Pay Less Tax – Spring 2024 Edition
Updates to Self Employment Income Support Scheme
If you are eligible for the second grant and your business has been adversely affected on or after 14 July 2020 you can make a claim under the SEISS no later than 19 October 2020.
You can claim for the second grant even if you did not make a claim for the first grant.
The government has released details of how the following circumstances can affect your eligibility:
- If your tax return is late, amended, or under enquiry
- If you are a member of a partnership
- If having a new child affected the trading profits you reported for the tax year 2018 to 2019
- If you have loans covered by the loan charge and have not agreed a settlement with HMRC before 20 December 2019
- If you claim averaging relief
- If you are a military reservist
- If you are non-resident in the UK.
Job Support Scheme
The furlough scheme ends on 31st October and is being replaced by the Job Support Scheme. This new scheme is to apply for six months from 1 November 2020.
- The employer must be a Small and Medium-Sized Enterprise (SME) or, if a large business, show that their turnover has fallen.
- There is no requirement for the employer to have previously furloughed workers under the CJRS.
- Anyone employed as of 23 September 2020 will be eligible but employees must not be on a redundancy notice.
- Employees must work at least 33% of their usual hours.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
- For the time worked, employees must be paid their normal contracted wage.
- For every hour not worked the employee will be paid up to two-thirds of their usual wage. The employer and the government will each cover one-third of the employees’ usual pay.
- “Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details are expected to be set out shortly.
- Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
- The government contribution will be capped at £697.92 per month.
- The grant will not cover Class 1 Employer NICs or pension contributions. These will remain payable by the employer.
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
- The employer will be reimbursed in arrears as with the CJRS. Claims can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
- HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
- The intention is that employees will be informed by HMRC directly of full details of the claim.
- The scheme can be used alongside the Job Retention Bonus.
Expansion of Job Support Scheme
Following an announcement on 9 October the government’s Job Support Scheme (JSS) has been expanded to support businesses across the UK who are legally required to close their premises due to coronavirus restrictions.
Over the coming months, the government will pay two-thirds of employees’ salaries up to a maximum of £2100 per month. Employers will not be required to contribute towards wages, but will need to cover NICS and pension contributions.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees much be off for a minimum of seven consecutive days.
To be eligible employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September 2020.
The scheme will begin on 1 November and will be available for six months, with a review point in January. As per the existing Job Support Scheme payments to businesses will be made in arrears via a claim service that will be available from early December.
Employees of firms that are legally required to close in the period before 1 November will be eligible for the CJRS.
In addition to the JSS, the government is increasing cash grants for businesses legally required to close in local lockdowns to £3000 per month. This will be payable every two weeks.
» Click here for more details (pdf)
HMRC Time to Pay Service Extended
From 1 October the threshold for which self-assessment taxpayers can apply online for additional support to help spread the cost of their tax bill into monthly payments, without the need to call HMRC, has been increased from £10000 to £30000.
Customers who wish to set up their own self-serve Time to Pay arrangements need to have no:
- outstanding tax returns
- other tax debts
- other HMRC payment plans set up
- The payment plan needs to be set up no later than 60 days after the due date of a debt.
Customers using self-serve Time to Pay will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.
Your online application can be accessed by logging into your government gateway account.
Job Retention Bonus Available to Claim from 15 February 2021
The Job Retention Bonus is a £1,000 one-off taxable payment that will be made to the employer, for each eligible employee that has been furloughed and kept continuously employed until 31 January 2021.
Employers will be able to claim the bonus between 15 February 2021 and 31 March 2021. You do not have to pay this money to your employee.
Employees must not be serving a contractual or statutory notice as at 31 January and must have been paid enough in each relevant tax month to meet the Job Retention Bonus minimum income threshold.
To meet this minimum income threshold you must pay your employee a total of at least £1,560 (gross) throughout the tax months:
- 6 November to 5 December 2020
- 6 December 2020 to 5 January 2021
- 6 January to 5 February 2021
Guidance as to how the bonus can be claimed will be provided at the end of January 2021. Claims will need to be made between 15 February and 31 March 2021 after which the scheme will close.
More details will be made available on our website nearer the time.
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