SEISS grant 5, upcoming CJRS deadlines, CJRS guidance changes, a reminder of the changes to the CJRS from 1 July, VAT deferral and VAT option to tax temporary changes and the Statutory Sick Pay rebate scheme all feature this month.

In addition, after pausing much of its debt collection activities due to the pandemic, HMRC has resumed these activities and has published a policy paper setting out its approach. The Institute is in discussions with HMRC regarding the collection of tax debt and would welcome members feedback to leontia.doran@charteredaccountants.ie.

SEISS grant 5

Eligible taxpayers are now able to make claims for SEISS grant 5 after the online claims service opened in late July. From mid-July, HMRC has been contacting taxpayers who may be eligible to let them know their earliest personal claim date and to ensure they are aware of the need to calculate turnover for most claimants.

Find out if a claim is possible by checking all criteria in stages 1, 2 and 3 are met including the turnover test which will be required to be met by most taxpayers. This test considers how much turnover has gone down by in the 2020/21 tax year due to the pandemic. The guidance on the turnover test has also been updated recently.

Taxpayers who were not eligible for SEISS grant 4 will not be eligible for SEISS grant 5 as HMRC is using the same tax returns to determine eligibility for both grants.

HMRC are stressing that taxpayers do not need to submit their 2020/21 Self-Assessment tax return at this time, even though the taxpayer is being asked for their 2020/21 turnover. Once again, agents will not be able to apply for SEISS grant 5 on behalf of their clients.

HMRC has also begun contacting some taxpayers who may be eligible for SEISS grant 5, if they started trading in 2019/20, to verify their identity. HMRC is asking taxpayers for one form of identity and three months’ worth of bank statements from the 2019/20 tax year. To confirm the contact is genuine, taxpayers can go to HMRC trusted contacts on GOV.UK.

The CJRS

The deadline to submit CJRS claims for periods in July 2021 is Monday‌‌ ‌16‌ August 2021, unless reasonable excuse is available for late submission. Amendments to July 2021 CJRS claims must be made by Tuesday 31 August 2021.

Changes from 1 July 2021

From Thursday 1 July 2021, CJRS grants only 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 reduces to 60 percent of employees’ usual wages up to a cap of £1,875.

Employers need to pay the 10 percent difference in July (20 percent in August 2021 and September 2021), 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.

The employer contribution is a condition of applying for the grant; not paying this means the employer will need to repay the whole of the CJRS grant and they may not be able to claim for future CJRS grants.

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.

Guidance changes

The CJRS guidance was updated recently as follows:-

VAT option to tax

The guidance on notifying a VAT option to tax on land and buildings has been updated to advise that the temporary extension to the time limit to notify an option to tax to 90 days and not 30 days ended from 31 July 2021. The extension from 30 days to 90 days applies to decisions made between 15 February 2020 and 31 July 2021.

VAT deferral potential penalty

The VAT deferral new payment scheme was available to businesses who deferred VAT due between 20 March 2020 and 30‌‌ ‌June‌‌ ‌2020. This scheme closed on Monday 21‌‌ ‌June‌‌ ‌2021.

Failure to make payment of the deferred VAT in full or to have made an arrangement to pay by Wednesday 30 June 2021 may result in a 5 percent penalty, according to the guidance.

Statutory Sick Pay Rebate Scheme

The statutory sick pay (“SSP”) rebate scheme continues to provide financial support to small and medium-sized employers. Employers with fewer than 250 employees who have paid SSP to employees for COVID-19 related sickness absence may be eligible for support. Any repayment of SSP covers up to two weeks of the applicable rate of SSP. For more information on eligibility and how to make a claim, check the guidance.