Ian Murray MP Working Hard for Edinburgh South
This update was sent to all MPs on 19th October 2021
Dear Mr Murray,
This HM Revenue and Customs (HMRC) Parliamentary Digest provides a round-up of our latest news and updates, which we hope you will find useful to help your constituents. We’d be grateful if you could share these messages with people living and working in your constituency.
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 (COVID-19).
- Coronavirus Job Retention Scheme (CJRS)
- Reporting coronavirus grants on a tax return
- Frequently asked questions about the CJRS
- Self-Employment Income Support Scheme (SEISS)
- Final claims for the Statutory Sick Pay Rebate Scheme
- Extended window to appeal now closed
- Automatic enrolment for pensions
- Get ready for Plastic Packaging Tax webinars
- Time to get ready for Self Assessment
- Contacting HMRC with urgent casework
Coronavirus Job Retention Scheme (CJRS)
The CJRS closed on 30 September and the final deadline for claims was 14 October.
What employers need to do now
- if their claims for September need to be amended, they must do so by Thursday 28 October
- keep records for six years supporting the grants they claimed, in case we need to check them
- include grants as income on their company tax return, partnership tax return or the self-employment pages of their individual tax return for the tax year of receipt, depending on the business type
- go to ‘Plan for Jobs’ on GOV.UK if they want to see other support that may be available to them.
Reporting coronavirus grants on a tax return
Grants to support businesses and self-employed people during the pandemic are taxable. Customers who claimed CJRS grants, or other COVID grants, need to make sure these are included as income on their tax return. Depending on their business type, they’ll need to report this as income on their company tax return (CT600), partnership return (SA800) or the self-employment pages of their individual tax return (SA103).
When completing a tax return on their customers’ behalf, tax agents will need to check the coronavirus grants they received.
There is a specific box on the 2020-21 tax return for customers to report their SEISS grants received on or before 5 April. Customers should not include their SEISS grants in their turnover, or the ‘any other income’ box on the return. Including SEISS in the wrong box could cause the grants to be taxed twice.
We included further information about how to report SEISS grants in our previous emails and further outline the approach to partnerships below. Go to reporting coronavirus grants and support to find examples of the types of grants or payments customers need to include, when and how to include them on a tax return.
Frequently asked questions about CJRS
You can find everything you need to know about CJRS on GOV.UK, but here are the answers to the most frequently asked questions.
What if a customer has missed the deadline to claim?
We may accept a claim made after the deadline if:
- the customer has a reasonable excuse for failing to make the claim in time – despite taking care to do so, and
- they submitted their claim as soon as they were able to.
Examples of reasonable excuses can be found on GOV.UK.
What if a customer has claimed too much in error?
If a customer has claimed too much in CJRS grants and has not already repaid the overclaimed amount, they can let us know and make a repayment online by card or bank transfer.
They must tell us and repay the money by the latest of whichever date below applies:
- 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.
If they don’t, they may have to pay interest and a penalty as well as repaying the excess CJRS grant.
What if a customer hasn’t claimed enough?
If a customer made a mistake in their last claim for September that means they received too little money, they’ll need to amend it by Thursday 28 October.
Self-Employment Income Support Scheme (SEISS)
As Self-Employment Income Support Scheme (SEISS) grants are taxable, if a customer claimed they should declare these on their tax return. In the previous parliamentary digest we gave you some information about including SEISS grants in the Self Assessment tax return, and in this edition, we’ve included more details to help you support individuals to report their grants correctly.
Advice for customers in partnerships
If customers are partners and claimed under the SEISS, how their grants are treated for tax purposes depends on who received the grants.
- For most partners, HMRC paid the SEISS grant directly into their individual bank account, meaning it is not recorded as partnership income in the partnership accounts. Customers who received SEISS grants in this way should report the grant as an addition to their partnership income on the partnership supplementary pages. Grants paid on or before 5 April 2021 should be included on their 2020-21 return, using box 9.1 on the partnership supplementary pages (SA104S or SA104F). Their SEISS grants should not be included on the partnership tax return (SA800).
- If the grant was paid to the partnership and treated as partnership income, included in the partnership accounts and distributed to all partners in line with the partnership agreement, customers should include the grant amount within the turnover boxes on the partnership tax return (SA800). SEISS grants should not be included on the individual’s partnership supplementary pages (SA104S or SA104F) as they would already be reflected in the amount of income received from the partnership. Customers should take care not to report the grant again on the SA104S or SA104F, as they may be taxed twice.
What to do if their accounting year is different to the tax year
All SEISS grants received before 6 April 2021 are taxable in the 2020-21 tax year, regardless of the recipient’s accounting period. This is because SEISS grants are intended to provide broadly real time support for businesses during the pandemic. Taxing SEISS grants in this way ensures fairness, in that all recipients report and pay tax on the grant at the same time, regardless of their accounting date. For most of customers, the first, second and third SEISS grants were paid on or before 5 April 2021.
If a customer’s return is amended by us
If a customer claimed a grant but does not fill in the box for SEISS grants on their return, or if the amount in the box is different to our records, we will update their return and contact them (and their authorised agent). The customer should check the changes we make and follow the instructions on GOV.UK.
Final claims for the Statutory Sick Pay Rebate Scheme
The SSP Rebate Scheme closed on 30 September and customers have until 31 December to submit any final claims, or to amend claims they have already submitted.
As a reminder, if a customer is an employer with fewer than 250 employees and if they’ve paid Statutory Sick Pay (SSP) to employees for sickness absence or self-isolation that was coronavirus-related on or before 30 September, they could be eligible for support. Tax agents can make claims on behalf of their clients. The repayment can cover up to two weeks of the applicable rate of SSP.
Extended window to appeal now closed
In February 2020, HMRC introduced a three-month extended window to appeal against tax decisions and penalties if the delay in making the appeal was due to coronavirus. This ended on 30 September. For tax decisions and penalties dated up to and including 30 September 2021, the extended window to appeal is still available. Individuals should follow the normal process and times for appealing decisions dated from 1 October onwards.
We know that some customers are still feeling the impacts of coronavirus, and this may still be a reasonable excuse for not meeting tax obligations on time. We will consider appeals and ask for evidence if needed.
Closure of bulk appeals against Income Tax Self Assessment late filing penalties due to coronavirus
Since 24 March tax agents have been able to appeal in bulk against late filing penalties, on behalf of their clients, for 2019-20 tax returns filed after 28 February. This allowed them to submit appeals for up to 25 clients at a time, where the reasonable excuse was due to coronavirus. From 1 October the bulk appeal process is no longer available, so they will need to follow the usual process, using the SA370 or appealing online.
Agents can still claim reasonable excuse on behalf of their clients and, for decisions dated up to 30 September, have the three month extended window to appeal.
Automatic enrolment for pensions
This is a reminder that employers’ automatic enrolment duties continue to apply as normal. It’s important that employers continue to support their employees by meeting their ongoing legal duties, including paying the correct pension contributions.
Keep supporting employees and they’ll keep supporting you
Employers need to understand what they need to do and by when. This includes:
- paying the correct amount on time to the staff pension scheme
- checking if new staff are eligible for a pension scheme and letting them know
- re-enrolling eligible staff at the right time
For more information on an individual’s role as an employer, go to The Pension Regulator’s website.
Get ready for Plastic Packaging Tax webinars
Do your constituents manufacture or import plastic packaging? If so, please promote our Get Ready for Plastic Packaging Tax Webinars, ahead of the tax coming into force in April 2022.
The Plastic Packaging Tax Administration and Technical Aspects Webinar, on 26 October and 12 November, will cover exports and tax credits, supply chain responsibilities, types of recycling, calculating, evidencing weight of packaging and evidence for exemptions.
Spaces are limited so please encourage affected businesses to reserve their spot now.
A recording of the webinar will be available online afterwards. However, questions asked during the sessions will only be available to those who join live.
Time to get ready for Self Assessment
HMRC is reminding Self Assessment customers to check that they have the correct information in order to complete their tax return.
The tax return deadline for the 2020 to 2021 tax year is 31 October 2021 for those completed on paper forms and 31 January 2022 for online returns.
Any customer who is new to Self Assessment must register via GOV.UK to receive their Unique Taxpayer Reference (UTR). Self-employed individuals must also register for Class 2 National Insurance.
HMRC is encouraging customers to register early so that they can access guidance and be aware of what they need to do. This includes record keeping, knowing when the filing and payment deadlines are, and the potential for a first tax payment to include a payment on account.
This year, customers will also have to declare if they received any grants or payments from COVID-19 support schemes up to 5 April 2021 as these are taxable, including:
- Self-Employment Income Support Scheme
- Coronavirus Job Retention Scheme
- other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme
HMRC recognises that some customers may be worrying about paying their tax bill. Customers can access support to help pay any tax owed, and may be able to set up their own affordable monthly payment plan online by using HMRC’s self-serve Time to Pay facility. Customers should contact HMRC for help if they have concerns about paying their bill.