Agent update June/July 2020 - www.rossmartin.co.uk

HMRC have issued the Agent Update for June/July 2020. We have summarised the key content for you with links to our detailed guidance on the topics covered.

COVID-19

HMRC have published updated guidance for employers, businesses and employees and more information can be found on the Coronavirus Business Support page.

The Coronavirus Statutory Sick Pay Rebate Scheme is now live on GOV.UK.

Employers with fewer than 250 employees, can now claim for Coronavirus-related Statutory Sick Pay (SSP).
Tax agents can make claims on behalf of employers. To make a claim now, please visit GOV.UK.

Employers are eligible to use the scheme if they meet all the following criteria:

They are claiming for an employee who is eligible for sick pay due to Coronavirus.
They have already paid the SSP to their employee.
They had a PAYE payroll scheme in operation before 28 February 2020.
They had fewer than 250 employees across all PAYE schemes on 28 February 2020.
They are eligible to receive state aid under the EU Commission Temporary Framework.

See COVID-19: Government support tracker

Statutory Residence Test and Coronavirus (COVID19)

HMRC has updated its guidance on the Statutory Residence Test and exceptional circumstances.

See COVID-19: Statutory Residence Test

Maternity and other parental pay: Change to the calculation of Average Weekly Earnings (AWE) for employees furloughed under the Coronavirus Job Retention Scheme (CJRS)

If your employee was on furlough and you paid them with help from the CJRS during any part of the relevant eight-week period, there are different rules about how you calculate their AWE if they are due to start a period of family-related statutory pay on or after 25 April 2020.

The earnings used to calculate AWE for that period will be the higher of:
- What they actually receive from their employer; or
- What they would have received from their employer had they not been on furlough.
- Where it is not clear what the employee would have received had they not been on furlough, a helpful starting point will be the reference salary used to determine how much you can claim through CJRS.
- You should also consider any bonus, commission or other payments which would have classified as earnings and which the employee was due to receive in the relevant period.

HMRC’s Basic PAYE Tools (BPT)

BPT has been updated to version 20.2 to include further guidance on Statutory Payments in the ‘Calculators’ section.

Check the tax rules on waiving your income or donating to charity

During the COVID-19 pandemic, many people are choosing to give up part of their income to support their business or employers or donate to charity.

Supporting a business or an employer

Waiving salary or bonuses before they are paid

A ‘waiver of remuneration’ happens when an employee gives up rights to remuneration and gets nothing in return.
If an employee and employer agree to a reduction in the employee’s remuneration before they are paid, no Income Tax or NICs will be due on the amount given up as long as the agreement is not part wider arrangements to divert the amount to a particular recipient or cause.
- For example, if it was waived on the condition that the sum would be donated to a particular charity, this would still be liable to tax.

Waiving dividends

Directors or other shareholders, including employees, can waive their right to a dividend.
To be effective, a Deed of Waiver must be formally executed, dated and signed by shareholders and witnessed and returned to the company.
The waiver must be in place before the right to receive a dividend arises.
- For final dividends, this is before they are formally declared and approved by the shareholders.
- For interim dividends, the waiver must be in place before the dividends are paid.

See Dividend waiver: Specified dividend and Dividend Waiver: Unknown future dividends

Giving salary or bonuses back to your business or employer after they have been paid

It is possible to give back salary or bonuses to a business or employer after they have been paid but it is not possible to claim back the Income Tax and NICs that would already have been deducted.
Bonuses must be waived before the date they are due to be paid. If they are waived on or after the due date then tax will still be payable on them, even if the bonus is not paid over.

Donating to charity: Payroll Giving

Payroll Giving is a way of giving money to charity without paying tax on it. Any registered charity in the UK or EU, and recognised by HMRC for tax purposes, can receive donations through payroll giving.

Employees select a registered charity to donate to, let their employer’s payroll department know and donations are taken from their pay before Income Tax but after National Insurance Contributions (NICs).

Gift Aid

If an individual makes a donation to an eligible charity, the charity can claim back from HMRC the basic rate tax they would have paid on the amount.

See Gift Aid

Lifetime ISA (LISA) rules changed to help people whose incomes are affected by Coronavirus

People whose income has been affected by Coronavirus and who want to access their Lifetime ISA funds early will have a reduced withdrawal charge of 20%, instead of 25%, between 6 March 2020 and 5 April 2021 (inclusive).
This measure is backdated and anyone who has made an early withdrawal from their LISA since 6 March and paid the 25% withdrawal charge will have the difference refunded.

See ISA Guide

COVID-19-related scams

Criminals are taking advantage of the package of measures announced by the Government to support people and businesses affected by Coronavirus.

HMRC has detected more than 80 COVID-19-related financial scams to date, most by text message and some by email and have asked Internet Service Providers (ISPs) to take down more than 100 web pages associated with these COVID-19-related scam campaigns.
HMRC ask you to help fight these scams by supporting their social media campaigns on Twitter, Linkedin and Facebook.
You can register to receive GOV.UK email phishing or scam alerts.

Agreed tax postponements automatically extended until end of June 2020

HMRC has written to customers whose tax payments had been postponed, due to them being affected by COVID-19, to say that the postponement has been extended to 30 June 2020. Customers do not need to contact HMRC about this now.
After 30 June 2020, HMRC will contact customers again to discuss their payment options to try and find a way of paying that they can afford.
Interest will be charged where applicable on the amounts outstanding within the postponement agreement until they are fully paid.

Deferring Self Assessment payments on account

Your clients can defer their payment on account due in July 2020 until 31 January 2021. This applies to any Self Assessment customer in financial difficulty due to COVID-19
HMRC will assume the deferral option has been taken if no payment is received as it is automatic with no application process.
HMRC will not charge interest or penalties on the deferred Payments on Account (POA), provided it is paid in full by 31 January 2021.

Your clients can also:

Pay their July POA as normal by 31 July 2020.
Pay their POA any time between now and 31 January 2021 as one payment or in instalments. You do not need to tell HMRC if clients choose to pay in instalments, but if they wish to add the July 2020 POA to an existing time to pay arrangement, they will need to contact HMRC to arrange this. No interest will be charged on the July payment in these circumstances.

See COVID 19: Deferring Income Tax payments

Moving goods between Great Britain and Northern Ireland

The government published the ‘UK’s Approach to the Northern Ireland Protocol’ command paper on 20 May 2020 and request assistance to help reach businesses who will be impacted by any new requirements for goods moving between Great Britain and Northern Ireland.
There is a form on GOV.UK for businesses to tell HMRC they will be impacted by the new processes for Northern Ireland goods movements and they can also sign up for email updates
If you have questions or would like to discuss further, contact This email address is being protected from spambots. You need JavaScript enabled to view it..

Coding-out of Self Assessment outstanding debt

Self Assessment outstanding debt identified as part of HMRC’s normal business review processes will have been notified to the customer by letter.
Where a customer has not engaged to identify ways to settle the debt, HMRC will write again to explain that they intend to collect the amount due through their PAYE Code number.
If the customer does not respond, HMRC will start to collect the debt through their PAYE Code immediately and this could be at any point during the current tax
Noting that this applies only to established Self Assessment outstanding debt and does not apply to the Self Assessment balancing payments process which remains unchanged.

Changes to Top Slicing Relief on life insurance policy gains

It was announced at the Budget on 11 March 2020 that legislative changes would be made regarding the calculation of Top Slicing Relief (TSR).

The new rules apply to gains arising on or after 11 March 2020 and allow reduced personal allowances to be recalculated within the calculation for TSR to provide additional relief for taxpayers whose entitlement to the personal allowance has been reduced because a gain has been included as part of their income for the year.
By concession, HMRC will apply the new rules to all gains arising in 2019-20.
The measure clarifies HMRC’s position with regards to beneficial ordering of reliefs and allowances within the TSR calculation. Allowances and reliefs available to a taxpayer must be set as far as possible against other income in preference to the gain.
An exclusion will be included on the e-filing exclusion list for 2019-20 to reflect the changes. For 2019-20 affected customers will receive a correction calculation from HMRC applying the new basis.

See Top Slicing Relief: How you slice it

Updates to the online disguised remuneration Loan Charge form

Taxpayers with outstanding disguised remuneration loans subject to the Loan Charge, the details must be reported using the online form on GOV.UK by 30 September 2020.
The form has been updated so that an election can be made to spread outstanding disguised remuneration loan balances evenly across the three years 2018-19, 2019-20 and 2020-21.
The deadline to make an election to spread outstanding disguised remuneration loan balances is 30 September 2020.
Paper copies of the form are available by calling 03000 599110. Clients subject to the loan charge who think they may have difficulties paying what they owe should contact HMRC on 03000 599110 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

See Disguised remuneration loan charge (subscriber guide)

Capital Gains Tax – payment for property disposals

From 6 April 2020, any UK resident disposing of a UK residential property and any non-UK resident disposing of UK residential and non-residential property must report and pay the Capital Gains Tax within 30 days from completion using a new online service accessible from GOV.UK.

See CGT: Payment of tax and Reporting capital gains: How to?

Application deadline date for Short-Term Business Visitors (STBV) under regulation 141 PAYE Special Arrangement applying for Appendix 8

For STBV’s operating under the previous PAYE special arrangement prior to 2020-2021, a deadline of 13 July 2020 has been set to provide HMRC with their decision to apply/move onto new Appendix 8 special arrangement or cease operating under any STBV special arrangement.

Student and or Postgraduate Loan Repayments

There are no changes to the Student loan and or Postgraduate loan (PGL) deductions process as a result of COVID-19.
Individuals whose income falls below the threshold for their loan type will not be due to repay their Student loan and or PGL.

Customs Declaration Service (CDS) Update: CHIEF/CDS Dual Running

More information can be found about the dual running of the CHIEF/CDS services on this edition of the Agent update and at GOV.UK.

PAYE COVID-19 and the tax treatment of reimbursed expenses for Home Office Equipment

The government has introduced a temporary new exemption on Income Tax and NICs for the reimbursement of expenses linked to the purchase of home office equipment and no liabilities will be due from 16 March 2020 until the end of the tax year 2020-21.
This new exemption does not replace the current exemptions at section 316 ITEPA 2003 that apply to equipment provided directly by an employer.

See COVID-19: Working from home

Employment Allowance claims for 2020-21 tax year

Before claiming EA:

Employers should continue to assess their own eligibility for EA before making a claim.
Only claim EA if you are eligible; by making the claim, you are declaring you have checked the criteria and are eligible, HMRC will not contact you to confirm this.
Include your business sector on your EPS, information on this can be found on GOV.UK.

After you have claimed:

You can use your EA against employer Class 1 National Insurance liability straight away.
If your business is undertaking economic activity, and you provided a business sector on your EPS, a letter will be issued to advise EA has been given as de minimis state aid. You don’t need to wait for the letter to start using the EA, but may need it if you apply for any other de minimis state aid
You can see details of EA in your Business Tax account PAYE statement.

See Employer's NIC allowance

Reminder for reporting Expenses and Benefits for the tax year ending 5 April 2020

The deadline for reporting any expenses and benefits is 6 July 2020.
Your client needs to do this for every employee they’ve provided with expenses or benefits. If you can’t do this above online, use official forms P11D and P11D(b).

See P11Ds: Top tips tool kit

Payrolling software updates

From 6 April 2020:

Organisations may see additional functionality in payrolling software; the ‘Off-Payroll worker subject to the rules’ indicator in PAYE Real-Time Information (RTI).’ This must only be used by public sector organisations, or agencies, for contractors working through their own limited company or other types of intermediary and providing services to public sector clients who are subject to the Off-Payroll Working rules.
- It is mandatory for these organisations from 11 May 2020.
For 2020-21, the indicator must not be used by private or voluntary sector organisations, by agencies for contractors working outside of the public sector or by contractors and their own limited companies. If you have used this indicator incorrectly, you must correct it urgently on a corrective Full Payment Submission for the relevant period.

Corporation Tax

Corporation Tax: Filing requirements at the end of a company’s life.

If a company receives a ‘notice to deliver a Company Tax Return’ from HMRC they must send a Company Tax Return (CT600).
Following discussions with the accounting profession, HMRC recognise that meeting the requirements to supply accounts detailed in Schedule 18, Finance Act 1998, Paragraph 3 is not always possible in informal and formal windings-up. They have changed their internal guidance to reflect that where an Insolvency Practitioner (IP) can clearly explain why they have not been able to source and supply company accounts, HMRC staff should take a pragmatic approach to accepting submissions and if necessary, contact the IP to discuss.

Unnecessary delays in Corporation Tax repayments

Companies are facing unnecessary delays in receiving repayments of Corporation Tax because company bank account details are not included on every CT600 (original or amendment) that they submit. To make the process quicker and to stop clients having to provide these in writing separately to HMRC, you should ensure these details are included.

Tax Disputes

If you have an appeal either with HMRC or at the Tribunal, that is currently held up by the COVID-19 crisis you may wish to consider HMRC’s Alternative Dispute Resolution (ADR) service, which is still accepting new applications and who, while travel restrictions are in place, are conducting all their mediations either online, by telephone, or by correspondence.

Update on the Trust Registration Service (TRS)

The new Trust Registration Service can be accessed via GOV.UK. Agents and Trustees can now use the new service to register the following types of Trusts:

A trust that was set up after the settlor died.
A trust created during their lifetime to gift or transfer assets.
A trust for a building or building with tenants.
A trust for the repair of historic buildings.

Agents and Trustees can also use the new service to:

View data held by HMRC.
Notify HMRC no changes have been made (declare no change).
Change trustee data.
Add new trustees and remove a trustee.
Change beneficiary details and add a new beneficiary or remove a beneficiary.
Add or change a settlor’s name.
Add or change a protector’s details.
Close a trust.
Claim a trust where it is registered by an Agent.
Authorise an agent.

If an Agent or Trustee needs to register a trust through a Deed of Variation or family agreement or a trust for the employees of a company this can currently only be done by accessing this form.

See UK trusts

Consultation deadline extensions

The following consultations have had their deadlines extended due to COVID-19.

Call for evidence on raising standards in the tax advice market: 28 August 2020.
HMRC Charter consultation: 15 August 2020.
Plastic packaging tax: 20 August 2020.

See COVID-19: New timelines for tax policy consultations

Tax Agent Toolkits: Annual refresh 2020

HMRC have recently refreshed 16 toolkits to assist you with completion of 2019/2020 Self Assessment Tax Returns which can be found here.

The Pensions Regulator (TPR) COVID-19 guidance: What your clients need to know

Your clients’ automatic enrolment and re-enrolment duties apply as normal, whether their staff are still working or are being furloughed as part of the Coronavirus Job Retention Scheme.
If your clients offer their staff a Defined Benefit (DB) pension scheme, direct them to TPR’s latest guidance, which has information on how to work with the scheme’s trustees if your clients need to temporarily reduce scheme deficit repair contributions.

Contact & HMRC service

HMRC is working with Tax Agents Blog. This provides another channel to communicate about consultations, news and updates and the rollout of new digital services for agents.
Complain to HMRC: to make a complaint against HMRC on behalf of your client you must be appointed as their tax advisor.
Email alerts for employers. Agents should encourage employers to register for email alerts to be notified about coding changes and information published on Government Web pages.
Where’s my reply? Find out when you can expect to get a reply from HMRC to a query or request you have made.
You can check the latest updates to HMRC manuals or subscribe to an automatic notification of change.
Future online downtime. HMRC provide information about planned downtime which will affect the availability of online services.
Staying safe online. HMRC continuously monitors systems and customer records to guard against fraudulent activity, providing regular updates on scams of which they are aware.
Phishing emails and bogus contact: a new type of phishing scam regarding ‘Tax Returns’, which is being circulated in high volumes, has been added.
Online training material and useful resources for tax agents and advisers. HMRC videos on YouTube, online learning modules and live and pre-recorded webinars are available for tax agents and advisers providing you with free help, learning and support on topical subjects.

Other content

Other recent publications

Agent forum and COVID-19 Information

A dedicated section has been created on the Agent Forum for COVID-19. This provides updates and links to information on GOV.UK including COVID Job Retention Scheme (CJRS) and Self-Employed Income Support Scheme (SEISS).
Agents may raise possible systemic issues and post queries on COVID-19 for clarification. Agent Forum staff give priority to COVID-19 responses and will liaise with Professional Bodies on the escalation of these and other high priority non-COVID-19 issues impacting agents

External link

Agent update June/July 2020