Tax UK

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.   The Chancellor of the Exchequer has suggested he will be holding a mini “fiscal event” in early July  The Coronavirus Large Business Interruption Loan Scheme has increased the size of the loans on offer  HMRC has announced a five-month delay to the introduction of the domestic reverse charge for construction services, due to the impact of the coronavirus pandemic on the construction sector, and the VAT change will not now apply until 1 March 2021  The Small Business Commissioner provides late payment support and continues to do so throughout the pandemic   

Jun 08, 2020
Tax UK

If your clients have outstanding disguised remuneration loans that are subject to the Loan Charge, they must report the details of their loans by 30‌‌ September 2020. Agents can do this for clients using the online form or they can complete it themselves.  The online form to report disguised remuneration loans has now been updated so that taxpayers can make an election to spread their outstanding loan balance evenly across three years. The three tax years that loans will be spread across are 2018-19, 2019-20 and 2020-21. The deadline to make an election to spread any outstanding disguised remuneration loan balances is currently 30‌‌ September 2020 (subject to potential amendment as a result of the Finance Bill – see later). Please be aware that once an election is made it cannot be withdrawn.  The form should be complete and accurate to the best of your client’s knowledge. The form can be used to:  report an outstanding loan balance for the first time;   resubmit information to correct inaccuracies in a previous form; and  make an election to spread the loan charge balance.  If a form has already been submitted on behalf of your client, and the information provided at the time was complete and accurate to the best of their knowledge, they have met their statutory obligation. They are not required to submit another form, even if the outstanding balance has changed following the loan charge review. However, the form must be used to make an election to spread a loan balance. The form allows an individual to make an election without the need to resubmit information previously provided.  If your client does not wish to elect to spread their loan charge balance, but the balance subject to the loan charge has now changed following the review, the new form can be used to provide the updated loan balance.  If you need a paper copy of the form, you can call 03000 599110 to ask for one.  HMRC encourages anyone who thinks they may have difficulties paying what they owe to get in touch, and they will consider their individual circumstances and work with them to agree an affordable payment plan. Please advise anyone with concerns to call HMRC on 03000 599110 or email ca.loancharge@hmrc.gov.uk.  Readers are also advised that amendments have been tabled in relation to the loan charge rules arising from the potential impact of COVID 19. If enacted by Parliament, these amendments will allow HMRC to:  extend the deadline for an election to be made to split the loan charge over three years; and   extend the disapplication of interest in respect of liabilities. 

Jun 08, 2020
Tax UK

Read the latest on the trust registration service in the May 2020 update.   

Jun 08, 2020
Tax

The Platform for Collaboration on Tax (PCT) has released a Toolkit on the Taxation of Offshore Indirect Transfers. The Toolkit provides guidance on design and implementation issues when one country seeks to tax gains on the sale of interests in an entity owning assets located in that country, by an entity which is a tax resident in another country.   The Toolkit addresses a particular concern of developing countries, primarily from the perspective of the country where the underlying assets are located. It covers the taxation of the indirect transfer of assets such as mineral rights and other assets generating location specific issues such as licensing rights for telecommunications, which has been the subject of protracted public interest. This topic is a concern in many developing countries, magnified by the revenue challenges that governments around the world face as a consequence of the COVID-19 crisis.    According to the OECD, the significance of this issue was recognised in the development of the OECD led Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). The MLI includes a provision based upon the OECD and UN model tax conventions, for purposes of extending the reach of existing tax treaties to allocate rights to tax such indirect transfers to location countries, should treaty partners so choose.  For more information read the OECD’s update.  

Jun 08, 2020
Tax

Thailand has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention). It is the 137th jurisdiction to sign the Convention.   The Convention enables jurisdictions to engage in a wide range of mutual assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It aims to provide extensive safeguards for the protection of taxpayers' rights.  The Convention is the instrument for the implementation of the Standard for Automatic Exchange of Financial Account Information in Tax Matters (CRS). The CRS enables more than 100 jurisdictions to automatically exchange offshore financial account information.   For more information read the OECD’s update. 

Jun 08, 2020
Tax UK

  This week, in Irish stories, read details of the Temporary Wage Subsidy Scheme’s extension to maternity and adoptive leave employees. In UK developments, details of changes to the Job Retention Scheme, which take effect from 1 July 2020, were recently announced. In International news, the OECD says tax administrations have an important role in planning the recovery from the impact of COVID-19.      Ireland Temporary Wage Subsidy Scheme now applies to maternity and adoptive leave employees. Read more The rate of expense relief has increased for kidney patients for 2019 and 2020 UK Take a look at the Job Retention Scheme changes set to take affect from 1 July 2020 Are you planning to defer your next VAT payment due on 7 June? Read what action you need to take in order to do so International The OECD says tax administrations have an important role in planning the recovery from the impact of COVID-19. Read more  

Jun 05, 2020
Tax UK

The NI Tax Committee regularly engages with the Law Society of NI on matters of common interest. Recently the Law Society shared with us two documents which may be of interest to members:- Guidance on the execution of wills during the pandemic; and The First-tier Tribunal (Tax Chamber) COVID-19 response to reports of Delays etc.

Jun 02, 2020
Tax UK

Last week, the Chancellor announced plans to extend the Self-Employment Income Support Scheme (“SEISS”) for anyone self-employed whose trade is, adversely affected by COVID-19. Eligible self-employed people will be able to claim a second and final SEISS grant in August 2020. This will be a taxable grant worth 70 per cent of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total. The eligibility criteria for the second grant will be the same as for the first grant. In addition, people do not need to have claimed the first grant in order to claim the second. Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July 2020. Eligible self-employed must make a claim before that date to receive the first SEISS grant (a taxable grant of 80 per cent of their average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £7,500 in total). It's really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves. If you attempt to make a claim on behalf of your client, this will trigger a fraud alert and will result in significant delays to payment. However, you can help to prepare your clients by ensuring they have the relevant information ready. Once again, HMRC will calculate the amount of self-employment support individuals will receive, they don’t need to do this themselves. More information about the second SEISS grant will be available on GOV.‌‌UK on 12‌‌ June. In the meantime, please help reach those self-employed people who could benefit from a SEISS grant now, by encouraging anyone you think might be eligible for the first grant but hasn’t yet made a claim to do so before 13‌‌ July.  

Jun 02, 2020
Tax UK

Readers are advised to ensure they are using the latest coronavirus job retention scheme (“CJRS”) guidance. Bookmark the relevant links and print a copy of the guidance which applied at the time a claim for the CJRS grant is made. Details of last week’s guidance updates received from HMRC are set out. Page title Changes made 1 Check if your employer can use the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Removed outdated text on the extension of the scheme. 2 Check if you can claim for your employee's wages through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Removed outdated text on the extension of the scheme. 3 Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Added further detail on what duties pension trustees can undertake whilst on furlough. Added detail on CJRS eligibility in cases where TUPE would have applied were it not for the company being in compulsory liquidation. 4 Work out 80 per cent of your employees' wages to claim through the Coronavirus Job Retention Scheme' Added headline box that reflects key points from Chancellor’s announcement last week. 5 Examples for ‘Work out 80 per cent of your employees' wages to claim through the Coronavirus Job Retention Scheme’ Errors in example 1.5 corrected Error in example 1.6 corrected Errors in example 3.3. corrected 6 Claim for wages through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. 7 Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week.

Jun 02, 2020
Tax UK

With the next VAT deadline date of 7 June 2020 fast approaching, we remind readers of the process for those who wish to utilise the COVID-19 VAT payment deferral announced by the Chancellor in March. There's no need to apply for a deferral BUT: You are still required to file a return through the normal route, including Making Tax Digital if applicable; and Direct Debit payers will need to cancel their direct debit with their banks. If they don’t HMRC will still request payment. There is no automatic deferral of Direct Debit payment. The GOV.UK guidance is here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19  

Jun 02, 2020
Tax UK

Last week, the Chancellor announced more details on the expected changes to the coronavirus job retention scheme (“CJRS”) and also announced that the flexibility element would begin from 1 July 2020, and not 1 August 2020 as announced a few weeks ago. The changes announced are as follows: - Part-time furloughing - from 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working Employer contributions - from 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff. This employer contribution will gradually increase in September and October; and The scheme will close to new entrants from 30‌‌ June. Part-time furloughing From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the Government continuing to pay 80 per cent of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced and is aimed at helping people get back to work. Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they must furlough staff for. Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules. Employer contributions From August, the CJRS grant provided through the scheme will be slowly tapered. The timeline for the next few months is as follows:-   in June and July, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 in addition to employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work and is on furlough. Employers will have to pay employees in the usual way for the hours they work; in August, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5 per cent of the gross employment costs that they would have incurred if the employee had not been furloughed; in September, the Government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10 per cent of wages to make up 80 per cent of the total up to a cap of £2,500; and in the final month of the scheme in October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20 per cent of wages to make up 80 per cent of the total up to a cap of £2,500 the cap on the furlough grant will be proportional to the hours not worked. According to the guidance provided by HMRC, many smaller employers have some or all of their ER NICs bill covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the Government contribution. Around a quarter of CJRS monthly claims relate to wages that are below the threshold where ER NICs and auto enrolment pension contributions are due, hence o no employer contribution will be required for these furloughed employees in August. Important dates It’s important to note that the scheme will close to new entrants from 30‌‌ June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June. This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌ June in order that the current three-week furlough period be completed by 30‌‌ June. Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June 2020. Guidance and support Further support for employers and agents on how to calculate claims with this extra flexibility will be available by next week, including webinars and detailed online guidance.  

Jun 02, 2020
Tax RoI

Updated instructions to Revenue staff dealing with claims by taxpayers under the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union are new reflected in Tax and Duty Manual Part 38-04-13. A taxpayer may seek to invoke the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union in the course of his or her dealings with Revenue. The claim may be about process or about the law.  The High Court, the Court of Appeal or the Supreme Court may make a declaration that a statutory provision or rule of law is incompatible with the State’s obligations under the European Convention On Human Rights.

Jun 02, 2020