This week’s update looks at key deadlines for the job retention scheme, a reminder on the VAT payment deferral scheme and HMRC’s approach to the fourth SEISS grant.
Coronavirus job retention scheme (“CJRS”)
February CJRS claims
Claims for the month of February 2021 must be made by 11.59pm today Monday 15 March 2021, unless reasonable excuse is available. The deadline to amend claims for the month of February 2021 is Monday 29 March 2021.
Eligibility from May
For periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This means they must have made a PAYE Real Time Information (“RTI”) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
Your clients do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.
Recent CJRS guidance updates are as follows:-
Self-employed income support scheme (“SEISS”) grants
As set out on Budget day, the fourth and fifth grants will take into account submitted 2019/20 tax returns. This means your clients may be able to claim, even if they were not eligible for previous grants. However, your clients must have submitted their 2019/20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.
Fourth SEISS grant
The Government will pay a taxable grant which is calculated based on 80 per cent of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based average trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income.
Eligibility for the fourth SEISS grant will also depend on whether a significant financial impact from coronavirus was experienced between February 2021 and April 2021.
As the calculation now takes into account the tax year 2019/20, taxpayers who previously claimed SEISS grants may receive grants that are higher or lower in value than any previous SEISS payments they received.
Taxpayers will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or their inability to trade, and to keep appropriate records as evidence.
HMRC has advised that they have undertaken some checks of taxpayer eligibility before applications open for the fourth grant which is also aimed at protecting the SEISS from fraud. Where further checks are needed we have been advised that HMRC will write to taxpayers and explain that HMRC will call them to ask for proof of identity and evidence of trade. To make these calls, HMRC will use the telephone number on the taxpayer’s record. If this is their agent's number, HMRC will ask the agent to provide their client’s contact number as HMRC need to speak to them directly. The Institute is currently discussing this process with HMRC
From mid-April, taxpayers will be given their personal claim date by HMRC which confirms the earliest date they can claim. Once again, HMRC is inviting taxpayers to claim on different days. The online claims service for the fourth grant will be live from late April. This is to allow HMRC time to process recently submitted 2019/20 Self-Assessment tax returns.
Claims for the fourth grant must be made between the personal claim date and 31 May 2021 at the latest.
Fifth grant
The fifth and final SEISS grant will cover May 2021 to September 2021 and will be determined by how much turnover has been reduced.
This grant will be worth 80 per cent of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30 per cent or more). For those with a lower reduction in turnover, of less than 30 per cent, then the grant will be worth 30 per cent of three months average trading profits.
Claims will open from late July and further details will be provided in due course.
Taxpayers should have the following to hand to make claims for the fourth and fifth grants:
- National Insurance number;
- Self-Assessment Unique Taxpayer Reference (UTR);
- Government Gateway user ID and password; and
- Bank account number and sort code.
Taxpayers claiming SEISS for the first time may be asked additional questions to prove their identity. They should be ready to answer questions about the following documents, which HMRC recommends they have to hand:
- UK passport (once again, an Irish passport can’t be accepted despite this Institute lobbying specifically on this point);
- Credit file (such as loans, credit cards or mortgages);
- Self-assessment tax return (within the last 3 years);
- Driving licence (DVLA UK or DVA NI);
- Tax credit claim;
- P60; and
- Three most recent payslips.
VAT deferral
If your client deferred VAT payments due between 20 March 2020 and 30 June 2020 and still has payments to make, they should pay by 31 March 2021 if they can. If they cannot afford to pay by 31 March this year, they can now join the online VAT deferral new payment scheme which opened last month on 23 February 2021 to spread the payment.
The scheme lets taxpayers pay their deferred VAT in equal monthly instalments which are interest free. Payments can be spread across a number of months, depending on when they join – the earlier they join, the more months they have to spread the payments across as follows:-
- 11 instalments if they join by 19 March;
- 10 instalments if they join by 21 April;
- 9 instalments if they join by 19 May; and
- 8 instalments if they join by 21 June.
This online scheme will therefore close on 21 June 2021 – if you want to join the scheme online, you must do so before this date.
Anyone on the VAT Annual Accounting Scheme or Payment on Account Scheme will be able to join the new payment scheme later this month. HMRC will share more information on this shortly.
If you have a Time to Pay (“TTP”) arrangement already in place for the deferred VAT, this online scheme cannot be used. If a taxpayer wants to amend their TTP arrangement, they should contact HMRC to do this.
Class 2 NIC
HMRC is aware that some taxpayers may have paid voluntary Class 2 National Insurance contributions (“NICs”) even though they did not file their 2019/20 SA return until after 31 January 2021. Unfortunately, HMRC processing rules don’t allow for voluntary Class 2 NICs to be included in the SA calculation for returns filed after 31 January, so any Class 2 NICs payment will not be linked to the deferred return.
If your client has paid voluntary Class 2 NICs via SA, but filed their return after 31 January 2021, they will receive a message when they file their 2019/20 return telling them it’s too late to pay voluntarily, and they could receive a refund of the voluntary Class 2 NICs payment. If this situation arises please contact HMRC on the National Insurance Helpline 0300 200 3500.
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