HMRC Stakeholder Digest – 8 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).

Tax changes for Health and Social Care

Today the government has announced tax changes to fund £12 billion a year to be spent on the NHS and social care across the UK.

National Insurance contributions will increase by 1.25% for one year only for employees, employers and the self-employed from April 2022. This will cover both Class 1, (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs.

From April 2023, a new ringfenced Health and Social Care Levy of 1.25% will be introduced which will apply to those who pay Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs and will also be extended to those over State Pension Age who are in work. When the new levy comes into effect, National Insurance rates will revert back to current levels.

The Levy will also apply to individuals above State Pension age with employment income or profits from self-employment above £9,568.

More information can be found on GOV.UK.

Submit CJRS claims for August

If employers haven’t submitted their CJRS claim for August yet, they must do so by the deadline of Tuesday 14 September.

For August and September, 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 

• 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 August, no later than Tuesday 14 September
• 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
• prepare for the scheme closing on 30 September.

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 the most frequently asked questions currently from employers:

What to do when the scheme closes?

Employers will need to:

• bring their employees back to work on their agreed terms and conditions
• 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. Employers can find more information on GOV.UK.

When is the last claim for the CJRS?

The last day that employers will be able to claim for is 30 September. Final claims for September must be submitted by Thursday 14 October.

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 their employer is unable to bring them back 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 sectors which are recruiting.

Normal redundancy rules and protections apply to furloughed employees.

What support is available to help businesses grow after the CJRS has closed?  

If employers are 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.

Self-Employment Income Support Scheme (SEISS)

If customers are eligible for the latest SEISS grant they have until 30 September to apply. A YouTube video is available to help tax agents support their clients through the online service.

Reporting SEISS grants on tax returns

SEISS grants are taxable and subject to National Insurance Contributions (NICs). Eligible customers should report any SEISS grants they received on or before 5 April 2021 on their 2020-21 Self Assessment tax return (filing deadline of 31 January 2022).

For most customers, this means they need to report the first, second and third grants on their 2020-21 Self Assessment if they were paid on or before 5 April 2021. The fourth and fifth grants should not be included in 2020-21 returns, as these were paid after 5 April 2021, and should instead go on their 2021-22 return (filing deadline of 31 January 2023).

Calculating turnover as a member of a partnership

We have been asked about customers who joined a partnership between April 2020 and April 2021. If they are in this situation, they need to work out their percentage share of the partnership’s turnover. It will be the same percentage of profit they took from the partnership in the 12-month period from April 2020 to April 2021. If customers have other businesses, they should add their percentage share of the partnership to the turnover from these.

What not to include when calculating turnover for the fifth grant

Anything reported as ‘any other income’ on tax returns should not be included when calculating turnover for the fifth SEISS grant. This includes things such as Universal Credit, maternity allowances, retirement income and foreign income.

Customers should also not include any previous coronavirus (COVID-19) support payments in their turnover, even though the payments may be taxable when calculating profit. COVID-19 support payments include:

• previous SEISS grants
• Eat Out to Help Out payments
• local authority or devolved administration grants

More information is available on GOV.UK.

Paying back SEISS grants into the right account

We’re noticing an increase in customers using the wrong HMRC bank account when repaying some, or all, of their SEISS grants. Customers should check that they are using the right HMRC bank account information – the details will be in our most recent contact to them about their voluntary repayments.

If the customer was making voluntary SEISS repayments but has since received an Officer’s Assessment from us, they should update their payment method and pay into the HMRC account given on that letter.

Software issue now resolved

From mid-August, some commercial accounting software was recording SEISS grant values incorrectly (this was an issue with an individual income Application Programming Interface (API)). A fix was in place by 31 August and the issue is now resolved.

Making Tax Digital for VAT

The Government has today laid legislation in Parliament to extend Making Tax Digital (MTD) to VAT registered businesses with taxable turnover below the VAT threshold of £85,000, from their first VAT period starting on or after 1 April 2022. This is an important step in extending MTD and progressing the delivery of a modern, digital tax system, supporting the digitalisation of the UK and making it easier for businesses to get their tax right with an improved customer experience.

Working Tax Credit (WTC) – customers need to report changes to their working hours
after September

During the pandemic, WTC customers haven’t needed to tell us about temporary short-term changes to their working hours as a result of coronavirus, as one of several measures HMRC introduced to help those facing uncertainty.

From 30 September 2021, customers should start to tell us about all changes to their hours. We don’t need to know about any temporary arrangements that will end before 25 November, as customers have eight weeks from 30 September to re-establish the normal working hours HMRC currently holds. Customers can check their current WTC claim details online on GOV.UK.

If they're still not back to working their normal hours, they must let HMRC know by 25 November.

Customers should still continue to tell HMRC about any permanent changes to their circumstances within one month – for example if they’re made redundant, lose their job or their hours change permanently during this time.

Any changes can be easily reported online on GOV.UK.

If customers receive tax credits they're not entitled to as a result of a change they'll need to repay this money and may also have to pay a penalty if they don’t let us know within one month. 

Other support

Anyone who is no longer eligible for Working Tax Credit due to a change in their circumstances may be able to apply for other UK Government support, including Universal Credit.  

For those looking to find a new job, there’s government support available through the JobHelp website, offering a range of support, training and advice to help people find their next opportunity. More information can be found on JobHelp and other UK Government Plan for Jobs support on GOV.UK.

HMRC warns charities about scams

HMRC has written to leading charities warning them that tax scams continue to rise and asking them to share cyber and phone scams advice with their communities.

We have seen tax-related scams roughly double during the past year. The pandemic has given criminals a fresh hook for their activity and we’ve detected more than 450 Covid financial support scams alone since early 2020.

The department encourages people to report HMRC branded scams directly to us so that we can gather information to help identify cyber and phone scams and close them down.

HMRC warns people to be careful if they are contacted out of the blue by someone asking for money or personal information. The department sees high numbers of fraudsters emailing, calling or texting people claiming to be from HMRC. If in doubt, we advise people not to reply directly to anything suspicious, but to contact the department straight away and check our guidance on GOV.UK.

HMRC also asks people to search GOV.UK for information on how to recognise genuine HMRC contact. 

HMRC Director of Communications announcement

Poli Stuart-Lacey has announced she will be leaving HMRC after four years as Director of Communications. She will take up her new role as Director of Media and Communications at the Metropolitan Police Service on 1 November 2021.

During her time at HMRC, Poli most recently led on the communications for key Covid support schemes, ensuring millions of people and businesses understood their entitlements and how and when to claim them. This was at the same time as communicating the changes being introduced due to the UK’s exit from the European Union. She has also been a consistent champion for improving and simplifying how HMRC communicates with the public, influencing operational communications as well as the more visible media and marketing delivery.

Poli has been a strong voice for women within both the civil service and the communications profession and was the Diversity and Inclusion lead for the Government Communications Service across Whitehall and Carer’s Champion for HMRC.

Help to Grow: Management

The government-backed Help to Grow: Management course will open the door to growth for thousands of business leaders.

Delivered by leading UK business schools accredited to the Small Business Charter, Help To Grow: Management includes 50 hours of in depth training, 1:1 business mentoring, and the opportunity to grow your business, fast.

The 12-week programme costs just £750 and is 90% subsidised by the government. It can be taken around existing work commitments and access learning through a blend of online and face-to-face sessions.

Aimed at senior leaders in small and medium businesses, the course covers strategies for growth and innovation, leading high-performance teams and digital adoption, as well as financial management and responsible business practices. Course members will hear from inspirational business leaders and learn alongside local peers, with access to a national alumni network.

By the end of the programme the course members will have developed a tailored business growth plan to increase productivity and grow their revenue, and help take their business to the next level.

Step through the door to growth today and sign up to a course near you on GOV.UK.