in this example, 2018/19 and 2019/20).
I amended my 2019/20 tax return – will the amended figures be used to calculate my fourth SEISS grant?
Amended 2019/20 returns will be taken into account for SEISS, if they were received by 2 March 2021.
Should SEISS grants be included in the annual allowance calculation for private pensions?
Yes – the SEISS grant should be included in the calculation of relevant UK earnings when working out your annual allowance.
As we approach the end of the financial year, customers may be making the calculations for their annual allowance for pensions contribution purposes. Please keep in mind the SEISS grants form part of taxable trading income and are considered relevant UK earnings to the extent that they are referable to the trade. As such, they should be included in the annual allowance calculation at s.190 FA04. Further guidance about the annual allowance is available on GOV.UK.
What support is there for new parents / those who took parental leave in 2019/20?
Self-employed parents who did not submit a tax return for 2019/20, or whose trading profits in 2019/20 were less than their other income and were therefore ineligible for the SEISS, because they were pregnant or taking time out of their trade to care for their new-born or newly adopted child, may still be eligible for the SEISS.
For new parents, we will assess eligibility using either their 2018/19 self-assessment return or an average of their 2016/17 to 2018/19 returns as the basis for their eligibility and grant calculation. They will also need to meet the other eligibility criteria for support under the SEISS.
This does not affect the grant calculation for those who submitted a 2019/20 return and are already eligible.
How long will it take to receive the grant?
As with previous SEISS grants, the money will be paid into the customer’s bank account within six working days of making their claim.
What if I’ve claimed too much in error?
If an employer has claimed too much CJRS grant and have not already repaid it, they can repay as part of their next online claim without needing to call us. If an employer claimed too much but do not plan to submit further claims, they can let us know and make a repayment online through our card payment service or by bank transfer.
Employers must notify us and repay the money by the latest of whichever date applies below:
- 90 days from receiving the CJRS money they were not entitled to
- 90 days from the point circumstances changed so that they were no longer entitled to keep the CJRS grant.
If employers do not do this, they may have to pay interest and a penalty as well as repaying the excess CJRS grant. More information on interest can be found on GOV.UK.
What if I haven’t claimed enough?
If an employer has made a mistake in a claim that means they received too little money, they’ll need to amend it within 28 calendar days after the month the claim relates to – unless this falls on a weekend or bank holiday, in which case the deadline is the next weekday. The deadline to amend claims for February is Monday 29 March.
Find out how to amend a claim on GOV.UK.
You can find everything you need to know about the CJRS on GOV.UK.
Where can I get further support?
Many customers have benefitted from our webinars which offer information on the CJRS and SEISS, other support and how it applies to them. Your constituents can go to help and support if your business is affected by coronavirus to book online, or to view updated guidance. If a customer booked on a webinar but can no longer attend, they should cancel their place where possible to allow space for others to register.
There’s a list of monthly claims deadlines and a helpful step by step guide on GOV.UK, summarising the latest information on the CJRS and the steps your constituents need to take to make a claim.
£20 million SME Brexit Support Fund opens for applications
Smaller businesses in your constituency can apply for grants of up to £2,000 to help them adapt to new customs and tax rules when trading with the EU.
The £20 million SME Brexit Support Fund enables traders to access practical support, including training for new customs, rules of origin and VAT processes.
Small and medium sized businesses that trade solely with the EU – and are therefore new to importing and exporting processes – are encouraged to apply for the grants.
To be eligible, businesses must import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland.
More information about the SME Brexit Support Fund, including details of how to apply, can be found on GOV.UK.
Update on changes to off-payroll working rules
There are less than three weeks to go before the changes to the off-payroll working rules take effect on 6 April 2021.
This update highlights information we have recently shared and support available to help your constituents to understand and prepare for the changes.
The issue briefing we published recently, outlining our compliance approach, confirms that HMRC is taking a supportive approach, working with affected organisations to help them to meet their responsibilities under the rules. Your constituents should be preparing for the changes and can use HMRC’s comprehensive programme of education, support and guidance to do so. This support includes webinars, with dates now released for sessions up to May 2021.
Last week we sent a message through the payroll system to 48,000 employers who may be affected by the rules. We have also been posting regular question and answer posts on social media which your constituents may find useful, one answers questions about compliance and others are aimed at contractors and agencies.
Organisations preparing for the changes can also use HMRC’s free Check Employment Status for Tax (CEST) tool to help them to give their contractors a Status Determination Statement (SDS).
We are routinely publishing detailed data on the status decisions CEST issues to help build further confidence in it, and we published the latest data yesterday. In the last three months CEST has been used over 230,000 times. To help with the minority of finely balanced cases (20%), where CEST is expected to produce an undetermined outcome HMRC is providing detailed guidance and dedicated support, including CEST specific guidance and guidance to aide status decision making.
HMRC also recently updated its guidance and Tax Information and Impact Note (TIIN) about the reform (TIIN) following the Budget. As part of this the Government confirmed that some technical changes will be made to the off-payroll working legislation, these include changes to ensure the off-payroll working rules operate as intended and also to improve them, based on feedback from stakeholders. It also published a separate TIIN on these changes, which will take effect from 6 April 2021 alongside the rest of the rules.
Please encourage your constituents affected by the off-payroll working reform to prepare for the changes, and share information highlighted in this article to those who it may help.
Families reap the benefits of Tax-Free Childcare
Families using their Tax-Free Childcare accounts to pay for their childcare costs are benefitting from a government top-up worth up to £500 every three months, HMRC has announced.
Howver, there are thousands of families across the UK missing out on the chance to save money on childcare. They too could join almost 248,000 families across the UK who saved money using Tax-Free Childcare in December 2020, an increase of almost 43,000 families from December 2019, and received a share of more than £25 million in government top-up payments.
Tax-Free Childcare allows parents or carers who have children aged up to 11, or 17 if their child is disabled, to pay their childcare provider through the scheme, and receive a 20% government top-up on any money deposited.
For every £8 per child a parent or carer deposits, they will receive £2 in top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. That equals £2,000, or £4,000 for the care of a disabled child, for a whole year. The top-up is paid directly into the child’s account and is ready to use almost instantly.
As children across the UK return to school, families can use the money to pay their childcare provider including childminder fees, after school clubs or sports activities, where the childcare provider has signed up to Tax-Free Childcare. Families could also save money now to earn the government top-up and use the money to pay for childcare, summer camps and play schemes during school holidays.
More information is available on GOV.UK.
A word about scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic. Check GOV.UK for our scams checklist, find out how to report tax scams and get information on how to recognise genuine HMRC contact. You can forward suspicious emails claiming to be from HMRC to email@example.com and texts to 60599.
Access the National Cyber Security Centre’s guide on how to stay secure online and protect yourself and your business against cyber crime.
National workplace testing for COVID-19
All businesses with employees in England who can’t work from home can now sign up for free, rapid workplace testing, including those still closed due to lockdown. Businesses will be provided with all the information they need to plan and deliver testing, and they can order tests through the GOV.UK portal.
They’ll need to register by 31 March, and free tests will currently be provided until the end of June.
Businesses in your constituency can find out more and sign up on GOV.UK.