Upcoming CJRS deadlines and the next VAT deferral deadline feature this month.

The CJRS

The deadline to submit CJRS claims for periods in June 2021 is expected to be Wednesday 14 July 2021, unless reasonable excuse is available for late submission. However readers are advised that there is some suggestion that the deadline for making CJRS claims will be extended to 17 days. Currently amendments to CJRS claims must be made within 28 days of the relevant month end.

The UK Government will continue to pay 80 percent of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June 2021.

Conditions of claiming CJRS grants

Employers are reminded that for the months of May and June they must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of applying for the grant, so not doing so will mean they’ll need to repay the whole of the CJRS grant and they may not be able to claim for future CJRS grants.

Changes from July

From 1 July 2021, CJRS grants will cover 70 percent of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August 2021 and September 2021, this will then reduce to 60 percent of employees’ usual wages up to a cap of £1,875.

Employers will need to pay the 10 percent difference in July (20 percent in August and September), so that they can continue to pay their furloughed employees at least 80 percent of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. Employers continue to be required to pay the associated employee tax and National Insurance contributions to HMRC in these months.

For the hours not worked employers can continue to choose to top up their employees’ wages above the 80 percent level or cap for each month, at their own expense.

Furloughing flexibly

Employers don’t need to place all their employees on full furlough. They can use the CJRS flexibly to bring their employees back to work for some of their usual hours. Employers can claim for a portion of their usual wage costs for the hours spent on furlough.

SEISS grants

SEISS Grant 4 applications closed on Tuesday 1 June 2021. More information on SEISS grant 5 and its opening date is expected to be available soon.

Amending tax returns – do you need to pay back some or all of a SEISS grant?

If a self-employed individual makes an amendment to their Self-Assessment (“SA”) return on or after 3 March 2021, they need to check if their eligibility for the SEISS grant has been affected. This new requirement applies to claims for SEISS Grants 4 and 5 only, and amendments made on or after 3 March 2021 to SA returns for tax years between 2016/17 and 2019/20 inclusive.

You must tell HMRC within 90 days if there is an amendment to any of your tax returns on or after 3 March 2021 which either:

• reduces the amount of Grant 4 you’re eligible for; or
• causes you to no longer be eligible for Grant 4.

Taxpayers will then need to pay back some/all of the grant. If you do not tell HMRC within 90 days of submitting the amendment, or receiving payment of the grant (whichever is later), you may also have to pay a penalty.

Taxpayers do not need to tell HMRC if their grant has lowered by £100 or less. If a taxpayer is unsure, they can still tell HMRC about the amendment using the online form.

SA returns can only be amended up to 12 months following the filing date, so this time limit will have passed for most returns between 2016/17 and 2018/19, unless they were issued late.

If returns are amended ‘out of time’, this will not change the relevant tax return so will not be taken into account for SEISS grants 4 and 5.

Will receiving a SEISS grant affect future tax returns?

SEISS grants are taxable and are therefore subject to income tax and national insurance. If your clients received any/all of grants 1–3, these should be included in their 2020/21 SA return which must be submitted online by 31 January 2022. Grants 4 and 5 must be included in 2021/22 SA returns, which should be submitted online by 31 January 2023.

Can taxpayers still claim if they have outstanding SA debt?

As long as they are eligible, taxpayers can still claim the SEISS grant if they have an outstanding debt on their HMRC account from SA.

VAT deferral – next deadline

The VAT deferral new payment scheme is available to businesses who deferred VAT due between 20 March 2020 and 30 June 2020 and still have payments to make, or who were unable to pay in full by 31 March 2021. This includes those on Payment on Account and Annual Accounting schemes. Businesses must apply on or before 21 June 2021 if they want to join the scheme and further defer this VAT.

The later businesses join the fewer instalments are available to them. The final deadline is Monday 21 June 2021 to benefit from making the payment over 8 instalments. Failure to make payment of the deferred VAT in full or to make an arrangement to pay by 30 June 2021 may result in a 5 percent penalty, according to the guidance.