Directors may be liable for overclaimed CJRS grants

Where HMRC believe a company (including LLPs) is insolvent or about to become insolvent, and overclaimed CJRS grants owed will not be paid, they may give a notice making an individual (or individuals) jointly and severally liable for the relevant tax liabilities. This means that all individuals given a notice will be jointly and severally liable with the company for paying these liabilities.

HMRC have issued guidance setting out the conditions that need to be present in order to use their powers:

a. An officer of HMRC may give a joint and several liability notice to an individual if they are satisfied that all 4 of the conditions A to D set out in the legislation have been met

b. the company is subject to an insolvency procedure, or there is a serious possibility of becoming subject to one

c. the company is liable to an income tax charge as a result of receiving a COVID-19 support payment it was not entitled to receive

d. the individual was responsible for the management of the company at the time the tax first became chargeable, and the individual knew (at that time) that the company was not entitled to the relating COVID-19 support payment

e. there is a serious possibility that some or all of the income tax liability will not be paid

See: Overview of joint and several liability notices for the taxation of coronavirus (COVID-19) support payments - GOV.UK (https://www.gov.uk/guidance/overview-of-joint-and-several-liability-notices-for-the-taxation-of-coronavirus-covid-19-support-payments)

28th May 2021 – Hillmans Weekly Update

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

• Self-Employment Income Support Scheme (SEISS) Update
• Tell HMRC and pay back a Self-Employment Income Support Scheme grant
• Changes to the CJRS from July
• Motor Vehicle Electrification Update

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a great bank holiday weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Changes to the CJRS from July

The government will continue to pay 80% of your 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.

You will need to pay the 10% difference in July (20% in August and September) so that you continue to pay your 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.

For the hours not worked you can continue to choose to top up your employees' wages above the 80% level or cap for each month, at your own expense.

21st May 2021 – Hillmans Weekly Update

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

• ONS confirms economy growing
• Employers’ NICs Relief for employees working in Freeport tax areas
• HMRC urge businesses to carry out due diligence into their labour supply chain
• Paying CJRS Grants Back

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

CJRS Update

The Coronavirus Job Retention Scheme (CJRS) grant claim changes again 1st September. Please talk to us if you would like us to help estimate your claim.

- From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.

- You will still need to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.

- The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in September, you are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).

- You will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from your own funds.