The Coronavirus Job Retention Scheme (CJRS) is being wound down on 30 September 2021 and data published by HMRC has revealed that 1.9 million workers remain on furlough.

The data showed that the number of employees furloughed on the CJRS fell by 590,000 during June. The total number of furloughed workers is 1.9 million.

The data also revealed that younger workers have been leaving furlough most quickly, whilst one in ten workers aged 65 or over were on furlough.

For guidance on claiming CJRS visit: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

Internet link: GOV.UK CJRS statistics

HMRC has updated the guidance on salary sacrifice.

HMRC has removed the guidance on ‘Salary sacrifice arrangements set up before 6 April 2017’ as the transitional arrangements for calculating the value of the benefit came to an end on 5 April 2021.

A salary sacrifice arrangement is an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit.

Employers can set up a salary sacrifice arrangement by changing the terms of the employee’s employment contract. The employee needs to agree to this change.

The impact on tax and National Insurance contributions payable for any employee will depend on the pay and non-cash benefits that make up the salary sacrifice arrangement.

An employer needs to pay and deduct the right amount of tax and National Insurance contributions for the cash and benefits they provide.

For the cash component, that means operating the PAYE system correctly via payroll.

For any non-cash benefits, an employer will need to work out the value of the benefit.

If an employer sets up a new salary sacrifice arrangement, they will need to work out the value of a non-cash benefit by using the higher of the:

• amount of the salary given up
• earnings charge under the normal benefit in kind rules.

For cars with CO₂ emissions of no more than 75g/km, employers should always use the earnings charge under the normal benefit in kind rules. Continue reading...

In response to HMRC’s consultation on simplifying the rules relating to land and property, the Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to abolish all VAT exemptions and remove all VAT options.

The ICAEW stated that the VAT rules regarding land and property are ‘unnecessarily complex’ and stand to benefit from ‘significant simplification’. The Institute also highlighted the need for a more fundamental review of VAT exemptions.

In its response, the ICAEW also argued that abolishing exemptions would remove the difficulties for businesses posed by partial exemption. It suggested that all land and property transactions should be subject to VAT at the standard rate or reduced rate, other than those relating to domestic property, which should remain zero-rated. This would help to remove many of the complexities associated with the current rules, the ICAEW said.

In regard to the removal of all VAT options, the ICAEW commented: ‘Any option, whether it be to tax or exempt a transaction, creates complexity and uncertainty, as there are then two possibilities for the VAT liability of what is essentially the same type of supply.’

Internet link: ICAEW VAT representation

HMRC has issued guidance on claiming the fifth and final self-employed Income Support Scheme (SEISS) grant.

Unlike previous SEISS grants the amount of the fifth grant available is determined by how much a self-employed individual’s turnover is reduced.

The fifth grant is 80% of three months’ average trading profits capped at £7,500 for those self-employed individuals whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850.

Claims must be made by 30 September 2021. It is the taxpayer who must make the claim, an accountant or agent cannot submit the claim on their behalf.

Before making a claim taxpayers must:

• work out their turnover for a 12-month period starting from 1 April 2020 to 6 April 2020
• find their turnover from either 2019/20 or 2018/19 to use as a reference year.

HMRC advises taxpayers will need to have both figures ready when they make their claim.

A taxpayer can calculate their turnover for 2020/21 in a number of ways:

The Government has published draft clauses for the next Finance Bill, which broadly cover pre-announced policy changes.

The government is committed, where possible, to publishing most tax legislation in draft for technical consultation before the relevant Finance Bill is laid before Parliament.

The consultation will close on 14 September 2021.

Internet link: GOV.UK Draft Finance Bill 2021-22

The government’s Coronavirus Job Retention Scheme (CJRS) begins winding down from 1 July.

The latest data from the Institute for Fiscal Studies (IFS) shows that at the end of April 3.4 million jobs were still on furlough so the change to the furlough scheme will affect thousands of employers across the country.

Since last March, the government has paid 80% of the salaries of employees (up to a maximum government contribution of £2,500 per month) – with the employers only having to pay employer National Insurance and pension contributions.

From 1 July the government will only pay 70% of the furloughed employee’s salary, so the employer has to pay 10% of the salary themselves. In August and September, employers will have to pay 20%, with the government picking up 60%. Furloughed employees will continue to receive 80% of their wages including the employer contribution.

However, according to the IFS, the bill for employers keeping a member of staff on the scheme will rise significantly, putting jobs at risk. For a furloughed employee previously earning £20,000 per year, the cost to an employer of keeping them will rise from £155 per month in June to £322 in July, and £489 per month in August and September, after which the scheme is due to end.

Further details of changes to the CJRS can be found at GOV.UK CJRS. Continue reading...

More than 282,000 working families used a Tax-Free Childcare (TFC) account during March 2021, according to figures from HMRC.

HMRC stated that it is the highest recorded number of families in any one month since the scheme was launched in April 2017. These families received a share of more than £33 million in government top-up payments for their childcare.

The TFC scheme can be used to help pay for accredited holiday clubs, childminders or sports activities – enabling parents and carers to save money on the costs of childcare.

The TFC initiative is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up, capped at £500 every three months, or £1,000 if the child is disabled.

Myrtle Lloyd, Director General for Customer Services at HMRC, said:

‘We want to help kids stay active this summer, whether they are going to summer holiday clubs or a childminder. A childcare top-up will go a long way towards helping parents plan and pay for summer activities to keep their kids happy and healthy.’

More details and registration for TFC can be found at www.gov.uk/tax-free-childcare

Internet link: GOV.UK TFC statistics

The government has confirmed that employers of all sizes in England can now apply for £3,000 in extra funding to help them take on new apprentices.

The boost to the apprenticeship incentive scheme was confirmed by Chancellor Rishi Sunak in the Budget in March.

The claims portal opened on 1 June and businesses can apply for £3,000 for each new apprentice hired as a new employee from 1 April until 30 September.

The cash incentive is designed to help more employers invest in the skilled workforce they need for the future as part of the government’s Plan for Jobs.

The government says the scheme builds on action already underway to protect, support and create more jobs while bringing the UK’s skills and education system closer to the employer market.

The Chancellor commented:

‘Young people have been hit especially hard by the crisis – which is why our Plan for Jobs, launched last year, is focused on helping them get the skills they need to get the jobs they want.

‘By boosting the cash incentives for our apprenticeship scheme we’re improving opportunities for young people to stay in and find work – this could not be more important in our economy’s recovery.’

Find out more and apply at www.gov.uk/guidance/incentive-payments-for-hiring-a-new-apprentice. Continue reading...

HMRC has confirmed that almost 800,000 employees who have been working from home during the pandemic have already claimed tax relief on household related costs.

The saving is worth up to £125 per year for each employee, and eligible workers can claim the full year’s entitlement if they have been told to work from home by their employer, even if it has been for just one day during the tax year.

Employees who have either returned to working in an office since early April or are preparing for their return can still claim the working from home tax relief and benefit from the full year’s relief for 2021/22.

Employees can apply directly themselves and receive the full tax relief that is due. Once their application has been approved, their tax code will be automatically adjusted for the 2021/22 tax year, and they will receive the tax relief directly through their salary.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘More people are getting back to office working now, but it’s not too late to apply for tax relief on household expenses if they’ve been working from home during the pandemic.’

Check eligibility and apply online at www.gov.uk/tax-relief-for-employees/working-at-home.

Internet link: GOV.UK news

From 1 July 2021 there are changes to the Stamp Duty Land Tax (SDLT) and Land Transaction Tax (LTT) bands for residential property.

SDLT is payable by the purchaser in a land transaction occurring in England and Northern Ireland. The following rates and thresholds apply for SDLT from 1 July 2021 to 30 September 2021:

LTT is payable by the purchaser in a land transaction occurring in Wales. From 1 July 2021 the rates for residential property are:

There are no changes to the rates and bands for Land and Property Transaction Tax which apply in Scotland.

Internet links: SDLT rates LTT rates