Latest Tax news

HMRC has today sent the below update on the SEISS scheme:- "The deadline for claiming the third SEISS grant is fast approaching. If your clients are eligible, they must make their claim on or before 29‌‌‌ ‌January 2021. As with the first and second SEISS grants, the third grant will be subject to Income Tax and self-employed National Insurance and must also be reported on your clients’ 2020-21 Self Assessment tax returns (to be submitted by 31‌‌‌ ‌January 2022). Confirming a significant reduction in trading profits Before your clients make a claim for the third grant, they must decide if the impact on their business will cause a significant reduction in their trading profits for the tax year they report them in. HMRC cannot make this decision on behalf of your clients because their individual and wider business circumstances will need to be considered when deciding whether the reduction is significant. Your clients do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1‌‌‌ ‌November 2020 to 29‌‌‌ ‌January 2021 (period covered by the third grant). Supporting your clients We recently sent a letter to customers who we have identified as potentially requiring extra support. At the time of writing to them, the customers had yet to claim for the third SEISS grant, and we believe they may be eligible, depending on the circumstances of their business. The letter included details of the deadline for claiming the third SEISS grant, our digital claim service, and the number of a helpline for those requiring additional support. Details of the extra support we can provide for your clients can also be found on GOV.UK. The third SEISS grant and working parents If your clients are unable to work because they have additional caring responsibilities due to school closures, and they meet all other conditions, they are eligible to claim, provided they reasonably believe that the impact of taking this time off will significantly reduce their trading profits for the year that they report them in.  Details of the eligibility criteria can be found on GOV.UK. Other types of work and the third SEISS grant Due to the impacts of coronavirus, we know that some customers who are usually self-employed are also seeking other forms of work. If your clients receive the grant they can: Continue to work. Start a new trade or take on other work including voluntary work and duties as a military reservist. Your clients must also declare that they intend to continue to trade. The fourth SEISS grant Information about the fourth SEISS grant will be provided on 3‌‌‌ ‌March."

HMRC has just announced that late filing penalties will not apply to 2019/20 income tax returns filed by 28 February. Earlier this month the Institute’s President Paul Henry wrote to the Chancellor of the Exchequer calling for a concession on the income tax deadline in light of the rampant nature of COVID-19 and the lockdown announced in early January.  Chartered Accountants Ireland also made representations to Minister Diane Dodds and Minster Conor Murphy.  In a new survey of NI members, over 85 percent of respondents say an automatic suspension of late filing penalties or a deadline extension is necessary given the extraordinary pressures facing businesses and accountants.  Today’s announcement by HMRC is practical and helpful to all concerned - taxpayers, accountants and HMRC.  HMRC’s press release is available here.  Jim Harra, Chief Executive of HMRC also wrote to Chartered Accountants Ireland and other professional bodies on this latest announcement noting that “this easement applies only to the initial £100 late filing penalty.  We are not moving the filing deadline and other self-assessment obligations are unchanged, including the obligation to pay on time.  I would value your support in getting the message out that taxpayers should file and pay on time where possible.”  Over 50 percent of chartered accountants surveyed last week said that their firm was incredibly busy and that the workload was unmanageable.  In addition to the challenges of working and living under pandemic lockdown conditions, accountants also have increased workloads helping businesses with Government Covid-19 supports.  Nearly all respondents (99 percent) to the survey have clients claiming Government Covid-19 supports administered by HMRC and over 80 percent say that their clients need a high degree of assistance in claiming these supports.  Communicating with HMRC is also a problem with 96 percent of those surveyed saying it is more difficult to make contact with HMRC than this time last year.

HMRC’s latest schedule of webinars is now available for booking. These are designed to provide information, guidance and tips on tax issues. Spaces are limited, so take a look now and save your place. If you have any questions, please send them to team.agentengagement@hmrc.gov.uk prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many as possible on the day. Off-payroll working rules from April 2021: choose a date and time This webinar gives an update on changes to the off-payroll working rules (IR35) from April 2021 for: the public sector medium and large sized organisations. Off-payroll working rules 2021 – international matters: choose a date and time This webinar explains how the off-payroll working rules interact with international and overseas issues. Off-payroll working rules from April 2021: Contractors: Thursday 4 February – 9.45am to 10.45am This webinar gives an overview of the changes to the off-payroll working rules which come into effect on 6 April‌‌‌ ‌2021. It is specifically designed to help contractors understand what these changes will mean for them. In addition to this live webinar, a number of recordings are also available:- Capital Allowances and vehicles: view here; Trade Losses: view here; Income from property for individual landlords – part 1: view here; and Income from property for individual landlords – part 2: view here.

HMRC are warning about the non-availability of specific services on the HMRC website, with a range of services impacted. Check the relevant page for information on planned downtime.

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.

HMRC sent the below update on Making Tax Digital (“MTD”) for income tax which is targeted to commence from April 2023. “We want to provide you with an update on the roll out of MTD for ITSA customers and expect that the legislation underpinning the roll out of MTD for ITSA customers will be laid in Parliament in early 2021.    The legislation will confirm, amongst other things, the scope of MTD for ITSA, including that all ITSA customers with a taxable turnover of £10,000 or more per year from their business or income from property, will be required to join MTD from April 2023, with the following exceptions:  Trusts, estates, trustees of registered pension schemes and non-resident companies will not be required to join MTD for ITSA.  Partnerships that earn £10,000 or more and that have only individuals as partners are required to join MTD for ITSA from April 2023 but all other partnerships (e.g., those that have corporate partners and Limited Liability Partnerships) are not required to join MTD for ITSA in April 2023 but will be required to join MTD at a future date, to be confirmed. These customers are exempt due to the complexity of delivery requirements, and as their nature and current obligations differ notably from those of sole traders, partnerships with individuals only as partners, and individual landlords.  We remain committed to maintaining an open dialogue and a collaborative working relationship on the rollout of MTD. Therefore, we are sharing a draft of the ITSA legislation in the ITSA Service Guide ahead of a final version being laid in Parliament in early 2021. This draft legislation can be found in the Developer Hub, in the in the ITSA end-to-end service guide here. While formal consultation on draft regulations for ITSA took place in 2016 and this version reflects feedback from that exercise, we would welcome any further feedback you may have on the content and scope of these updated draft regulations. Please reply to this email if you wish to discuss further and my team will be in touch.  We have also just released functionality that allows software developers to build MTD for ITSA-compatible products for customers with construction industry, state benefits, employment and student loan income, and taxpayers with more than one source of self-employment and/or property income. The end-to-end MTD ITSA pilot will be expanded in scope yet further from April 2021 to enable even more businesses and landlords to join and facilitate full testing of the service in advance of testing at larger volumes in 2022-23, ahead of mandation. We will be grateful for ongoing support from agents and businesses who are in a position to start using MTD early and help us test the service.”

There are a number of COVID support scheme deadlines approaching. From tomorrow Tuesday 26 January, HMRC are commencing publication of employer’s CJRS claims unless an employer’s application to stop publication on the grounds of violence or intimidation is accepted. Such applications must be made before tomorrow’s publication date and should be accompanied by supporting evidence; December 2020 CJRS claims, where an underpayment arose, can be amended until Thursday‌‌ ‌28‌‌ ‌January; Friday 29 January is the deadline to apply for the third self-employed income support scheme grant; and The next claim deadline for the CJRS for the month of January is Monday 15 February unless reasonable excuse is available. HMRC has also updated the CJRS guidance ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ which sets out that the calculator cannot be used if employees have variable pay, were not on their employer’s payroll on or before 19 March 2020 and have been on more than one period of furlough after 1 November 2020.

Revenue extended the filing deadline for the VAT Return of Trading Details (RTD) to 10 March 2021. Currently the VAT RTD form does not reflect the temporary reduction in the standard rate of VAT from 23 percent to 21 percent, which took effect on 1 September 2020. Revenue confirmed the revised VAT RTD form will be available from 10 February 2020, and to allow sufficient time for filing, the deadline is extended to 10 March 2021. See eBrief No. 008/21 for full details.  Revenue also confirmed to Chartered Accountants Ireland that where a taxpayer or their agent has already submitted a VAT RTD in which the 23 percent supplies box includes information of supplies made at the 21 percent rate, it will not be necessary to amend or resubmit the VAT RTD.

Revenue updated the information booklet on the Debt Warehousing scheme. The booklet now includes additional information on the re-introduction of Level 5 restrictions and the removal of guidance on the reduced interest rate phased payment arrangements. Updates to the Information Booklet include details and examples on the implications for businesses within the warehousing scheme for VAT and PAYE (Employer) on the most recent re-introduction of Level 5 restrictions. Where a business reopened in December and closed again on the re-imposition of restrictions, the warehousing timeline will depend on when the business returns to trading in 2021.

The Tax Appeals Commission (TAC) published a stamp duty determination, in which the Appeal Commissioner and Chairperson of the TAC, Maire-Claire Maney, determined an assessment raised under section 31D SDCA 1999 should be reduced to nil. The determination was made on the basis that the legislation on which Revenue, as respondents, sought to rely on could not be considered to have retrospective effect. The transaction relates to the acquisition of a company by the Appellant, which took effect by way of a cancellation of shares in the target company and the issue of new shares to the Appellant, together with some cash consideration. The assessment to stamp duty by Revenue was made on the application of section 31D SDCA 1999. This section was introduced by Finance Act 2019 to impose a stamp duty charge on the court-approved acquisition of companies involving the cancellation of existing shares and the issue of new shares as consideration. The Appellant argued that the assessment effectively served to retrospectively apply the provision introduced by Finance Act 2019, as the transaction agreement completed prior to the introduction of the legislation. The effective date of the change relates to a scheme order made on or after 9 October 2019. The Commission was requested to state and sign a case for the opinion of the High Court for this determination, however it is understood that the Appellant has brought a “precautionary” High Court action against the Revenue Commissioner relating to this matter. See 08TACD2021 for the full determination in this case.

To date 18,600 businesses have registered 21,400 premises for the COVID Restrictions Support Scheme (CRSS) which is administered by Revenue. 50,800 claims for CRSS payments of €221.5 million have been made based on the latest statistics released on 21 January. The Government originally estimated that the CRSS would cost €40m for every week of nationwide Level 3 restrictions.  Chartered Accountants Ireland, under the auspices of the CCAB-I, wrote to Minister Donohoe calling for the CRSS to be available to more businesses suffering financial difficulties due to COVID-19 restrictions.  Starting from 17 November 2020, an eligible business, if registered with Revenue for CRSS and who carries on a business activity from a premise located in a region subject to COVID-19 related restrictions, can make a claim for payment under the CRSS. Currently the support is only available to a  business required to prohibit or considerably restrict customers from accessing their business premises as a result of the restrictions. For full details of the cost and reach of the CRSS to date, please see here.

Revenue issued an eBrief to confirm that the contents of the Tax and Duty Manual Part 05-02-01 - List of Flat-Rate Schedule Expenses - is no longer relevant. The list of the current Flat-Rate Expenses is available on the Revenue website.