More details are being released in relation to the measures being introduced as part of the Winter Economy Plan that was announced last month. We would also like to remind you that a number of key dates are approaching for making claims and providing information to HMRC for those who are self-employed and also in relation to furloughed staff.
We are expecting the clarification of new measures to continue and, as soon as this becomes available, we will let you know via email and also on our Facebook, Twitter and LinkedIn accounts, which we encourage you to follow.
Deadlines approaching for COVID-19 support schemes
Two important dates in relation to the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) are approaching plus the deadline for final CJRS claims.
Firstly, the final day for claims in relation to the second SEISS grant is Monday 19 October 2020. You can find more information on SEISS in the COVID-19 update on our website.
Secondly, businesses must notify HMRC of any overclaim for SEISS and CJRS within 90 days of Royal Assent being given to the Finance Act 2020 or 90 days of receipt of the grant, whichever is the later. 90 days from Royal Assent is Tuesday 20 October 2020. We would strongly encourage all of our clients that have received CJRS or SEISS grants to double-check their entitlement.
Finally, the CJRS ends on 31 October 2020 and all claims must be made by 30 November 2020. After this date you will not be able to submit any further claims or add to existing claims. You can find more information on the CJRS on our COVID-19 update in the news section of our website.
Job Retention Bonus Scheme
Further updates are now available in relation to the Job Retention Bonus Scheme (JRB).
Key points to highlight are:
- a one-off payment can be claimed for each employee who has been on furlough and remains continuously employed, and not under notice, until 31 January 2021
- the employee must have been paid at least £1,560 (gross) between 6 November 2020 and 5 February 2021. At least one payment must be made in each tax period ie 6 November to 5 December 2020; 6 December 2020 to 5 January 2021 and 6 January to 5 February 2021
- the payment is a taxable amount of £1,000 made to the employer for each eligible employee
- claims need to be made between 15 February and 31 March 2021. No claims will be accepted after 31 March
- accurate records must be kept records up-to-date and correctly reported through Real Time Information (RTI) – claims may be jeopardised if accurate records are not kept
HMRC have provided examples to help explain how the minimum income threshold of £1,560 is applied for JRB claims.
Employers cannot claim the JRB until 15 February 2021 and claims must be made by 31 March 2021 when the scheme will close.
We know many employers will use the bonus to help pay wages, but there is no requirement that the bonus is paid to employees. This will provide a business some flexibility to consider its individual operations and use the money where it will be most needed.
Although claims cannot be made until 15 February 2021, there are steps you can take to help with the application process. Before a claim can be processed, employers need to have reported all payments made to employees between 6 November 2020 and 5 February 2021 to HMRC. Employers must also:
- still be enrolled for PAYE online
- comply with PAYE obligations to file PAYE accurately and on time under RTI for all employees between 6 April 2020 and 5 February 2021
- keep their payroll up to date and make sure they report the leaving date for any employees that stop working before the end of the pay period that they leave in
- use the irregular payment pattern indicator in RTI for any employees not being paid regularly
- comply with all requests from HMRC to provide any employee data for past CJRS claims.
More details in relation to the JRB can be found here on the GOV.UK website.
If you are a GWA payroll/PAYE client we can claim any JRB payments on your behalf. If you would like assistance managing and processing your payroll and claim in line with this guidance, please do get in touch.
SEISS Grant Extension
It was announced in the Winter Economy Plan, that the Self Employment Income Support Scheme Grant (SEISS) is to be extended for another six months, from November 2020 until April 2021.
However, it is important to note that these additional SEISS grants come with extra conditions. The eligibility criteria for the third grant (November 2020 – January 2021) and fourth grant (February 2021 – April 2021) is changing. To be eligible for the third and fourth grants, taxpayers must:
- be currently eligible for the SEISS (same criteria as the first and second grants, however you need not have actually made a claim)
- be actively trading at the time the grant is claimed and intend to continue to trade
- be impacted by reduced demand due to COVID-19 in the qualifying period.
The requirements to be “actively trading” and to be “impacted by reduced demand” are new. The requirement to be actively trading will mean if a business has closed during the pandemic, even as a result of the pandemic, it will not be able to claim if it has not reopened during the qualifying period.
You can find more information on the SEISS on our COVID-19 update in the news section of our website.
Time to Pay – Income Tax
As part of the Winter Economy Plan, the Chancellor announced that taxpayers who are unable to pay self-assessment bills due on 31 January 2021, can apply to spread the cost of the tax bill into monthly payments. This can be done online without the need to call HMRC.
These enhanced payment arrangements apply to all tax due on that date including any self-assessment tax payments originally due on 31 July 2020 and that were deferred until 31 January 2021 as part of previously announced COVID-19 support measures.
The online service, called ‘Time to Pay’, is available for amounts up to £30,000 Once you’ve completed your tax return for the 2019-20 tax year, you can use the service to set up a direct debit and pay any tax that is owed in monthly instalments, over a period of 12 months. You can set up this arrangement via this link on the GOV.UK website.
To set up a ‘Time to Pay’ arrangement online you will need to meet the following requirements:
- have no outstanding tax returns
- have no other tax debts
- have no other HMRC payment plans in place
- your self-assessment bill must be between £32 and £30,000
- your payment plan cannot be set up any later than 60 days after your tax was due for payment. ie. by 1 April 2021.
Any interest will be applied to an outstanding balance from 1 February 2021. This is different to the deferral of second payments due in July 2020 when no interest was charged.
If you do not meet the above requirements you may still be able to arrange a Time to Pay option but you will need to call HMRC on the self-assessment payment helpline: 0300 200 3822.
Currently, along with other accountancy firms, we do not have access to this facility and anyone who wishes to set up a Time to Pay arrangement must do so directly. We want to emphasise that this is a payment option to settle monies due to HMRC and any tax liability is not being cancelled.
Test and Trace Support Payment / Self-Isolation Support Grant
Local Authorities are gradually starting to provide more details of the £500 Test and Trace Support Payment (England) and the Self-Isolation Support Grant (Scotland) available for those on low incomes who are unable to work while self-isolating. These payments can be claimed from 12 October and can be backdated to 28 September where necessary.
To be eligible for the Test and Trace payment, you must be:
- asked to self-isolate by NHS Test and Trace either because they’ve tested positive for coronavirus or have recently been in close contact with someone who has tested positive
- employed or self-employed
- unable to work from home and will lose income as a result and
- currently receiving Universal Credit, Working Tax Credit, income-based Employment and Support Allowance, income-based Jobseeker’s Allowance, Income Support, Housing Benefit and/or Pension Credit.
You must apply to your council for the self-isolation payment. Councils have been asked to establish systems for Test and Trace support payments by 12 October.
Tax Relief – working from home
As firms have closed offices as a result of the COVID-19 crisis, many staff are now working from home. If you are working from home, even for part of the week, you are eligible to claim for increased costs. As apportioning these costs can be time-consuming and difficult, the simplest way to do this is to claim a rate of £6 per week.
Your employers can give you a tax-free allowance up to this amount. Alternatively, if you are not within self -assessment, you can make a claim for the same amount via a form P87. You can complete the form online or print and post it. The Low Income Tax Reform Group also provides useful information if you need help completing a form P87.
The Kickstart Scheme is not just for larger employers. Even if you have just one placement, you can take advantage of the grants to support the wages and training of a new young employee.
Although you are not able to apply directly, Greaves West & Ayre can apply for you. We will submit an application on your behalf, using other employers to create 30 or more job placements in one application. If you need further guidance to support your placements, our experienced Payroll and HR teams can provide additional direction and assistance where needed.
We have to receive enough interest to collate a minimum of 30 potential job placements to make an application. Our deadline date is 16 October for people to get in touch. If we have not received 30 placements at this point, we will work with you to identify an alternative intermediary so your application can still continue.
There will be no cost to you, unless we make an application on your behalf. Should we make a successful application for you we would make a charge of £200 plus VAT per employee. This administration fee is to cover the work we would undertake to collate and submit your application.
You can find out more information on the news section of our website.
Information correct as of 9 October 2020