April 2021

Young woman shopping for clothes. Retail shopping, mask, wearing mask, corona, covid.

The fourth SEISS grant gateway opened last week.

Eligible claimants should have been contacted by HMRC in writing to let them know exactly when to apply.

The new scam takes the form of a “phishing” email.

It informs the recipient that the SEISS grant is open for application and contains a link to apply.

It states that the claimant will need to divulge their bank account, passport and driving licence details.

Be aware that this scam exists – the only way to apply for the SEISS grant is via the link on the official portal page here.

All you need to know about the import one stop shop (IOSS) scheme.

From 1 July 2021 the VAT exemption for the importation of goo

ds with a value not exceeding EUR 22 will be removed. As a result, all goods imported to the EU will be subject to VAT.

The Import One-Stop Shop (IOSS) was created to facilitate and simplify the declaration and payment of VAT for distance sales of imported goods with a value not exceeding EUR 150.

Benefits of IOSS

  • facilitates the collection, declaration and payment of VAT for sellers that are making distance sales of imported goods to buyers in the EU
  • makes the process easier for the buyer, who is only charged at the time of purchase, and therefore does not face any surprise fees when the goods are delivered
  • the shipment is also free of customs duty usually charged by the transporter at the moment the goods are imported in the EU.

 The IOSS covers distance sales of goods that are:

  • dispatched or transported from outside of the EU at the time they are sold (GB is a third country, different rules apply to Northern Ireland)
  • dispatched or transported in consignments with a value not exceeding EUR 150 (this is the total value of the shipment, not the value of each item within a shipment, so if an order comprises two items each of EUR 100, that order will be subject to import VAT)
  • not subject to excise duties (typically applied to alcohol or tobacco products).

Operation and registration

The seller can register his business on the IOSS portal of any EU member state from 1 April 2021.

If the business is not based in the EU, they will normally need to appoint an EU-established intermediary to fulfil VAT obligations under IOSS.

The IOSS registration is valid for all distance sales of imported goods made to buyers in the EU.

Sellers registered in the IOSS need to apply VAT at the rate that is applicable in the EU member state where the goods are to be delivered.

Information on the VAT rates in the EU can be found here.

Accounting records and returns

If you use IOSS you should do the following:

  • show/display the amount of VAT to be paid by the buyer in the EU, at the latest when the ordering process is finalised
  • ensure the collection of VAT from the buyer on the supply of all eligible goods that have an EU member state as their final destination
  • make sure that eligible goods are shipped in consignments with a value not exceeding EUR 150
  • to the extent possible, show on the invoice the price paid by the buyer in EUR
  • submit an electronic monthly VAT return via the IOSS portal of the member state where the business is registered for IOSS; the first return will be due for July 2021 and must be submitted by the end of August
  • make a monthly payment of the VAT declared in the VAT return to the member state where you are registered for IOSS; the first payment will be due for July 2021 and must be paid by the end of August
  • keep records of all eligible IOSS sales for ten years
  • provide the information required for customs clearance in the EU, including the IOSS VAT identification number, to the person declaring the goods at the EU border.

You do not need to charge VAT on distance sales of imported goods in the following circumstances:

  • you sell several goods to the same buyer and these goods are shipped in a package amounting to more than EUR 150. These goods will be taxed at importation in the EU member state
  • your distance sales of goods are facilitated by an electronic interface such as a marketplace or platform. In this situation, the electronic interface is responsible for the VAT due.

 

The EU member states are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

The fourth Self-Employment Income Support Scheme (SEISS) grant covers the months of February, April, and March 2021, and can be claimed if coronavirus has caused a significant reduction in trading profits for that period.

To claim, a business must confirm that it has a reasonable belief that the profits for the period will be significantly affected.

A very important difference with this grant is that where a tax return for 2020/21 is amended, the trader must notify HMRC if their entitlement to the SEISS is reduced by more than £100.

You should already have been contacted if you are eligible for the grant, as HMRC is basing the information on the 2019/20 and 2020/21 tax returns. You apply directly here.

If you’ve not received a letter from HMRC detailing your claim date, but you believe you’re eligible, contact HMRC on 0800 024 1222.

The deadline for claims is 1 June 2021.

The fourth Self-Employment Income Support Scheme ( SEISS ) grant covers the period 1 February 2021 to 30 April 2021.

It amounts to 80% of your trading profits, capped at £7,500 and paid in one instalment.

What you get depends on your average profits over a three-month period and whether you meet the conditions below.

Conditions

  • You must have filed your 2019/20 return by midnight on 2 March 2021.
  • You must have traded in the tax years 2019/20 and 2020/21.
  • For the period 1 February to 30 April 2021 you must either have traded with reduced activity, capacity or demand because of the pandemic, or were unable trade to because of it.
  • You must intend to carry on or restart trading.
  • Your annual profits must not have exceeded £50,000 for 2019/20 and must be at least equal to your non-trading income.

 

If you don’t qualify based on this year HMRC will take an average for the four years 2016/17 to 2019/20.

The SEISS 4 states that you need a “reasonable belief” that your profits have reduced. It’s a good idea to keep evidence to show why you believe your profits will be less for the period 1 February to 30 April 202.

If you started in business in 2019/20 you may be eligible.

The online claims service goes live from late April.

If you’re eligible HMRC will contact you from mid-April to give you a date from which you can claim.

This will be by email, letter or via its online service.

You must claim by 1 June 2021. 

Employees may have additional household costs if they have to work at home on a regular basis, either for all or part of the week. This includes having been told to work from home because of coronavirus.

Additional costs include things like heating, metered water bills or business calls, that they can demonstrate have been incurred wholly, exclusively and necessarily as a direct result of working from home. Costs that would stay the same whether they are working at home or not, do not qualify for tax relief.

If you don’t already reimburse your employees for these additional costs, employees may be eligible to claim tax relief on them. Employees will receive the quickest response if they apply on the HMRC online service, which is now open for claims that are for periods up to 5 April 2022.

Find out more about eligibility, and how employees can claim on GOV.UK.

The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30 June 2020 and have been unable to pay in full by 31 March 2021.

You can apply now to spread these payments over a number of months – businesses that join by 21 April 2021 will be able to benefit from up to 10 instalments. The later businesses join, the fewer instalments are available to them. Businesses can join the scheme quickly and simply online without needing to call HMRC.

To find out more information, including the things you need to prepare before joining online, go to GOV.UK. Businesses need to apply by 21 June 2021 if they want to join the scheme online.

If employers have furloughed employees because of the effects of coronavirus on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave. 

If an employee is furloughed for only some of their hours, employers can count all time taken as holiday as furloughed hours, rather than working hours. This means employers can currently claim for 80% of their employee’s usual wages when they’re on leave.

In line with the Working Time Regulations, if a furloughed employee takes holiday employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. They may need to top up their employees’ pay to 100% of their normal hourly rate or salary. You can find more information on GOV‌‌‌‌‌‌‌‌.UK.

If you haven’t submitted them yet, you must do so by the deadline of Wednesday‌‌ 14‌‌ April

As a reminder, 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 difference from July, so that they 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.

Employers must also continue to pay Employer National Insurance contributions and pension contributions on furlough pay.

What you need to do now

  1. Check if you’re eligible and work out how much you can claim using the CJRS calculator and examples.
  2. Submit any claims for March no later than Wednesday‌‌‌‌ 14‌‌ April.
  3. Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them. ‌

To be eligible for the fourth SEISS grant, self-employed individuals (including members of partnerships) must:

  • have submitted their 2019-20 tax return on or before 2 March 2021
  • have trading profits that are no more than £50,000 and at least equal to their non-trading income, based on their 2019-20 tax return or an average of relevant tax years between 2016-17 and 2019-20
  • declare that they intend to continue to trade and are either:
    • currently trading but are impacted by reduced activity, capacity or demand due to coronavirus, or
    • have traded previously but are temporarily unable to do so due to coronavirus (If they’ve been abroad and have to stay in quarantine or self-isolate, this does not count)
  • declare that they have a reasonable belief that there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.

You will be able to claim at any time from your personal claim date in late April until 1‌‌ June. In order to claim, you will need to log in to your Government Gateway account with your User ID and password. If you do not have a Government Gateway account (for example, customers who are newly self-employed), you should create one now to avoid delaying your claim.

To confirm your eligibility and make your claim, you will need your: 

  1. National Insurance number
  2. Self Assessment Unique Taxpayer Reference (UTR) number
  3. Government Gateway user ID and password:

If you don’t have an account, or have forgotten your details, you can follow the instructions on GOV‌‌.UK by searching ‘HMRC services: sign in or register’.

  1. Bank account number and sort code

HMRC will also ask for the address that your bank or building society account is registered to. Please note this is your address – most likely your home or business premises – not the address of your bank or building society.

If you haven’t claimed before

If this is your first time claiming a SEISS grant, you may be asked additional questions to prove your identity.

Questions could relate to any of the following:

  • your UK passport
  • information held on your credit file (such as loans, credit cards or mortgages)
  • your Self Assessment tax return (within the last three years)
  • your tax credit claim
  • your P60
  • one of your three most recent payslips.

Please ensure you have this information ready when making your claim. Your claim may be delayed if you cannot answer the identity verification questions.

You are required to keep appropriate records as evidence of the impact on your business. 

HMRC have written to some customers where they need to make further checks on their eligibility after processing their 2019-20 Self Assessment returns. HMRC have been contacting these customers using the telephone number provided on their tax return, and have asked them to provide proof of identity (such as a valid UK passport or UK photo-card driving license) and evidence of trade (three months of bank statements from the business accounts for the 2019-20 tax year).

From mid-April, HMRC will also contact you by email, letter or SMS if they believe you may be eligible for the fourth SEISS grant, providing you with your personal claim date.

You can make your claim from your personal claim date in late April, until the claims service closes on 1‌‌ June 2021. Applying before a personal claim date means it will not be processed.

From mid-April, HMRC will also contact customers that have previously claimed SEISS support but are no longer eligible due to either:

  • not filing their 2019-20 Self Assessment return on or before 2 March 2021, or
  • not meeting the eligibility criteria when their filed 2019-20 return is taken into account.

You can order free rapid lateral flow tests to test your employees twice a week in the workplace.

If you have 10 or more employees, from early April you’ll be able to order tests for your employees to collect from their workplace and use at home twice a week. You can do this if you cannot provide testing in the workplace.

You must register by 11:59pm on 12 April 2021. If your business is closed or you cannot provide tests now, you should still register so you can order tests in the future.

You can register to order tests if:

  1. your business is registered in England
  2. your employees cannot work from home
  3. Your employees can also find out if they can get a rapid lateral flow test from a local test site instead.

Read more here: https://bit.ly/3sDlMf1

There will be no further automatic extensions for confirmation statement filings, accounts filings after 5 April 2021. Any deadlines that fall after this date will revert to normal.

For accounts filing deadlines that fall after 5 April, companies can still apply for a 3-month extension.

Companies that are eligible and cite issues around COVID-19 in their application will be granted an extension.

Companies that have already had their accounts deadline extended may not be eligible, as the law only allows a maximum filing period of 12 months.

Read more here: https://bit.ly/3fvUhQT