Support scheme and retention bonus / Time to Pay /Home Working Expenses Update
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Job Support Scheme
The government recently announced the Job Support Scheme (JSS) to protect jobs where businesses remain open but are facing lower demand over the winter months due to COVID-19.
Under JSS the government will contribute towards the wages of employees if they are working fewer than normal hours due to decreased demand. Employers will continue to pay the wages for the hours staff work. Employees must work at least 33% of their usual hours. For the hours not worked, the employer and the government will pay a third each of their usual wages (the government contribution is capped at £697.92 per month).
Expansion of Job Support Scheme
The government 9 October announced an expansion of the JSS, to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.
Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one or more of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.
The government will pay two thirds of employees’ wages, up to a maximum of £2,100 per month. Employers will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.
You or your clients can apply for the JSS and the new expansion even if you haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1 November, with payment of grants in arrears from early December. The scheme will be reviewed in January.
Search ‘Job Support Scheme expanded to firms required to close due to Covid Restrictions’ and ‘Job Support Scheme factsheet’ https://www.gov.uk/government/publications/job-support-scheme for more details. Further information will be published in the coming weeks.
Job Retention Bonus – guidance now live
Further guidance for the Job Retention Bonus is now available. It includes information about how you or your clients can check if your employees are eligible and when you can claim the bonus.
You or your clients will be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS) and kept continuously employed until at least 31 January 2021. Employers do not have to pay this money to their employees.
To be eligible, employees must earn at least £1,560 between 6 November 2020 and 5 February 2021 and have received earnings in the November, December and January tax months. Employees must also not be serving a contractual or statutory notice period on 31 January 2021.
You or your clients will be able to claim the bonus from 15 February until 31 March, once you have submitted PAYE information for the period up to 5 February 2021. We’ll let you know how you can make a claim when further guidance is published by the end of January.
Employers can still claim the Job Retention Bonus if they make a claim for the same employees through the Job Support Scheme, as long as they meet the eligibility criteria for both.
Further information can be found at https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021
What you or your clients need to do now
If you intend to claim the Job Retention Bonus, you or your clients must:
- keep your PAYE submissions up-to-date and on time, with Real Time Information (RTI) reporting for all employees, including reporting the leaving date for any employees that stop working for you in the month they leave or the next Full Payment Submission
- use the irregular payment pattern indicator in RTI for any employees not paid regularly
- provide any employee data for past CJRS claims that HMRC has requested
- make sure all your CJRS claims have been accurately submitted and you have told us about any changes needed (for example if you’ve received too much or too little).
Coronavirus Job Retention Scheme – changes from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
Employers will continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). Employers must still pay their employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours they’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme
You or your clients will also continue to pay your furloughed employees’ National Insurance and pension contributions from your own funds.
The scheme closes on 31 October. You or your clients will need to make any final claims on or before 30 November. You will not be able to submit or add to any claims after 30 November.
Claimed too much in error?
It’s important that you or your clients continue to check each claim is accurate before submitting it, and we would also recommend checking previous claims so you can avoid any penalties for claiming too much.
If you or your client have claimed too much CJRS grant and have not repaid it, you must notify us and repay the money by the latest of whichever date applies below:
- 90 days from receiving the CJRS money you’re not entitled to
- 90 days from the point circumstances changed so that you were no longer entitled to keep the CJRS grant
- 20 October 2020, if on or before 22 July you received CJRS money you were not entitled to, or if your circumstances changed.
If you or your client do not do this, you may have to pay interest and a penalty as well as repaying the excess CJRS grant. For more information on interest search ‘Interest rates for late and early payments’ https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates
How to let HMRC know if you have claimed too much
You or your client can let HMRC know as part of your next online claim without needing to call HMRC. If you or your client claimed too much but do not plan to submit further claims, you can let HMRC know and make a repayment online through the new card payment service – go to ‘Pay Coronavirus Job Retention Scheme grants back’ www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grants-back
VAT Deferral New Payment Scheme
If you or your clients deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. The VAT Deferral New Payment Scheme can be used to spread these payments over equal instalments up to 31 March 2022. Alternatively, you or your clients can make payments as normal by 31 March 2021, or make Time To Pay arrangements with HMRC if you need more tailored support.
More information on the VAT Deferral New Payment Scheme will be available in the coming months.
Protect yourself from scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic. Search ‘scams’ https://www.gov.uk/report-suspicious-emails-websites-phishing for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to email@example.com and texts to 60599.
Time to Pay
The online self-serve ‘Time to Pay’ service, has been increased to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic.
Once you’ve completed your tax return for the 2019-20 tax year, you can use the online self-serve ‘Time to Pay’ service through https://www.gov.uk/difficulties-paying-hmrc to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.
If you wish to set up your own self-serve ‘Time to Pay’, you must meet the following requirements:
- no outstanding tax returns
- no other tax debts
- no other HMRC payments set up
- your Self Assessment tax bill is between £32 and £30,000
- it is no more than 60 days since the tax was due for payment.
If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.
If you set up a ‘Time to Pay’ arrangement, you or your client will have to pay interest on the tax paid late. Interest will be applied to any outstanding balance from 1 February 2021.
Settling disguised remuneration scheme use and/or paying the loan charge’ has now been updated to reflect the fact that the deadline of the 30 September 2020 has passed.
By 30 September 2020, people with loans subject to the loan charge should have filed a complete and accurate 2018-2019 tax return. The return should have included full details of loans subject to the loan charge and any other income taxable in the 2018-2019 tax year. By the 30 September 2020 customers should have paid in full or agreed a Time To Pay arrangement.
If any of your clients did not complete these actions by the deadline then we recommend that you review the updated issue brief and guidance and discuss with them the next steps that they have to take. You may wish to review with them their options in relation to Time To Pay arrangements.
Anyone subject to the loan charge who is concerned about their ability to pay, should contact HMRC on 03000 599110. HG comment – if you can get through!!!!
Home Working Expenses
Please note the Home Working Expenses press release went live late yesterday afternoon https://www.gov.uk/government/news/54800-customers-claim-tax-relief-for-working-from-home