Government and HMRC Updates
The government and HMRC have issued various items of new and updated advice related to how businesses can manage the effects of the COVID-19 pandemic.
COVID-19 Self-Isolation Payment
A new HMRC government city benefit scheme was launched on 1 September 2020 which will see eligible individuals receiving up to £182 if they are required to self-isolate due to COVID-19. Initially it will apply only in certain areas in England which are affected by local lockdowns.
To be eligible for this new payment, individuals must:
- be employed or self-employed
- be receiving either working tax credit or Universal Credit
- have tested positive for COVID-19 or have been formally advised to self-isolate due to the positive test of a close contact
- be unable to work from home for the duration of their self-isolation period
- be at risk of losing income as a result of self-isolation
To receive a payment, eligible individuals will need to provide:
- official notification from NHS Test and Protect
- a bank statement
- proof of employment / self – employment
Under the terms of the initial trial, the payment arrangements for this benefit are as follows:
- individuals confirmed as infected with COVID-19 will receive £130 for their 10-day period of self-isolation
- other eligible members of their household will receive £182 for their 14-day period of self-isolation
- non-household close contacts who are officially advised to self-isolate will receive £14 per day, up to a maximum of £182, for their maximum 14-day period of self-isolation
The government anticipates that payments will be made to affected individuals within 48 hours of the necessary evidence being provided. For more information on this scheme, please visit https://www.gov.uk/government/news/new-payment-for-people-self-isolating-in-highest-risk-areas.
Coronavirus Job Retention Scheme Compliance Checks
HMRC have begun the next phase of compliance checks on the Coronavirus Job Retention Scheme. It has written to approximately 3000 employers who it believes have been overpaid through the scheme.
Letters have been sent to employers if the HMRC believes:
- the business may have claimed more CJRS grant than they are entitled to
- the business may not meet the conditions to receive the grant
For further details on what may constitute an overclaim/overpayment, and how to notify HMRC, please see SELECT’s guidance on Overclaimed CJRS Payments.
End of VAT Payment Deferrals Period
At the start of the COVID-19 pandemic, HMRC gave businesses the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021 without incurring any penalties or late payment interest.
The scheme ended on 30 June 2020, so business must now ensure that arrangements are made to complete any deferred payment by the deadline.
Some employers who have submitted their P11Ds in good time are now receiving warning letters, asking them to submit these records. This is likely to be because there are not enough staff to process P11Ds within usual timeframes at HMRC.
If an employer is sure they have submitted their P11Ds already, and have received a warning letter anyway, this can be disregarded.
Variation of Self-Employment Income Support Scheme (SEISS) for Parents
Self-employed parents whose trading profits reduced in 2018/19 because they took time out to have children will now be eligible to make a SEISS grant application based on trading profits from a different specified time period.
Parents and adopters who took time out of trading to care for their children in the first 12 months since birth / adoption placement will now be able to use either their 2017/18, or both their 2016/17 and 2017/18 self-assessment returns as the basis for their eligibility for the SEISS.
Other standard eligibility criteria for this scheme remain, and for more details, please see SELECT’s guidance on Self-Employed Income Support Scheme.
Law Guarantees Redundancy Payments Based on Pre-furlough Pay
Employers are reminded that an employee who has previously been on furlough and who goes on to be made redundant, is entitled by law to receive any redundancy payment which they are eligible for based on their pre-furlough wages. For further guidance on this and other aspects of redundancy, please see SELECT’s suite of redundancy guidance documents, and the government’s official guidance.