Readers are reminded that claims for the first grant under the self-employed income support scheme (“SEISS”) must be made by next Monday 13 July.   Claims for the second grant are expected to open in August 2020. In order to qualify for the second SEISS grant, the business must be adversely affected by the coronavirus pandemic on or after 14 July 2020. HMRC has recently updated their guidance on the meaning of this. Anyone seeking to make a claim should review this guidance before applying and consider carefully if their circumstances qualify.   HMRC has also recently updated the guidance for the SEISS to confirm an extension of eligibility. This extension affects self-employed parents who did not submit a tax return for 2018/2019, or whose trading profits in 2018/19 were less than their other income, and were therefore ineligible for the SEISS, because they were taking time out of their trade to care for their new-born or newly adopted child (i.e. within 12 months of the birth of the child or within 12 months of an adoption placement).  Such individuals will be able to claim for the SEISS, as long as they meet the other standard eligibility criteria, using either their 2017/18 or both their 2016/17 and 2017/18 self-assessment returns as the basis for their eligibility and grant calculation. Those who have become eligible can make a claim for the first SEISS grant, the second SEISS grant, or both (depending on when their businesses may have been adversely affected by the pandemic) when applications for the second grant open in August.    This is an amendment to bring these individuals into eligibility for the scheme. It does not affect the grant calculation for those who submitted a 2018/19 return and were already eligible.  The extension complements the Government confirming recently that parents on statutory maternity and paternity leave who return to work in the coming months after a long period of absence will be permitted to be furloughed under the job retention scheme.    

In recent discussions with HMRC, we once again raised the issue of Northern Ireland ID verification issues and the inability of agents to make SEISS claims on behalf of clients. HMRC has confirmed that agents will not be able to make claims for clients when the second grant opens for applications next month.   However, we understand the issue with Northern Ireland ID verification using a Northern Ireland driving licence to set up a Government Gateway ID has now been resolved. Should taxpayers still not be able to set up a Government Gateway ID they must apply for the SEISS by phone.   The rational for agents not being able to apply for the SEISS scheme on behalf of clients is that the SEISS scheme is short lived. According to HMRC, their resources were better directed to enabling agents to make claims under the job retention scheme which runs for a longer period until 31 October 2020 and became much more complex with the introduction of flexible furloughing from 1 July.   

Did your business or a client’s business decide to defer a VAT liability due for payment between 20 March 2020 and 30 June 2020? If this is the case and the business pays its VAT liability by direct debit it will be important to ensure that the direct debit is reinstated for future VAT payments including any VAT payment falling due tomorrow 7 July 2020 for the VAT return period ending 31 May 2020.     

The OECD has released a new global tax reporting framework, the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy ("MRDP"). Under the MRDP, digital platforms are required to collect information on the income earned by those offering accommodation, transport, and personal services through platforms and to report the information to tax authorities.  According to the OECD, the MRDP are designed to help taxpayers comply with their tax obligations, while ensuring a level-playing field with traditional businesses, in key sectors of the sharing and gig economy. They seek to avoid a proliferation of different and unilateral reporting regimes, allow for the use of technology solutions and help create a sustainable environment supporting the growth of the digital economy.  For more information read the OECD’s update.  

Today, Monday 6 July 2020, is the deadline for submitting all 2019/20 P11D(b) and P11D forms and the employee must receive their copy of the P11D. It is also the deadline for online reporting of 2019/20 annual returns in respect of employment related securities.  Later this month the deadlines are as follows for payment of class 1A National Insurance (NIC):-  19 July 2020 - deadline for non-electronic payment of Class 1A NIC for 2019/20; and  22 July 2020 - deadline for electronic payment of Class 1A NIC for 2019/20.  The June 2020 Employer Bulletin advises that “2013” (with no gaps between the characters) should be added to the end of the 13 character PAYE accounts office reference number when making Class 1A NIC payments. According to the Bulletin, this will help ensure HMRC correctly allocates Class 1A NIC payments made by employers.   The “20” denotes to HMRC that the payment is for the tax year ended 2019/20; the “13” lets HMRC know that the payment is for Class 1A NIC as reported on form P11D(b). 

In a recent update published by the OECD on the fight against offshore tax evasion, it outlined that nearly 100 countries carried out automatic exchange of information in 2019, enabling their tax authorities to obtain data on 84 million financial accounts held offshore by their residents, covering total assets of EUR 10 trillion.   This is a significant increase on 2018 where information on 47 million financial accounts was exchanged, representing EUR 5 trillion. The growth stems from an increase in the number of jurisdictions receiving information as well as a wider scope of information exchanged.  The increase in exchanged information stems from the Common Reporting Standard requires countries and jurisdictions to exchange financial account information from non-residents obtained from their financial institutions automatically on an annual basis, reducing the possibility for offshore tax evasion.   For more information read the OECD’s update. 

The Platform for Collaboration on Tax (PCT), a joint initiative of the IMF, OECD, UN and World Bank Group, is seeking feedback on a draft Toolkit designed to help developing countries build capacity in tax treaty negotiations.   The Draft Toolkit describes the steps involved in tax treaty negotiations, such as how to decide whether a comprehensive tax treaty is necessary, how to prepare for and conduct negotiations, and what follow-up measures to take after negotiations. Interested parties are asked to provide comments on the discussion draft of the Toolkit until 10 September 2020. 

HMRC’s CJRS guidance has been updated since last week. Members can visit our dedicated UK Coronavirus Job Retention Scheme (“CJRS”) page, which provides guidance on the scheme. Download our factsheet on the who, what, where, when and why of the scheme.   A number of the pages in HMRC’s CJRS guidance have been tweaked and the ‘call box’ text has been updated to say the following:-  You can now submit claims for periods starting on or after 1 July.   31 July is the last day that you can submit claims for periods ending on or before 30 June.  New functionality was also added to the CJRS online portal last week which allows employers to delete a claim up to 72 hours after they have made it (i.e. if a mistake has been made). In support of this a minor update has been made to the guidance to include some new wording flagging that this is an option available. This text is included in the ‘if you make an error when claiming’ sub section which is also where HMRC sets out the amendments process more generally. If an employer or agent wants to delete a claim in the online service, they must do this within 72 hours.  As Finance Bill 2020 continues to move through Parliament, llegislation introducing HMRC’s powers in relation to coronavirus support payments has been tabled. According to one of the amendments, if passed business will have 90 days to notify HMRC of a grant that needs repayment. 

The European Commission has launched a consultation on a White Paper on foreign subsidies. According to the Commission, subsidies granted by non-EU governments to companies in the EU appear to have an increasing negative impact on competition in the Single Market. The White Paper discusses levelling the playing field as regards foreign subsidies.   The White Paper outlines the different cases involving foreign subsides which includes tax measures such as corporate tax regimes providing selective incentives to a parent company located outside the EU. For more information read the White Paper . Interested parties are asked to respond to the Consultation by 23 September 2020. The Commission will present legislative proposals based on the responses received to the Consultation.   

HMRC has asked us to share the below message regarding Tax credit renewals.  “Tax credits renewals We recently told you that HMRC will automatically renew all tax credits claims this year, apart from those identified as high risk. This means that the majority of customers will have their claim automatically renewed.   What has happened and who is affected  Due to an error, we sent around 1 million customers a tax credits renewal pack (TC603R) that did not include some or all of the income information that we used to calculate their awards.  We are sorry for this omission and for any inconvenience we have caused. We would like to reassure you and your customers that the tax credits payments made since the start of April are correct and based on the information we hold and would normally use at this stage in the tax credits cycle to make provisional payments and renew awards.  This affects the renewals process for tax credits claimants with self-employed income, income from taxable social security benefits, or other income (for instance, income from shares and dividends).  How we’re giving claimants what they need  From 25 June 2020, we’ll be writing to those who are affected by this, setting out all the information they need.   This will be accompanied by other communications, including a message on GOV.UK and a text message to some customers to give them the opportunity to contact us in advance of receiving the letter.   What claimants need to do  To make sure we have paid the correct amount for the award period of 06/04/2019 to 05/04/2020, we need customers to review the total household income we hold for them for the 2019-2020 tax year.   In addition, self-employed customers who have not declared their tax return for the 2019/2020 tax year must estimate their profit or loss and report this with their renewal online or via our webchat service by 31 July 2020. Otherwise, we will finalise their award using the information we hold, and they will not be able to change it at a later date.  If the income details are correct or customers have already contacted us about their income and a self-employed estimate does not need to be given, they don’t need to do anything.   However, they will need to contact us straight away if they disagree with any of the information in the letters or they need to tell us about any changes.   Customers should report changes by completing their renewal:  online, at gov.uk/manage-your-tax-credits,   or through our webchat service by searching ‘tax credits general enquiries’ on gov.uk.”   

The European Commission recently relaxed the definition of “undertakings under difficulty” and job loss as an aid clawback trigger in its General Block Exemption Regulation (GBER).  The Commission also extended the life of current rules for State-aid, including the GBER, which were due to expire at the end of this year.  These measures impact Ireland’s Employment Investment Incentive (EII) scheme, the Start-up Capital Incentive (SCI) and the Start-Up Relief for Entrepreneurs (SURE) which are all subject to the GBER.   Recognising that the scheduled change of State-aid rules including the GBER on 31 December 2020 would bring another element of disruption to businesses across the EU,  the Commission has extended the life of these rules for one to three years depending on the particular rule.  The GBER will continue until 2023.    Certain definitions used in the State-aid rules have also been amended to take account of the economic impact of COVID-19.  The definition of “undertaking in difficulty” is relaxed.  This definition features as part of the GBER which impact’s Ireland’s EIIS, SCI and SURE.   See the Commission’s press release for more details.   

HMRC continue to hold a number of webinars covering various COVID-19 business supports. These have a limited number of spaces, so save your place now.  Extension to the Coronavirus Job Retention Scheme and flexible furloughing: Choose a date and time  This will take you through the changes, flexible furloughing, claim periods and key dates.   Coronavirus (COVID-19) Statutory Sick Pay Rebate Scheme: Choose a date and time  This webinar will take you through the latest on who can claim, who you can claim for, how to make a claim, what you may be entitled to, and more.  Coronavirus (COVID-19) – Self-Employment Income Support Scheme (SEISS): Choose a date and time  This webinar will look at the aim of the scheme, who can apply, how much may be claimed, applying for the scheme, what happens after applications are made, and other support available.