In this week’s update, updated guidance has been published by HMRC on extended loss carry-back and the easement for taxable earnings affected by travel restrictions as a result of COVID-19 ended earlier this month. However, the tax exemption for employer-provided and employer-reimbursed COVID tests continues in 2022/23.
Extended loss carry-back guidance updated
The guidance note about the rules for the temporary extension of loss carry back for businesses has been updated.
Finance Act 2021 provides a temporary extension to the loss carry back rules for trading losses of both corporate and unincorporated businesses to 36 months, subject to certain conditions being met.
Easement for non-resident employees ends tomorrow
In 2020, HMRC published guidance in its Employment Manual stating non-UK resident employees stranded in the UK because of COVID-19 travel restrictions would not be taxed on earnings for duties performed in the UK after their planned departure date, provided they are taxed in their home state.
This easement ended on 5 April 2022 as travel restrictions have been largely withdrawn meaning it is no longer ‘just and reasonable’ to treat these duties as performed outside the UK.
If a taxpayer is non-UK resident, ordinarily any days they spend working in the UK will be treated as days on which they performed duties in the UK. From 6 April 2022, this is the case even if they are prevented from leaving the UK as a result of COVID-19 related circumstances.
Tax exemption for employer-provided and employer-reimbursed COVID tests
Legislation has been passed extending the income tax and national insurance exemption for employer-provided and employer-reimbursed COVID-19 tests into 2022/23. The exemption had been due to end on 5 April 2022 but now also applies to payments made by employers for these purposes in 2022/23.