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UPDATES

1st November : How the CJRS changed from 1 November 2020

Eligibility: Individuals employed at 30 Oct 2020 provided an RTI submission has been made between 20 Mar 2020 and 30 Oct 2020. New employees hired in late spring and summer can now be eligible for furlough grants.

Claim:  For employees on fixed pay, the claim is based on 80% of the usual salary/wages in a reference period. For all other employees, the reference period is the last pay period ending before 31 October 2020.

Payment:  From 1 Nov 2020, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The policy will be reviewed in Jan 2021 for Feb and Mar 2021.

Deadline:  Claims for periods starting on/after 1 Nov must be submitted within 14 calendar days after the relevant month.  

14 September: HMRC has updated its guidance on how to perform usual hours calculations where employees come off furlough partway through a claim period.

The complexity can arise where an employer is claiming for multiple employees and some employees remain furloughed. HMRC updated its guidance to apply to claims made from 14 Sep. It has added a new subheading “Calculating the number of working and furloughed hours for an employee that comes off furlough or flexible furlough partway through a claim period. The guidance states, if your employee stops being furloughed or flexibly furloughed partway through a claim period when calculating the number of furloughed hours, you can claim for, make sure you:

  • only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period

  • do not include any working hours after the last day of furlough.”

HMRC has clarified that employers do not need to amend claims made before 14 Sep, but they should use this calculation for any claims from 14 Sep.

5 August: HMRC has given ‘powerful new weapon’ to access taxpayer information

UK Taxman is now allowed to issue notices to banks/other financial institutions to provide information about a taxpayer without the taxpayer’s agreement or approval of tax tribunal. Also, HMRC is empowered to send a “Nudge Letters” to people suspected of having undisclosed offshore assets and required them to complete the disclosure of offshore assets within 30 days of receiving the notice. Opportunity to review the tax affairs will be provided to the person notified.

24 July: The Chancellor has instructed review of CGT to identify simplification opportunities. Is Capital Gain Tax (CGT) complicated? Have a quick glance on the following CGT key bits and anlayse whether it needs simplification:   

      - Exemption: No CGT on the first £12,300 of gains in a tax year.

      - Rates: There are four CGT rates (10%, 20%, 18% and 28%) which depend on the level of income and type of assets.

      - Payment: Within 30 days of disposal of the asset but it varies by residential status and classes of property.

      - Reliefs: Enterpreneur relief, investor relief, private residence relief, rollover relief and many more are available. 

20 July: Coronavirus Job Retention Scheme (CJRS) claims for periods ending on or before 30 June 2020 must be made by 31 July 2020

8 July:  No stamp duty on houses up to £500k in England and Northern Ireland, VAT cut to 5% to support hospitality and a £1k bonus for retaining furloughed employees were announced in the Chancellor’s Summer Statement.

06 July: HMRC has confirmed how usual hours should be calculated under Corona Virus Job Retention Scheme. 

The employer must enter the usual working hours and actual working hours (difference is furloughed hours) for furlough claim. The usual hours must be calculated for each pay period of an employee, that falls within the claim period. For example, Mr Williams works 35 hours a week and is paid on last working day of each month. The usual working hours of Mr. Williams for the month of July will be worked out as follows: 

 

  1. Number of contracted hours (on/before 19th Mar 2020)                                               35  

  2. Divide by the number of calendar days including non-working days                           35/7 = 5

  3. Multiply by calendar days in the pay period (full/part)                                                   5*31 = 155

  4. Usual working hours (round up to next whole number)                                                 155

29 June: HMRC has issued PAYE special arrangement for Short Term Business Visitors (STBV)

Its a normal practice for UK based employers to require non-resident employees to come into the UK to work for them and a liability to UK PAYE will arise. HMRC has introduced a contractual arrangement between the employer and HMRC, which can be entered in to from 6 April 2020. This arrangement allows the employer to return the information at month 12. This means that employees with no overall liability do not need to have tax deducted and apply for repayments through self assessment. Employer will report those STBVs who meets the following conditions:

1. Resident in a country which the UK has a Double Taxation Agreement

2. Coming to work in the UK for a UK company or the UK branch of an overseas company, or are

3. Legally employed by a UK resident employer, but economically employed by a separate non-resident entity.

4. Expected to stay in the UK for 183 days or less in any 12 month period

23 June: What are ususal hours for flexible furlough calculations?

Do not simply rely on your calendar when making claims under the second iteration of the Coronavirus Job Retention Scheme from 1 July. The difficulty is all about the "usual working hours", which are not the usual working hours you might expect at all, but are simply an estimate. Key to getting the answers HMRC wants you to get from its furlough grant claim calculator, are the hours you feed in. For the period of the claim you must enter: total usual hours, and actual working hours. The difference between these is the furloughed hours on which the grant claim is based. Unfortunately, total usual hours are not as you might imagine

15 June: Businesses need to reinstate VAT direct debits. 

The deferral of VAT payments due to corona virus comes to an end on 30 June and businesses need to take action to reinstate their direct debit mandates.

12 June: CJRS and flexible furlough from 1 July

The CJRS is changing from 1 July to encourage those furloughed back into work. The table shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100% of the time:

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