Here’s HMRC’s latest information about the financial support schemes available to help your clients
Self-Employment Income Support Scheme (SEISS)
Claims for the fourth SEISS grant have now closed.
The claims window for the fifth grant will open from late July.
The latest information on this grant is available on GOV.UK, with more detailed guidance due to be published in late June, including more 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, HMRC 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 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.
HMRC also contacted several customers before claims opened for the fourth grant, to get more information to check their eligibility. Where it contacted someone and they did not provide the requested details, they will need to provide the information HMRC 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 their grants on their tax returns.
If your 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 information can be found in the partnership tax return guide on GOV.UK.
HMRC said it has received several 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, it has developed a solution that 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. Your clients do not need to take any action in the meantime, as HMRC will let customers know if it has corrected their return.
If you have clients who are preparing their tax returns, please help them with the reporting of coronavirus support payments to avoid delays. HMRC has produced guidance on correctly reporting SEISS grants. In summary, your 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 your 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 your client has amended their tax return on or after 3 March 2021, they will need to check if their eligibility for the fourth SEISS grant has 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 2016-17 to 2019-20.
Once a customer has made an amendment, they can tell HMRC if they need to pay back some or all of a SEISS grant by completing a simple form online. HMRC 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 your clients
HMRC may not be able to talk to you about your clients’ SEISS grants unless it receives additional consent from them. This is because the 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 HMRC can record consent if your client calls them on 0300 200 3310
- written consent should include your 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 the National Insurance contributions and Employers Office, HM Revenue and Customs, BX9 1AN.
After a Self Assessment return is filed:
- as an authorised agent, HMRC can talk to you about anything that your client entered on their return
- it 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 it has corrected a SEISS grant amount following a mismatch between the customer's SEISS figure and the figure it holds, it can discuss this with you too.
If you plan to contact HMRC regarding your client's SEISS grant, please speak to them and make sure relevant consent is in a place where necessary, and allow time for required authorisation to be processed by HMRC. It appreciates this is an additional workload for agents, your clients and HMRC, but ensuring the security of customer information remains a priority.
Submit CJRS claims for May
If you haven’t submitted your clients’ May furlough claims yet, you must do so by the deadline of Monday14 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).
You can claim before, during or after your client’s payroll is processed. It’s best to encourage your clients to provide the exact number of hours their employees worked so you don’t have to amend the claim later.
Conditions of claiming CJRS grants
You need to remind your clients that they 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 your client is having difficulties paying any of their tax liabilities to HMRC, it 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 the 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.
Remind your clients that they must not claim under the CJRS for any hours that their employees work. HMRC is carrying out compliance checks to identify error and fraud in claims.
What you or your clients need to do 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.
Use our updated CJRS templates to make claiming easier
HMRC updated its claims process for employers who have 16 or more employees, to make it easier to add their 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.
You and your clients do not need to do anything differently if you were using our previous template to claim for 100 employees or more, and third-party software incorporating this will still work.
You must enter all the information in the right format before uploading the completed template so that their claim is processed quickly and successfully.
HMRC updated the process to help employers get their claim right the 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 you or your clients 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
- incorrect detail
- duplicated or missing information.
Please remind your clients not to change the format of the template before they submit it, as that won’t be accepted by our system.
What to do if your client has overclaimed
Please remind your clients not to 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 for 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 join the VAT deferral new payment scheme by the deadline of 21mJune, pay in full by 30 June, or get in touch with HMRC to make an alternative arrangement to pay by 30 June 2021.
If businesses are still unable to pay and need more time, they should HMRC.