Support Available as Lockdown Eases
Furloughing employees
If a business in the constituency continues to be affected by coronavirus, employers may be able to claim grants under the CJRS. The UK Government will continue to pay 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
In July, CJRS grants will cover 70% of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers in the constituency will need to pay the difference from July, so that they continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
Employers in the constituency must pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant as this is a condition of applying for the grant.
More information about the scheme can be found on GOV.UK.
Furloughing flexibly
Employers don’t need to place all their employees on full furlough. They can also 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.
If employers can, it’s best to make a claim once they’re sure of the exact number of hours employees have worked so they don’t have to amend the claim at a later date.
It’s also important to flag our monthly claim deadlines – for example, any business that uses the CJRS for May, must submit their claim by 14 June 2021.
Further support
There is a helpful step by step guide and a list of monthly claims deadlines available on GOV.UK, summarising the latest information on the CJRS and the steps employers need to take to make a claim.
Employers in the constituency can sign up to receive regular email updates from HMRC, to keep up-to-date with the latest information on our coronavirus schemes. They can simply register and add the subscription topics they’re interested in.
Thousands of people have also joined and benefitted from our live webinars which offer more support on changes to the CJRS, and how they affect employers.
More information on coronavirus financial support is also available through the business support finder on GOV.UK.
As we take each step on the roadmap, we’ll continue to use our social media channels to inform employers and employees of the support available. Please feel free to share these posts on your own social media channels.
Claiming Tax Relief for Working from Home
Eligible customers in the constituency can now claim tax relief for additional household costs if they have to work at home on a regular basis, either for all or part of the week. Additional costs include heating, metered water bills or business calls that have been incurred wholly, exclusively and necessarily as a direct result of working from home. They don’t include costs that would stay the same whether employees are working at home or in an office.
Eligible customers can apply quickly and easily using the HMRC online service, which is now open for claims covering periods up to 5 April 2022. For more information go to working at home on GOV.UK.
Employees who have to complete a Self Assessment tax return will need to claim working from home expenses via the employment income pages of their tax return instead of the digital service.
One-Off Payment for Eligible Working Households Receiving Tax Credits
As part of the Spring 2021 Budget, the Chancellor announced a new one-off £500 payment to support working households receiving tax credits.
We’ve started to make payments to eligible customers and we expect all customers will have received the payment by 23 April.
The one-off payment is for those households who, on 2 March 2021, were receiving either:
- Working Tax Credit; or
- Child Tax Credit and were eligible for Working Tax Credit but did not get a payment because their income was too high to get Working Tax Credit payments.
There’s more information on the one-off £500 payment on GOV.UK.
Self-Employment Income Support Scheme (SEISS)
More detailed guidance will be published ahead of the scheme opening, but in the meantime, here are the latest SEISS updates.
Calculating the fifth SEISS grant
The amount of the fifth grant will be determined by a turnover test, which details how much the eligible customer’s turnover has reduced in the 2020-21 tax year compared to pre-coronavirus trading.
Eligible customers do not need to have submitted their 2020-21 Self Assessment tax return to be able to calculate their turnover to claim the fifth SEISS grant. However, they should ensure their records are up to date so that turnover for the year April 2020 to April 2021 is readily available.
If an eligible customer’s turnover reduced by 30% or more, they will receive a grant worth 80% of three months’ average trading profits (capped at £7,500). If their turnover reduced by less than 30%, they will receive a grant worth 30% of three months’ average trading profits (capped at £2,850).
Eligibility for the fifth grant
To be eligible, self-employed people (including members of partnerships) must:
- have submitted their 2019-20 tax return on or before 2 March 2021
- have trading profits that are no more than £50,000 and at least equal to their non-trading income, based on their 2019-20 tax return or an average of relevant tax years between 2016-17 and 2019-20
- declare that they intend to continue to trade and are either:
- currently trading but are impacted by reduced activity, capacity or demand due to coronavirus, or
- have traded previously but are temporarily unable to do so due to coronavirus (if the only reason a customer is temporarily unable to trade is because they have to quarantine or self-isolate after going abroad, this does not meet the requirement).
- declare that they have a reasonable belief that there will be a significant reduction in their trading profits between May and September 2021 due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
If a customer previously heard from HMRC that they were not eligible for the fourth grant, they will not be eligible for the fifth grant either. This is because the same tax returns have been used to determine eligibility for both grants.
Customers ineligible for SEISS may still be eligible for other UK Government support, including Restart Grants, the Recovery Loan scheme, business rates relief and other business support schemes. More details are available on GOV.UK.
SEISS pre-claim checks
To protect against error and fraud, HMRC are continuing the work they carried out ahead of the fourth SEISS grant opening, by contacting up to 27,000 potentially eligible customers to undertake a pre-claim check before the fifth SEISS grant opens.
HMRC will write to affected customers to let them know HMRC will phone them on the number they provided in their 2019-20 Self Assessment tax return to check their identity and business activity.
Customers will need to provide one form of identity and three months’ worth of UK bank statements from the 2019-2020 tax year in order to claim under the SEISS scheme.
If a customer has changed their telephone number and HMRC are unable to reach them, they should contact HMRC on 0800 024 1222, and HMRC will update their records with the new telephone number and arrange for a call back. Please note, this 0800 number can only be used to provide HMRC with a new telephone number. Our advisors will not be able to transfer customers to another department or talk to them about the letter they have received.
Tax agents are not able to claim SEISS or submit these documents on their clients' behalf. Customers can find more information on how to recognise genuine HMRC contact and how to avoid and report scams on GOV.UK.
Reporting SEISS grants on Self Assessment tax returns
SEISS grants are taxable and subject to self-employed National Insurance contributions, which means customers need to report the grants on their tax returns.
HMRC have received a number of 2020-21 tax returns where the first, second and third SEISS grants have been reported incorrectly, or not at all, causing delays in processing them. From 19 June, HMRC will be automatically correcting returns and issuing a notice to the customers to tell them that they have done this. However, incorrect returns received before that date will need to be corrected by us separately; HMRC will share details of any actions customers need to take, as soon as we can.
Customers in your constituency can find more guidance on filing their tax return early on GOV.UK. As a reminder, customers should only use the following boxes to report their SEISS grants on their 2020-21 return:
- box 70.1 on the Self Employment (Full) page of the tax return
- box 27.1 on the Self Employment (Short) page of the tax return
- box 9.1 of the partnership supplementary pages of the tax return
- box 3.10A of the SA200 (Short) tax return.
HMRC know that some customers are incorrectly reporting their SEISS grants as turnover, or 'any other income'. Customers should not report their SEISS grants in any other boxes than those listed above.
Paying back overpaid SEISS grants
If an amendment has been made to a customer’s tax returns for 2016-17 to 2019-20 on or after 3 March 2021, they will need to check if their claim for the fourth SEISS grant has been affected. This requirement applies to claims for the fourth and fifth SEISS grants only.
Customers can tell HMRC if they need to pay back some or all of a SEISS grant by completing a simple form online. Customers will not have to calculate the impact on the SEISS grant themselves as we will then contact them with details of how much they need to repay, and how to do this. More information can be found on GOV.UK.
Frequently asked questions about SEISS
Will receiving a SEISS grant affect future tax returns?
SEISS grants are subject to Income Tax and National Insurance. If a customer received the first, second and third grants, they should be included in their 2020-21 Self Assessment return and submitted by 31 January 2022. The fourth and fifth grants must be included in their 2021-22 Self Assessment, return which should be submitted by 31 January 2023.
Can customers claim if they have an outstanding debt on their HMRC account from Self Assessment?
If customers have tax debt, they should contact us to discuss repayment options, such as a payment plan. As long as they are eligible, customers can still claim the SEISS grant if they have an outstanding debt on their HMRC account from Self Assessment.
Coronavirus Job Retention Scheme (CJRS)
CJRS claims for periods in June can now be submitted and must be made by Wednesday 14 July.
Employers can claim 80% of their furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month.
Employers can claim before, during or after they process their payroll. If they can, it’s best to make a claim once they’re sure of the exact number of hours their employees will work so they don’t have to amend their claim later.
Conditions of claiming CJRS grants
Employers must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of claiming the grant, and not doing so will mean they’ll need to repay the whole of the CJRS grant and they may not be able to claim future CJRS grants.
If employers are having difficulty paying any of their tax liabilities to HMRC, HMRC can work with them to explore affordable payment options – for example, through a payment plan where they can pay in instalments. More information is available on GOV.UK.
Flexibly furloughing employees
If a business continues to be affected by coronavirus, they don’t need to place all their employees on full furlough. Employers can also use the CJRS flexibly if they bring their employees back to work for some of their usual hours. They can claim a portion of their employees’ usual wage costs, but only for the hours spent on furlough.
Employers must not claim under the CJRS for any hours that their employees work. HMRC are carrying out compliance checks to identify error and fraud in claims.
What employers in your constituency need to do now:
- If they haven’t submitted their claims for May but believe that they have a reasonable excuse for missing the deadline (14 June), go to claim for wages on GOV.UK to check if they can make a late claim.
- Submit any claims for June no later than Wednesday 14 July.
- Keep records that support any CJRS grant amounts they claim, in case HMRC needs to check them.
- Make sure they’re paying employee tax and National Insurance contributions to HMRC and contact us if they're struggling to pay.
Changes to the CJRS from July
In July, the UK Government will pay 70% of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to pay the 10% difference in July, and 20% in August and September, so that they can continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
Employers can still choose to top up their employees' wages above the 80% level or cap for each month if they wish, at their own expense.
To help employers plan ahead for future claim periods, the CJRS calculator is available to help them work out how much they can claim for employees up to the end of September. To find this and everything they need to know about the CJRS, go to claim for wages on GOV.UK.
FAQ: Can a CJRS grant be used to pay for holiday leave?
If employers have furloughed employees because of the impact of the pandemic on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave.
If an employee is furloughed for only some of their hours, employers can count all time taken as holiday as furloughed hours, rather than working hours. This means employers can currently claim for 80% of their employee’s usual wages when they’re on leave.
In line with the Working Time Regulations, if a furloughed employee takes holiday employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. They may need to top up their employees’ pay to 100% of their normal hourly rate or salary. More information is available on GOV.UK.
FAQ: Can an employer still use the CJRS if they’re starting to re-open their business?
Employers can continue to use the CJRS if their business is affected by coronavirus. They don’t need to place all their employees on furlough. They can also use the CJRS flexibly to bring their employees back to work for some of their usual hours. They can claim for a portion of the usual wage costs for the hours spent on furlough.
FAQ: How can employers claim through the CJRS?
The UK Government will continue to pay 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
In July, CJRS grants will cover 70% of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to pay the difference from July, so that they continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
Employers must also pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant to us.
VAT Deferral
The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30 June 2020, and were unable to pay in full by 31 March 2021.
The last day businesses can join this scheme online is 21 June. If they join by this date they can spread their payments across up to eight instalments.
If businesses in your constituency have deferred paying VAT and have not yet joined the VAT deferral new payment scheme, they may be charged a 5% penalty and/or interest if they do not join online by the deadline of 21 June or pay in full by 30 June.
Businesses can join quickly and simply online without needing to call us. To find out more, including what they need to join online, go to VAT deferral on GOV.UK.
If they're still unable to pay and need more time, they should contact us to make an alternative arrangement by 30 June 2021.
Fraud and Scams
As part of the Budget, the Chancellor announced a Taxpayer Protection Taskforce to tackle the minority who deliberately claim money they’re not entitled to. If fraud is suspected, it should be reported using our online form. More information can be found on GOV.UK.
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic. Information on how to recognise genuine HMRC contact can be found on GOV.UK. Customers can also forward suspicious emails claiming to be from HMRC to [email protected] and texts to 60599.
You and your constituents can access the National Cyber Security Centre’s guide on how to stay secure online and protect yourself and your business against cyber crime.
Further Support
Many customers have benefitted from our webinars which offer information on the CJRS and SEISS, other government support and how it applies to them. Go to help and support if your business is affected by coronavirus to book online, or to view updated guidance. If a customer booked on a webinar but can no longer attend, they should cancel their place where possible to allow space for others to register.
Live webinars offering support on the fourth SEISS grant will be available from 15 April. In addition to the webinars for customers, we will also provide some dates for webinars tailored for agents, to support them in supporting their clients. Further information on booking will be available in due course.
There’s also list of monthly claims deadlines and a helpful step by step guide on GOV.UK, summarising the latest information on the CJRS and the steps employers need to take to make a claim.
Small Businesses Encouraged to Apply for Brexit Support Fund before 30 June Deadline
With two weeks to go before the deadline, small and medium sized businesses are being encouraged to apply for funding to help them adapt to new customs and tax rules when trading with the EU.
The £20m Brexit Support Fund, which closes 30 June, enables businesses who trade with the EU to access up to £2,000 of funding for practical support including training and professional advice on new customs, rules of origin and VAT processes.
More information on the fund and how to apply can be found on GOV.UK.
HMRC can help towards the cost of children's summer holiday activities
HMRC is reminding working families that they can use Tax-Free Childcare to help pay for their childcare costs over the summer.
Tax-Free Childcare – a childcare top-up for working parents – can be used to help pay for accredited holiday clubs, childminders or sports activities – giving parents and carers that extra peace of mind that their child is having fun during the school summer holidays and it can save them money.
Tax-Free Childcare is available for children aged up to 11, or 17 if the child has a disability. And for every £8 deposited into an account, families will receive an additional £2 in government top-up, capped at £500 every 3 months, or £1,000 if the child is disabled.
Parents and carers in your constituency can check their eligibility and register for Tax-Free Childcare on GOV.UK.
