HMRC Stakeholder Digest – 20 September 2021

Please see the following message which we are sharing on behalf of HMRC:

This HMRC Stakeholder Digest provides a round-up of our latest news and updates, which we’d be grateful if you could share with your clients, customers or members.

The Government has set up a dedicated support page where businesses can find the right support, advice and information to help with the impact of coronavirus (COVID-19).

Measuring tax gaps: 2021 edition

We have published our ‘Measuring tax gaps: 2021 edition’, which confirms the tax gap - the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid - for 2019-20. The full report is now available on GOV.UK.

The tax gap is estimated at 5.3%, or £35 billion in cash terms, an increase from 5.0% (£33 billion) in 2018-19. The report shows that HMRC collected almost 95% of all the tax due (£674 billion) under the law in 2019-20. This highlights how the vast majority of customers are paying the correct amount of tax, which is essential to fund our vital public services, such as the NHS.

Tax gap estimates are reviewed each year to reflect updated data and methodologies. This is best practice and, as in previous publications, we are transparent about the scale of, and reasons for, the revisions (in both directions) to the tax gap, which are set out in ‘Measuring tax gaps: 2021 edition’.

For this reason, it’s best to focus on the trend in the results rather than the absolute numbers when interpreting findings. 

There is a long-term downward trend in the tax gap, falling from 7.5% in 2005-06. Between 2016-17 and 2019-20 the overall percentage tax gap has remained relatively stable.

Any impact of the COVID-19 lockdown and economic downturn on the tax gap is likely to be seen in the tax year 2020-21 in ‘Measuring tax gaps 2022’ edition. In ‘Measuring tax gaps 2021’ there is no material impact.

HMRC’s tax gap estimates are official statistics produced in accordance with the Code of Practice Statistics which assures objectivity and integrity. The methodology has been intensively reviewed and given a clean bill of health by the International Monetary Fund (IMF) and reviewed by the Office for Statistics regulation (OSR).

For the first time we have published an uncertainty rating for each component of the tax gap.  The number of individual components where HMRC has published ranges of the tax gap has also been extended.

We publish the tax gap because we believe it’s important to be transparent in our work.  HMRC is one of only two revenue authorities in the world that measures and publishes the tax gap, covering both direct and indirect taxes, every year.

We hope you find this information useful. Should you have any queries about the latest tax gap estimates, please do get in touch by email at [email protected].

Submit your CJRS claims for September

Final CJRS claims for September can now be submitted and must be made by Thursday ‌14‌‌ ‌ October.

Employers can claim 60% of furloughed employees' usual wages for the hours not worked, up to a cap of £1,875 per month per employee. They’ll need to contribute 20% from their own funds so that furloughed employees continue to be paid at least 80% of their usual wages in total, for the hours they do not work (up to a cap of £2,500 a month).

What employers need to do now 

• prepare for the scheme closing on 30 September
• work out how much they can claim, and the contribution they’ll need to make to reach 80% of usual wages on GOV.UK
• submit any claims for September, no later than Thursday 14 October
• keep records supporting the grants they claim, in case we need to check them
• make sure they continue paying CJRS-related employee tax and National Insurance contributions to HMRC, and contact us if they’re struggling to pay.

Preparing for the end of the CJRS- frequently asked questions

As the CJRS closes on 30 September, employers will be thinking about next steps for their employees and their business.

They can find everything they need to know about the CJRS on GOV.UK, and here are some answers to our most frequently asked questions:

What should employers do when the scheme closes? 

Employers will need to:

• bring their employees back to work on their agreed terms and conditions, or
• agree any changes to their terms and conditions with them, or
• consider ending their employment. 

When making decisions about how and when to end furlough arrangements, equality and discrimination laws will apply in the usual way. You can find more information on GOV.UK.

Can employers claim CJRS for employees on notice periods?

Employers cannot claim CJRS grants for any days an employee is serving a contractual or statutory notice period, including notice of retirement, resignation or redundancy. 

What support is available for employees if they’re unable to return to work?

There’s UK Government support available for employees through the JobHelp website, offering a range of support, training and advice, to help people find their next opportunity. This includes the Kickstart scheme and other Plan for Jobs support measures, along with advice on learning new skills and finding who’s recruiting.

Normal redundancy rules and protections apply to furloughed employees. 

What support is available to help businesses grow after the CJRS has closed?  
 
If an employer is looking to grow their business, the UK Government Help to Grow scheme offers management and digital programmes, to help them learn new skills and reach more customers.

If employers are considering taking on new employees, there’s a range of UK Government support available to help them, including placements, apprenticeships and training opportunities.

What if an employer has claimed too much in error?

If an employer has claimed too much CJRS grant and has not already repaid the overclaimed amount, they can repay as part of their next online claim without needing to call us. If they claimed too much but do not plan to submit further claims, they can let us know and make a repayment online through our card payment service or by bank transfer.

Employers must tell us and repay the money by the latest of whichever date below applies below:

• 90 days from receiving the CJRS money they’re not entitled to
• 90 days from the point circumstances changed so that they were no longer entitled to keep the CJRS grant.

If they don’t do this, they may have to pay interest and a penalty as well as repaying the excess CJRS grant.

What if an employer hasn’t claimed enough?

If an employer made a mistake in their claim that means they received too little money, they’ll need to amend their claim within 28‌‌ ‌calendar days after the month the claim relates to – unless this falls on a weekend or bank holiday, where the deadline is the next weekday. The deadline to amend claims for August is Tuesday‌‌‌ 28 September.

To find out how, go to get help with the Coronavirus Job Retention Scheme on GOV‌‌‌.UK.

Self-Employment Income Support Scheme (SEISS)

Ahead of the 30 September deadline to claim the fifth and final Self-Employment Income Support Scheme (SEISS) grant, here are the latest updates for eligible customers. 

Preparing turnover figures for the fifth SEISS grant

The majority of customers applying for the fifth SEISS grant need to tell us their turnover for the:

• ‘reference period’ (this needs to be based on a 12 month period, including the total turnover for all of their businesses, and in most cases can be taken from the 2019-20 or 2018-19 tax return); and the
•  ‘pandemic period’ (a 12 month period which starts on any date from 1 April to 6 April 2020).

We will use these figures to work out how much grant they will receive.

We have published guidance to help them in preparing their figures:

• GOV.UK guidance
• YouTube video

Delays to processing 2020-21 Self Assessment tax returns

We previously let you know about a delay to processing some 2020-21 tax returns where SEISS grants have not been reported in the way we expected.  We have now corrected all of the affected returns submitted before 19 June, and continue to correct the SEISS grant amounts included in 2020-21 Self Assessment returns submitted after that date.

There is a small number of return amendments, received before 19 June, which still need processing. We expect these to be completed by the first week of October and are sorry for any inconvenience caused by the delay. 

We’ll contact customers if we correct their return, and depending on the changes made, they may need to take further action. It’s important to check any adjustment or statement of account to make sure the changes are accurate, otherwise the customer might be taxed twice for their SEISS grant. 

If customers receive a statement of account and need to make further amendments to their return, they can find guidance on how to do this. Authorised agents can call us on their client’s behalf to make any necessary changes.

Further support for customers with debt

We continue to support customers with debts who get in touch with us, and can help with payment plans or accessing services such as our Self Assessment Self Service Time to Pay. Please encourage customers to get in touch if they’re struggling to pay.

Final claims for the Statutory Sick Pay Rebate Scheme  

The Statutory Sick Pay Rebate Scheme closes on 30 September 2021. Employers have until 31 December 2021 to submit any final claims, or to amend claims they have already submitted.  

As a reminder, an employer with fewer than 250 employees who has paid Statutory Sick Pay (SSP) to employees for sickness absence or self-isolation that was coronavirus-related until 30 September could be eligible for support. Employers can make claims themselves, or speak to their tax agent about making claims on their behalf. The repayment can cover up to two weeks of the applicable rate of SSP.   

Information on eligibility and how to make final claims for Statutory Sick Pay can be found on GOV.UK.

Government sets out pragmatic new timetable for introducing border controls

On 14 September, the Government announced that full customs declarations and controls will still be introduced as planned on 1 January 2022. This means that all importers will have to make their customs declarations in real time as they import their goods, or under existing authorisations.

Safety and security declarations for imports from the EU will now be required by 1 July 2022 instead of 1 January 2022. Phytosanitary Certificates and physical checks on SPS goods at Border Control Posts, due to be introduced on 1 October 2021 will not now be required until 1 July 2022.

Further details can be found on GOV.UK.

Christmas shoppers warned not to get caught out with extra charges

With less than 100 days to go until Christmas, HMRC is urging shoppers to ensure they don’t get caught out by unexpected charges when buying from overseas traders.

Changes introduced on 1 January this year mean that some UK consumers buying presents for family and friends from EU businesses may now need to pay customs charges when their goods are delivered.

In the same way that consumers have previously had to pay charges when buying certain items from non-EU sellers, the same rules now also apply to goods being bought from the EU.

The Government has published easy to follow guidance for consumers to help everyone to understand the changes and when, why and how charges will need to be paid.

Find out more about the new rules by checking on GOV.UK.

Consumers can also find information on what may be required when sending or receiving items from friends and family living abroad.

One-off £500 payment for eligible working households receiving tax credits

As part of the Spring 2021 Budget, the Chancellor announced a one-off £500 payment to support working households receiving tax credits. Approximately 1.4m households received this payment in April.

There are around 6,500 customers who, based on the information we held at the time, were not eligible for the payment but now are as the scheme has been extended, and these customers have finalised their tax credits award. This is not a new support scheme. Customers will receive their £500 payments by the end of September. We will be writing to them and they do not need to do anything to receive the payment.

We have provided some further information for you below, in case you’re asked for support:

• Customers do not need to do anything to receive the payment – it will be paid automatically by the end of September into the same bank account that their tax credits are usually paid in to. If they receive Child Tax Credit, it will be the account their Child Tax Credit is paid to.
• Messages we send to customers will not include a link. We’d appreciate your help in reminding customers to stay vigilant about scams.
• This one-off £500 payment is not a payment of tax credits and is not part of a customer’s tax credits award. 
• The customer will not need to pay Income Tax or National Insurance on the £500 payment. They do not need to declare it as income for Self Assessment tax returns or for tax credit claims and renewals, and it will not affect their benefits.

HMRC warns students about scams

Higher numbers of students enrolling at university this year means more young people taking on part-time jobs. Being new to dealing with HMRC and unfamiliar with genuine contact from the department could make them vulnerable to scams, HMRC is warning.

In the past year almost 1 million people reported scams to HMRC. Nearly half offered fake tax refunds, which HMRC does not offer by SMS or email. The criminals are usually trying to steal money or personal information to sell on to others.

Between April and May this year, 18 to 24-year olds reported more than 5,000 phone scams to HMRC.

Mike Fell, Head of Cyber Security Operations at HMRC, said:

“Most students won’t have paid tax before, and so could easily be duped by scam texts, emails or calls either offering a ‘refund’ or demanding unpaid tax.

“Our advice is to be wary if you are contacted out of the blue by someone asking for money or personal information. We see high numbers of fraudsters contacting people claiming to be from HMRC. If in doubt, our advice is – do not reply directly to anything suspicious, but contact HMRC through GOV.UK straight away and search GOV.UK for ‘HMRC scams’.”

New Financial Secretary to the Treasury appointed

Following the latest Government appointments, The Rt Hon Lucy Frazer QC MP has been appointed Financial Secretary to the Treasury.

The Prime Minister has confirmed that The Rt Hon Rishi Sunak MP remains Chancellor of the Exchequer.

It has also been confirmed that Simon Clarke MP has been appointed Chief Secretary to the Treasury and Helen Whately MP has been appointed Exchequer Secretary to the Treasury.

COVID-19 Response: Autumn and Winter plan 2021

The Government has published the COVID-19 Response: Autumn and Winter plan 2021, setting out its strategy for managing COVID-19 during the autumn and winter period.

Our successful vaccination programme has allowed the country to get back to a more normal life and is estimated to have saved at least 112,000 lives so far.

Over 92 million doses have now been administered and more than 80% of all over-16s have been jabbed.

We must remain vigilant as COVID-19 has not gone away.

The Government has a plan to contain the virus and protect our NHS from unsustainable pressures while reducing the impact on lives and livelihoods.

The Government’s plan includes:

1. Building our defences through vaccine and treatments
2. Identifying and isolating positive cases to limit transmission 
3. Supporting the NHS and social care
4. Advising people on how to protect themselves and others.
5. Pursuing an international approach: helping to vaccinate the world and managing risks at the border. 

There is evidence that vaccine protection can reduce over time, so there will be a vaccine booster campaign from next week for those at greatest risk. This booster vaccine for the most vulnerable, will be for those aged over 50, frontline NHS and care workers.

Anybody with symptoms should self-isolate and can still get a free PCR test and the Government will continue to provide access to free lateral flow tests.

Alongside these measures, it is vital that we all continue to take steps to protect ourselves and others from COVID-19. By practising safer behaviours and actions we can continue to protect ourselves and others and help stop the virus spreading.

• Our first line of defence is vaccination - so get vaccinated if you have not done so already.
• Meeting outdoors is safer. If you are meeting indoors, ensure fresh air can circulate the room. 
• Wear a face covering in crowded and enclose settings where you come into contact with people you do not normally meet
• If you are not feeling well and have COVID symptoms, self isolate and take a test
• Try to stay at home if you are feeling unwell
• Wash your hands regularly to help limit the spread of COVID-19
• Download and use the NHS COVID-19 App

To learn more about keeping communities safe during autumn and winter, please register to attend a Cabinet Office and NHS Test & Trace webinar on Monday 20th September, 3.00pm - 4.00pm.

Thank you for your continued support. Together we can get back to a more normal life and reduce the impact of COVID-19 on all our lives.

Heroes of Net Zero competition

The UK Government’s Together for Our Planet campaign is teaming up with BT, NatWest and SSE to launch the Heroes of Net Zero competition to find the UK’s best small businesses taking innovative steps to cut greenhouse gas emissions.

The best entries will be invited to attend the COP26 international climate change summit in Glasgow on November 2, where the winners will be announced and receive an exclusive prize package worth £4,500:

• 21 hours consultancy with an Energy Manager and one-year free access to ‘Business Energy Intelligence’ energy management platform, worth £3,500, from SSE;
• Six hours of bespoke mentoring with a NatWest Enterprise Manager from its Climate Accelerator programme, helping winning businesses gain climate friendly skills in accessing new markets to attracting talent, and;
• Up to £1,000 in vouchers to access a brand-new digital advertising support package from BT to grow your business

To take part in the Heroes of Net Zero competition, entrants must tell us in 200 words the exciting measures they have taken on the journey to net-zero. Reaching net-zero means the amount of greenhouse gases your business produces is no more than the amount taken away, eliminating all negative impact on the planet. Submissions can be made via an online form at the competition website.

The competition is open for entries from Thursday 9 September until October 6, with judging happening during the week of October 11.

The competition is open to businesses across the United Kingdom with fewer than 50 employees, the competition will be split into two categories:

• Micro businesses – 1-9 employees
• Small businesses – 10-50 employees

In order to enter the competition, businesses must first make a commitment at the UK Business Climate Hub to achieve net zero by 2050, in line with the Government’s own climate commitment.

The shortlist and winners in each category will be selected by judges Andrew Griffith MP, the UK’s Business Net Zero Champion, James Close from NatWest Group, Gabrielle Giner from BT, and Marta Smart from SSE.