HMRC Stakeholder Digest – 8 June
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).
Self-Employment Income Support Scheme (SEISS)
Applications for the fourth SEISS grant have now closed – thank you for your continued support throughout the claims period. The latest SEISS updates are below.
Claiming the fifth SEISS grant
The claims window for the fifth grant will open from late July.
Latest information on this grant is available on GOV.UK, with more detailed guidance due to be published in late June, including details of the turnover test which will determine the level of grant (80% or 30%) an individual will receive.
- If their turnover has reduced by 30% or more in the year April 2020 to April 2021, they will receive a grant worth 80% of three months’ average trading profits (capped at £7,500).
- If their turnover has reduced by less than 30% in the year April 2020 to April 2021, they will receive a lower grant worth 30% of three months’ average trading profits (capped at £2,850).
From mid-July we will contact customers who may be eligible to let them know their personal claim date – the earliest date they can make their claim.
If a customer previously heard from us 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.
We also contacted a number of customers before claims opened for the fourth grant, to get more information to check their eligibility. Where we contacted someone and they did not provide the requested details, they will need to provide the information we asked for if they would like their eligibility to be checked for the fifth grant. These customers will receive details on what to do when they access the online SEISS claims service.
Reporting SEISS grants correctly on Self-Assessment tax returns
Customers should be aware that SEISS grants are taxable and subject to self-employed National Insurance contributions, which means they need to report the grants on their tax returns.
If clients received any of the first, second or third SEISS grants, these should be included in their 2020-21 Self Assessment tax return, due to be submitted by 31 January 2022. For how to return grant payments made to a partner, who then distributed the grant amongst the partnership, more details can be found in the partnership tax return guide on GOV.UK.
We have received a number of 2020-21 tax returns where SEISS grants have been reported incorrectly, causing delays in processing them.
Although customers remain responsible for the accuracy of their returns, we have developed a solution which will automatically populate the right box on these returns with the correct amount of SEISS grant(s) received. This means most incorrect returns should be resolved by 5 July 2021. Clients do not need to take any action in the meantime, as we will let customers know if we have corrected their return.
If clients are preparing their own tax returns, we have produced guidance on correctly reporting SEISS grants to help them and avoid delays. In summary, clients should be using 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.
The fourth and fifth grants should be included in clients’ 2021-22 Self Assessment tax returns, due to be submitted by 31 January 2023. The exception regarding partners who distribute the grant amongst their partnership still applies.
Paying back overpaid grants
If amendments have been made to tax returns on or after 3 March 2021, eligibility for the fourth SEISS grant may have been affected. This new requirement applies to claims for the fourth and fifth SEISS grants only, and to amendments made on or after 3 March 2021 to Self-Assessment returns for tax years between 2016-17 and 2019-20.
Once a customer has made an amendment, they can tell us if they need to pay back some or all of a SEISS grant by completing a simple form online. 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.
Authorisation to discuss SEISS grants on behalf of clients
We may not be able to discuss clients’ SEISS grants unless we receive additional consent from them. This is because our existing process – the 64-8 agent authorisation – was not designed to cover the support provided in response to coronavirus, such as SEISS grants, so the usual taxpayer confidentiality rules apply. The requirement for consent is explained in more detail below.
Before a Self Assessment return is filed:
- SEISS grant information cannot be disclosed to an agent without specific consent from their client.
- Written consent is our preferred option, although we can record consent if the client calls us on 0300 200 3310.
- Written consent should include the client’s name, address, tax reference number (for example their Unique Taxpayer Reference (UTR)) and signature, in addition to the name and address of the agent they wish to authorise. This should be posted to: National Insurance contributions and Employers Office, HM Revenue and Customs, BX9 1AN.
After a Self Assessment return is filed:
- As an authorised agent, we can discuss anything that a client entered on their return.
- We can discuss any boxes on a return that have no entry (for example where we know a SEISS grant was paid but the return does not include this).
- Where we have corrected a SEISS grant amount following a mismatch between the customer’s SEISS figure and the figure we hold, we can discuss this too.
Before contacting us regarding an individual SEISS grants, it is important that agents speak to their clients first and make sure relevant consent is in place where necessary and allow time for required authorisation to be processed by us. We appreciate this is additional workload for agents and HMRC but ensuring the security of customer information remains a priority for us.
CJRS claims for May – submit by 14 June
Furlough claims for May must be submitted by 14 June.
Employers can claim 80% of their furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month (these limits will also apply to claims for June).
Claims can be made before, during or after a client’s payroll is processed. It’s best for clients to provide the exact number of hours their employees will work so the claim doesn’t need amending later.
Conditions of claiming CJRS grants
Clients must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of applying for the grant, and not doing so will mean they’ll need to repay the whole of the CJRS grant or they may not be able to claim future CJRS grants.
If clients are having difficulties paying any of their tax liabilities to HMRC, we can work with them to explore affordable payment options – for example, through a payment plan where they can pay over time, in instalments. To find out more, go to GOV.UK.
Flexibly furloughing employees
If their business continues to be affected by coronavirus, employers don’t need to place all their employees on full furlough. They 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 employee’s usual wage costs for the hours spent on furlough only.
Clients must not claim under the CJRS for any hours that their employees work. We are carrying out compliance checks to identify error and fraud in claims.
What needs to be done now
- Check if they’re eligible and work out how much they can claim using our CJRS calculator and examples.
- Submit any claims for May, no later than Monday 14 June.
- Keep records that support the amount of CJRS grants claimed, 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
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 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.
For the hours not worked employers can 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 individuals plan ahead for all future claim periods, the CJRS calculator is available to help them work out how much the employer can claim for employees. To find this and everything you need to know about the CJRS, go to claim for wages on GOV.UK.
We’ve updated our CJRS templates to make claiming easier
We’ve updated our claims process for employers who have 16 or more employees, to make it easier to add their details. A template can now be used if employers are claiming for between 16-99 employees, and another if they are claiming for 100 or more employees.
Individuals do not need to do anything differently if they were using our previous template to claim for 100 employees or more, and third-party software incorporating this will still work.
All the information must be entered in the right format before uploading the completed template so that claims are processed quickly and successfully.
We’ve updated the process to help employers get their claim right first time and provide all the information needed to ensure their claims aren’t delayed or stopped. For example, if employers can't provide a National Insurance number for an employee, you can now select a reason for this.
If anyone makes a mistake, the template will highlight it to help them put it right before the claim is submitted. Mistakes that will be highlighted include:
- details input in the wrong format
- incorrect details
- duplicated or missing information.
It is important that individuals do not change the format of the template before they submit it, as that won’t be accepted by our system.
Information is available here about everything you’ll need to help you make a claim on GOV.UK, including our updated templates, a useful calculator and guidance on the information needed and in what format, to ensure claims are accepted.
What to do if a client has overclaimed
Clients should not enter negative numbers in the template. If they have overclaimed CJRS grants and submit their claim using the template, employers will need to calculate the overclaim amount and enter this amount in the ‘overclaim’ box on their claim form.
For more information on paying grants back, go to Pay Coronavirus Job Retention Scheme grants back on GOV.UK.
VAT deferral – join online by 21 June
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.
21 June is the last day businesses can join this scheme. If businesses join by this date they can apply to spread their payments across up to eight instalments.
They can join quickly and simply online without needing to call us. To find out more, including what your clients need to sign up online, go to VAT deferral on GOV.UK.
If businesses have deferred paying VAT, they may be charged a 5% penalty and/or interest if they do not sign up to the VAT deferral new payment scheme by the deadline of 21 June, pay in full by 30 June, or get in touch with us to make an alternative arrangement to pay by 30 June 2021.
If businesses are still unable to pay and need more time, they should contact us.
Scams warning for tax credits customers
Tax credits customers should be vigilant and alert to potential scams, as the remaining annual renewal packs arrived in the post last week.
In the 12 months to 30 April 2021, HMRC responded to more than 1,154,300 referrals of suspicious contact from the public. More than 576,960 of these offered bogus tax rebates.
In the same period, HMRC has worked with telecoms companies and Ofcom to remove more than 3,000 malicious telephone numbers and with internet service providers to take down over 15,700 malicious web pages. HMRC responded to 443,033 reports of phone scams in total, 135% up on the previous year.
Anyone doing their tax credits renewal who has received a tax or benefits scam email or text might be tricked into thinking it was from HMRC and share their personal details with the criminals or even transfer money for a bogus overpayment.
Many scams mimic government messages to appear authentic and reassuring. HMRC is a familiar brand, which criminals abuse to add credibility to their scams.
If customers cannot verify the identity of a caller, HMRC recommends that you do not speak to them. Customers can check GOV.UK for HMRC’s scams checklist to find out how to report tax scams and for information on how to recognise genuine HMRC contact.
Renewing online is quick and easy. Customers can log into GOV.UK to check on the progress of their renewal, be reassured it is being processed and know when they will hear back from HMRC. Customers can also use the HMRC app on their smartphone to:
- renew their tax credits
- check their tax credits payments schedule, and
- find out how much they have earned for the year
Tax credits help working families with targeted financial support, so it is important that people don’t miss out on money they are entitled to. Customers have until 31 July to notify HMRC of any change in circumstances that could affect their claims.
More information is available on GOV.UK.
Tax Administration Strategy calls for evidence and consultation closing soon
On March 23, the government published a command paper titled ‘Tax Policies and Consultations (Spring 2021)’, which set out a range of tax-related announcements including publication of consultations, discussion documents and calls for evidence.
This marked a significant milestone in HMRC’s work to deliver the Tax Administration Strategy (TAS), aimed at improving the resilience and effectiveness of the country’s tax administration system.
A number of these documents close soon including:
- A call for evidence on our Tax Administration Framework – exploring how to make tax more straightforward and harder to get wrong, how to improve people’s experience of the tax system, and how to build and maintain trust between HMRC and taxpayers. To respond to this call for evidence please visit GOV.UK or email responses to: firstname.lastname@example.org by 11.45PM on the July 13 2021.
- A call for evidence on Timely Payment – exploring the longer-term opportunities and challenges of more frequent payment of income tax within Income Tax Self-Assessment (ITSA), and of corporation tax for small companies, based on in-year information. To respond to this call for evidence, please visit GOV.UK, or email responses to: email@example.com by 11.45PM on the July 13 2021.
A consultation on Raising Standards in the Tax Advice Market – seeks views on whether a mandatory requirement for tax advisers to hold professional indemnity insurance (PII) should be introduced, and on the definition of tax advice. To respond to this call for evidence, please visit GOV.UK, or email responses to: firstname.lastname@example.org.
New Managing Pension Schemes service available for enrolment
HMRC is in the process of developing a new IT system for Pension Scheme Administrators (PSAs) and Pension Scheme Practitioners (PSPs).
Pension scheme administrators are now being encouraged to enrol for the new Managing Pension Schemes service, which will replace the currently used Pension Schemes Online service.
The new service will:
- Allow scheme administrators to view their pension scheme(s), eligible for migration - from later this year.
- Provide up to date information on their pension scheme(s) and migrate them over to the Service - from Spring 2022.
- File Accounting for Tax returns for their pension schemes, replacing the current system – from Spring 2022.
To enrol for the service, go to Register as a pension scheme administrator - GOV.UK. In the ‘how to register’ section there is a link to the Managing Pension Schemes service. To make sure scheme administrators keep the same scheme administrator ID that they are currently registered with, they will need to enrol using the same credentials as they use for the Pension Schemes Online service. HMRC requires them to complete similar information, as if they are registering as a new scheme administrator.
Pension scheme practitioners can also enrol for the Managing Pension Schemes service. To enrol for the service as a practitioner, they will need to go to Find out about the pension scheme practitioner role - GOV.UK . To make sure they keep the same practitioner ID that they are currently registered with, they will need to enrol using the same credentials as they use for the Pension Schemes Online service.
Pension scheme practitioners will need to ensure that their authorising scheme administrators have enrolled for the Managing Pension Schemes service and, when the functionality is available, provided up to date details for their pension scheme to make sure they can maintain full reporting access for the scheme(s).
HMRC has published more information on the migration of pension schemes on to the Managing Pension Schemes service in their Managing pension schemes service newsletter – March 2021 - GOV.UK. If you need any additional help or have further questions, you can also email HMRC at email@example.com.