Friday, 26 June 2020

Weekly Update 26th June 2020

Below I have summarised all the main tax related updates we have seen this week.

Self-employed new parents can claim support grant
VAT registered businesses advised to reinstate VAT direct debits
Repaying Job Retention Scheme Grants
Changes to notifying an option to tax land and buildings during coronavirus

I hope you have a great weekend!

Best wishes,


Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100

Self-employed new parents can claim support grant
The Government has announced that self-employed parents whose trading profits dipped in 2018/19 because they took time out to have children will be able to claim for a payment under the self-employed income support scheme (SEISS).

The scheme requires claimants to have traded in 2018/19 with their profits making up at least half of their total income. They must also have submitted a self-assessment tax return on or before 23 April 2020 for the 2018/19 tax year.

For those self-employed new parents who are affected, they will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.

They will also need to meet the other standard eligibility criteria for support under the SEISS. Further details of the change for self-employed parents will be set out by the start of July in published guidance.

VAT registered businesses advised to reinstate VAT direct debits
The VAT payment deferral comes to an end on the 30th June. The deferral gives businesses the option to defer VAT payments falling due between the 20th March and 30th June until the 31st March 2021.

Businesses who are registered for VAT have been advised to reinstate their direct debit mandate, to ensure any VAT payments becoming due from the 1st July 2020 onwards are not late. The direct debit can be setup via the online tax account.

The Institute of Chartered Accountants in England and Wales (ICAEW) said: 'HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in Making Tax Digital for VAT.

Repaying Job Retention Scheme Grants
We recently had a client ask us if its possible to repay the grant they received from the Job Retention Scheme, as the impact of COVID-19 on their business was not as bad as originally expected. You may have seen in the press some larger companies promising to repay the JRS grant also.

We have spoken to HMRC and at present their official stance is that they are not expecting or encouraging any business to repay the JRS grant. Indeed as mentioned last week, there is no facility for this to be repaid even if a business wanted to. 

For businesses who want to repay the JRS grant our advice is to hold fire until the long-term impact of COVID-19 is better understood. By then HMRC will have updated guidance on how repayments can be made should you wish to do so.

Changes to notifying an option to tax land and buildings during coronavirus
The time limit for notifying HMRC of a decision to opt to tax land and buildings has been temporarily extended to 90 days due to COVID-19.

Normally you are required to notify HMRC within 30 days of deciding to opt to tax land and buildings. This can be done by emailing a scanned copy of the signed notification to opt to tax, or by printing and posting a signed copy of the notification. 

Due to the impact of COVID-19, the rules have been temporarily changed for decisions made between 15th February 2020 and 31st October 2020.

Normally supplies of land and buildings are exempt from VAT. However, you may opt to tax a piece of land or a building so you can recover any VAT incurred in making those supplies. 

This is a complex area of taxation, so please do not hesitate to contact us if you have any queries regarding this. We would be pleased to assist.

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