Below I have summarised all the main tax related updates we have seen this week.
• Coronavirus Job Retention Scheme Update
• VAT Flat Rate Scheme
• HMRC Invites Hospitality Industry to Register for Eat Out to Help Out
• VAT Reduced Rate of 5% on Hospitality
If you have any queries regarding this week’s content, please do not hesitate to contact me.
I hope you have a great weekend!
Steven Hillman ACA
Tel: 01934 444100
Coronavirus Job Retention Scheme Update
From 1st July “Flexible Furlough” was introduced and the calculations and time recording of full-time, part-time and fully furloughed employees has become more complicated.
Changes are occurring regularly as the Government and HMRC make clarifications to the scheme. If you have any queries regarding your claim talk to us first.
The latest changes are outlined below:
Steps to take before calculating your claim using the Coronavirus Job Retention Scheme
Wording has been added to make it clear that HMRC will not decline or seek repayment of any grant based solely on the particular choice between fixed or variable approach to calculating usual hours, as long as a reasonable choice is made
HMRC has issued further guidance on the CJRS Individuals you can claim for who are not employees:
You can claim a grant for individuals who are not employees - as long as they’re paid via PAYE. The groups you can claim for include:
• office holders (including company directors)
• salaried members of Limited Liability Partnerships (LLPs)
• agency workers (including those employed by umbrella companies)
• limb (b) workers
• Contingent workers in the public sector
• Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)
Individuals who are paid through PAYE but not necessarily employees in employment law, can continue to be furloughed from 1 July as long as you have previously submitted a claim for them for a furlough period of at least 3 weeks between 1 March and 30 June 2020.
Paying employee taxes and pension contributions
There is also an update on ‘Paying employee taxes and pension contributions’ section and added wording to section on employee rights to make it clear that you can continue to claim for a furloughed employee who is serving a statutory notice period.
The process HMRC is developing to recover overclaimed grant amounts through the tax system
Information has been added about the process HMRC is developing to recover overclaimed grant amounts through the tax system.
If you have made an error in a claim and do not plan to submit further claims, you should contact HMRC to let them know about the error and find out how to pay back any overclaimed amounts. Once you have contacted HMRC you will be given a payment reference number and directed to make a payment.
The Government are introducing legislation to recover overclaimed grant amounts through the tax system. If you repay any overclaimed grant amounts back through the above methods then this will reduce or, if the full amount is repaid, prevent any potential tax liability under that legislation. Further guidance on this will be issued in due course.
If you have made an error that has resulted in an underclaimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim, they need to conduct additional checks.
Please talk to us about CJRS claims – we have an information collection spreadsheet to help you and we can estimate your claim ahead of making it.
VAT Flat Rate Scheme
New VAT flat rate percentages from 15th July 2020 until 12th January 2021 have been announced, which include:
• Catering 4.5%
• Pubs 1%
• Hotels and accommodation 0%
See more information here: https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
HMRC Invites Hospitality Industry to Register for Eat Out to Help Out
Registrations for the Eat Out to Help Out Scheme are now open.
Restaurants and other establishments serving food for on-premises consumption can now sign up to a new government initiative aimed at protecting jobs in the hospitality industry and encouraging people to safely return to dining out.
The Eat Out to Help Out registration service is now live on GOV.UK, allowing businesses to join the scheme announced last week by Rishi Sunak MP, Chancellor of the Exchequer.
Restaurants, bars, cafes and other establishments who use the scheme will offer a 50% reduction, up to a maximum of £10 per person, to all diners who eat and/or drink-in throughout August.
Customers do not need a voucher as participating establishments will just remove the discount from their bill. Businesses simply reclaim the discounted amount through an online service, supported by HM Revenue and Customs (HMRC). Claims can be made on a weekly basis and will be paid into bank accounts within five working days.
The scheme is open to eligible establishments across the UK and can be used all day, every Monday to Wednesday, between 3 and 31 August 2020.
For details on how the scheme works see: https://www.gov.uk/guidance/register-your-establishment-for-the-eat-out-to-help-out-scheme?utm_source=4783ef6b-1939-4072-8311-f58a0a39e451&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
The Government has provided marketing resources for the Eat Out to Help Out scheme. There are posters, images and other promotional materials for use by establishments who are taking part in the Scheme.
VAT Reduced Rate of 5%
One of the new Government initiatives last week was the announcement of the reduction in VAT to 5% on hospitality, hotel and holiday accommodation and admissions to certain attractions.
The reduced VAT scheme started on the 15th July so please talk to us if you have any concerns.
Read our blog post for more information: https://blog.hillmans.co.uk/2020/07/vat-reduced-rate-of-5.html