This month’s COVID-19 tidbits, 25 January 2021

Jan 25, 2021

HMRC and the UK Government continue to publish updates on COVID-19 related issues. When using a form or publication going forward or contacting HMRC, check you are using the most recent version or up to date way of contact which may have changed due to the pandemic.

Cycles schemes

The Government recognises that employees, who have joined an employer-provided cycles scheme, on or before 20 December 2020, could not have reasonably foreseen the changes to their working pattern as a result of the COVID-19.

In light of this, the Financial Secretary to the Treasury has announced that these employees will now benefit from a time limited easement which stops them from having to potentially paying a tax charge.

This means that scheme members who have been provided with a cycle or cycling equipment on or before 20 December 2020, will not have to meet the qualifying journeys condition of their employer provided cycle scheme until 05 April 2022.

Employees who join a scheme from 21 December 2020 will need to meet all the normal conditions of their cycling to work scheme. The Government introduced the employer provided cycles exemption to promote healthier commuting to work through the use of cycles and to reduce pollution – therefore where they can still commute to work, we would encourage new people to take up this scheme. For further information about this measure please visit GOV.UK.

Action for parents on Working Tax Credit if childcare stops temporarily

Following the recent re-introduction of national restrictions, some childcare providers are now closed, or only open for children of key workers and vulnerable children. School-based childcare will also be affected for many parents.

Parents and carers currently claiming the childcare element of Working Tax Credit will need to notify HMRC as soon as possible if their child stops going to childcare for four weeks or more, to avoid overpayment. The four week period is calculated from the last day the child attended the provider.

This also applies where the childcare is still available, but the parent or carer does not send their child.

If childcare is not being provided, but parents and carers are being asked to keep paying their provider in full or in part, these costs cannot be covered by tax credits. Where childcare stops being provided, HMRC will continue to pay the childcare element of Working Tax Credit for four weeks.

To report these changes, parents and carers must call the tax credit helpline on 0345 300 3900.