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 2021.
In July 2021, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August 2021 and September 2021, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to pay the 10% difference in July 2021 (20% in August 2021 and September 2021), 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.
To help you plan ahead for all future claim periods, the CJRS calculator is available to help you work out how much you can claim.
HMRC have updated their process for bulk claims to make it easier to add your clients’ details.
You can now use a template if employers are claiming for between 16-99 employees,and another if they are claiming for 100 or more employees. If you already use HMRC’s previous 100 or more template, you will not need to download a new version and third-party software incorporating this will still work. You must enter all of the information in the right format before uploading the completed template so that their claim is processed quickly and successfully.
HMRC have updated the process to help employers get their claim right first time and provide all the information needed to make sure their claims are not delayed or stopped. For example, if employers cannot provide a National Insurance number for an employee, you can now select a reason for this.
If you make a mistake, the template will highlight it to help you put it right before the claim is submitted. Mistakes that will be highlighted include:
- details input in the wrong format
- given incorrect details
- duplicated or not given required information
Remind your clients not to change the format of the template before they submit it, as that will not be accepted by our system.
You can find everything you’ll need to make a claim on GOV.UK, including their updated templates, a useful calculator and guidance on the information you need to provide and in what format, to make sure a claim is accepted.
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 is 21 June. If businesses join by this date they can apply to spread their payments across up to eight instalments.
If a business has deferred paying VAT and has 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.
They can join quickly and simply online, go to GOV.UK and search ‘VAT deferral’.
If businesses are still unable to pay and need more time, they should contact HMRC to make an alternative arrangement by 30 June – go to GOV.UK and search ‘if you cannot pay your bill on time’.
Calculating the fifth SEISS grant
The amount of the fifth grant will be determined by a turnover test, which details how much your turnover has reduced in the 2020-21 tax year compared to pre-coronavirus trading.
You do not need to have submitted your 2020-21 Self Assessment tax return to be able to calculate yourturnover to claim the fifth SEISS grant.
If your turnover reduced by 30% or more, you will receive a grant worth 80% of three months’ average trading profits (capped at £7,500). If your turnover reduced by less than 30%, you 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 you were not eligible for the fourth grant, you 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.
If you are ineligible for SEISS, you may still be eligible for other UK Government support, including Restart Grants, the Recovery Loan scheme, business rates relief and other business support schemes. For more details, search ‘coronavirus support’ 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.
They 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.
You 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 you have changed your telephone number and HMRC are unable to reach you, you should contact us 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.
Reporting SEISS grants on Self Assessment tax returns
SEISS grants are taxable and subject to self-employed National Insurance contributions, which means you need to report the grants on your tax returns.
As a reminder, you should only use the following boxes to report your SEISS grants on your 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.
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.
You can claim before, during or after your payroll is processed. It’s best to provide the exact number of hoursyour employees will work so you don’t have to amend the claim later.
Conditions of claiming CJRS grants
Please remember that you 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 you’ll need to repay the whole of the CJRS grant and you may not be able to claim future CJRS grants.
If you are having difficulty paying any of your tax liabilities to HMRC, HMRC will work with you to explore affordable payment options – for example, through a payment plan where they can pay in instalments. To find out more, go to GOV.UK and search ‘time to pay arrangement’.
Flexibly furloughing employees
If your business continues to be affected by coronavirus, you don’t need to place all your employees on full furlough. You can also use the CJRS flexibly if you bring your employees back to work for some of their usual hours. You can claim a portion of your 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 you need to do now:
- If you haven’t submitted your claims for May but believe that you have a reasonable excuse for missing the deadline (14 June), check if you can make a late claim by searching ‘claim for wages’ on GOV.UK.
- Submit any claims for June no later than Wednesday 14 July.
- Keep records that support any CJRS grant amounts claimed, in case HMRC needs to check them.
- Make sure you‘re paying employee tax and National Insurance contributions to HMRC and contact HMRC if you’re struggling to pay.
HMRC are aware of recent increases in scams via phone calls, emails and texts. If someone contacts you unexpectedly claiming to be from HMRC – possibly saying that you owe tax and face arrest, are due a tax refund, that your National Insurance number has been compromised or asking you to transfer money or give bank details – it’s likely to be a scam.
Search GOV.UK for HMRC ‘scams checklist’ and to find out how to report tax scams. You can also access the National Cyber Security Centre’s new guide on how to stay secure online and protect yourself or your business against cybercrime by searching ‘Cyber Aware’.
Businesses that deferred VAT payments last year have less than a month left to join online and pay in monthly instalments under the VAT Deferral New Payment Scheme.
The online portal for the new payment scheme will close on 21 June 2021.
Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. Businesses had until 31 March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.
It will cover the period from May 2021 to September 2021
To be eligible for the grant, an individual must be self-employed or a member of a partnership.
- they must have traded in the tax year 2019/20
- and submitted their tax return on or before 2 March 2021
- and also have traded in the tax year 2020/21.
- Claimants must either be currently trading but are impacted by reduced demand due to coronavirus
- or have been trading but are temporarily unable to do so due to coronavirus.
The amount of the fifth grant will be determined by how much an individual’s turnover has been reduced in the year April 2020 to April 2021.
HMRC will provide more information and support by the end of June 2021 to help individuals work out how their turnover was affected.
In mid-July HMRC will contact individuals who are eligible based on their tax returns to give them a date from which they can make their claim.
To help manage repayments there are a variety of Pay As You Grow (PAYG) options to give BBLS recipients more time and flexibility to pay back their loan.
There are three PAYG options to consider:
- Request an extension of the loan term to 10 years from six years, at the same fixed interest rate of 2.5%.
- Reduce the monthly repayments for six months by paying interest only. This option is available up to three times during the term of the Bounce Back Loan.
- Take a repayment holiday for up to six months. This option is available once during the term of the Bounce Back Loan.
These options can be used individually or in combination with each other. If you have taken out a Bounce Back Loan, your lender will communicate PAYG options three months before your repayments begin, as well as outlining how your payment profile may change according to your PAYG choices.
Businesses first began to receive BBLS loans in May 2020 and the first repayments will become due from May 2021 onwards. Lenders will start to communicate PAYG options to borrowers three months before repayments commence.
Lenders will advise customers about how their repayment options may change according to their choices under the scheme. Borrowers remain responsible for repaying their Bounce Back Loan and are fully liable for the debt.
PAYG is designed to alleviate borrowers’ financial difficulty, even before it arises, by giving borrowers flexibility in meeting their repayment obligations. Using PAYG will not affect a borrower’s credit rating, but it may affect lenders’ future creditworthiness assessments.