Despite the COVID-19 lockdown continuing into July, it looks like being a busy month for businesses and their accountants with a long list of things to do before the end of the month.
The start of July is always a busy time for employers and accountants running payrolls. The upcoming changes to the COVID-19 support measures mean that this year will be even busier, though the usual urgency to finish tasks before the start of the summer holidays is probably less prevalent this year.
HMRC confirmed in their latest Employer Bulletin that the July Employer deadlines have not been extended due to the pandemic but that it can be a reasonable excuse for late returns if you are affected by the virus.
Here are our top seven deadlines you cannot afford to miss this July and why.
Employers and employees
1. Claim under the Coronavirus Job Retention Scheme (CJRS) for periods to 30 June by 31 July.
The CJRS rules applying to employers who have furloughed staff are changing from 1 July and you only have until 31 July to claim for periods ending on or before 30 June.
- If you miss the deadline you may not receive a grant for pre-30 June pay periods and will have to cover your employees’ wages, plus Employers NIC and pension contributions, yourself.
2. File forms P11D and P11D(b) by 6 July and pay Class 1A NICs by 19/22 July
Employers must report non-payrolled benefits provided to employees by reason of their employment to HMRC on form P11D which must be accompanied by form P11D(b) showing the Class 1A NIC due.
- Penalties for late form P11D(b): £100 per every 50 employees (or part of 50) per month or part month. Interest is charged on late payment of Class 1A NICs plus penalties on payments over 30 days late.
3. File Employment-Related Securities returns by 6 July
This applies where an employer gives shares to an employee or sets up a tax-advantaged share/share option scheme during the tax year.
Employers must register share schemes with HMRC and file online annual returns for all registered schemes by 6 July after the end of the tax year, to include details of all reportable events in the tax year.
- Once a scheme is registered, even if there are no reportable events a nil return is still required
- Late returns incur a minimum penalty of £100 per return.
4. Make good non-payrolled Benefits In Kind by 6 July
Employees who receive Benefits In Kind (BIKs) such as company cars or interest-free loans can reduce their tax liability on the benefit by making good some or all of the cost to the employer.
- This must be done by 6 July after the end of the tax year for the amount of tax due to be reduced.
- Payments can be made after this date e.g. where it is a requirement of the employment contract, but they cannot be taken into account in calculating the tax due on the benefit.
5. Self-employed: Claim first grant under the Self-Employed Income Support Scheme (SEISS) by 13 July.
The first grant under SEISS covers three months and must be claimed by 13 July as the second reduced grant runs from 14 July.
- If you are eligible and do not claim by the deadline you risk losing up to £7,500 in taxable income.
- Noting that accountants cannot make claims for their clients under this scheme, the taxpayer must make them.
6. Reinstate direct debit payments and prepare to pay VAT for payments due on or after 1 July.
The deferral of VAT payments under the government’s COVID-19 support package ends on 30 June 2020 meaning all VAT liabilities due after that date must be paid as normal.
Businesses must remember to reinstate their VAT direct debits in time for their relevant VAT payment date and should contact HMRC if they anticipate difficulties in meeting their post 30 June VAT payments.
- Late paid VAT attracts interest and surcharges unless it is the first default or there is a reasonable excuse for the late payment: Coronavirus may be accepted as a reasonable excuse in some circumstances.
Capital Gains Tax (CGT)
7. Report disposals of residential property made between 6 April and 30 June 2020, by 31 July.
From 6 April 2020, CGT on all UK residential property sales must be declared and a payment on account made to HMRC within 30 days of completion. Due to COVID-19 HMRC announced a 'soft landing' period for failure to report gains under the new deadline, with no penalties to be charged until after 31 July 2020.
- Any gains within this period and thereafter which are not reported within 30 days will incur late filing penalties starting at £100 with daily penalties after three months.