COVID-19: help and information
To help inform our clients and to enable them to understand how businesses can respond, recover and thrive in these times we are running a series of webinars focused on the economy, on particular sectors and on key roles within an organisation. You can register for future webcasts and view archived webcasts here. You can access more information here and also at our Deloitte global COVID-19 webpage. You can sign up to our Deloitte Tax Atlas COVID-19 Tax and Fiscal Measures microsite, which provides a high-level summary of tax and fiscal coronavirus measures that have been announced by governments, and our COVID-19 Signal Topic email alerts, here.
Coronavirus Job Support Scheme expanded
The Chancellor announced on 9 October that the government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restriction.
Chancellor’s Winter Economy Plan; Autumn Budget cancelled
The Chancellor delivered a statement on his Winter Economy Plan on 24 September 2020. HM Treasury published the Winter Economy Plan update and a press release on the announcement. Factsheets were released on the new Job Support Scheme (JSS), the Self Employment Income Support Scheme (SEISS), other tax measures, and loan schemes. The main announcements include:
JSS. This replaces the Coronavirus Job Retention Scheme (CJRS) from 1 November 2020 and is intended to run for six months. Employees under this scheme, who must be on an employer’s PAYE payroll on or before 23 September 2020, will be able to work on a part time basis as long as they are working at least 33% of their normal hours. If the conditions are met, employers will pay for the hours actually worked, while the government and employer pay a further third each of the remaining hours not worked. An illustration from HM Treasury shows an employee working 33% of normal hours, and receiving 77% of normal pay, ie 55% from the employer and 22% from the government. The government contribution will be capped at £697.92 per month. All SMEs with a UK bank account and PAYE scheme are eligible, but large businesses will not be unless their turnover has fallen. Employers who take up the JSS can continue to claim the Job Retention Bonus (the one-off payment of £1,000 to employers for continuously employing previously furloughed employees through to 31 January 2021 which was announced by the Chancellor when he presented his ‘Plan for Jobs’ to Parliament on 8 July 2020).
SEISS and self-assessment. The SEISS is to be extended. The new grant will be limited to self-employed individuals who are currently eligible for the SEISS and are continuing to trade but are facing reduced demand due to COVID-19. The new scheme will last for six months, from November 2020 to April 2021. It will be in the form of two taxable grants. The first will cover from the start of November 2020 until the end of January 2021, and cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875. The second will cover a three-month period from the start of February until the end of April 2021; the level will be set in due course. The plan also referred to Enhanced Time to Pay for self-assessment taxpayers. HMRC have since confirmed that self-assessment taxpayers can apply online for additional support to help spread the cost of their personal tax bill into monthly payments. From 1 October 2020, the limit for the online payment plan service has increased to £30,000 from £10,000 for self-assessment taxpayers. Individuals wishing to set up a self-serve Time to Pay arrangement must have no outstanding tax returns, have no other tax debts and have no other HMRC payment plans set up. The debt must be between £32 and £30,000 and the payment plan must be set up no later than 60 days after the due date of the debt. Interest will be applied to any outstanding balance from 1 February 2021.
VAT. The temporary 5% reduced VAT rate for hospitality and tourism is extended to 31 March 2021. Businesses which deferred VAT payments due between 20 March and 30 June will be able to repay them in 11 interest-free instalments during the 2021-22 financial year, rather than in full by 31 March 2021. A process allowing businesses to opt to pay by instalments will be introduced early in 2021.
There will also be provisions to ease the repayments of bounce-back loans, to extend the deadline for some loan applications and to provide for successor loan schemes. It has been confirmed that there will be no Budget this calendar year.
Job Retention Bonus: Treasury Direction; HMRC guidance
HM Treasury has published a Treasury Direction in relation to the Job Retention Bonus (JRB), the £1,000 one-off taxable payment to employers for each eligible employee that was furloughed and then kept employed until 31 January 2021, together with a press release explaining the JRB. HMRC have published the following guidance on the JRB, which can be claimed between 15 February 2021 and 31 March 2021:
Coronavirus Job Retention Scheme: updated HMRC guidance
HMRC have updated their guidance on the Coronavirus Job Retention Scheme (CJRS) as follows:
The information has been updated with the changes to the scheme. 30 November 2020 is the last day employers can submit or change claims for periods ending on or before 31 October 2020.
Commission to appeal Apple State aid case to CJEU
The European Commission has decided to appeal to the CJEU against the General Court's judgment of July 2020 in the Apple/Ireland State aid case. The General Court annulled the Commission's decision of August 2016 that Ireland granted illegal State aid to Apple via tax rulings issued by the Irish Revenue on the method to determine chargeable profits in Ireland. Ireland’s Minister for Finance has issued a statement reiterating Ireland’s contention that no State aid was given.
Update on freeports proposals
The government has published an update on its plans to create a number of freeports across the UK. A freeport is a secured area inside a country’s land border, but where different customs rules apply. Additional elements such as tax reliefs and regulatory relaxations may be included. Sea, air and rail ports in England will be invited to bid for freeport status before the end of the year. The House of Commons Library has published a briefing on the proposals.
BEIS consultation outcome: corporate transparency and register reform
In May 2019, the Department for Business, Energy & Industrial Strategy launched a consultation on proposals to enhance the role of Companies House and to increase the transparency of UK corporate entities. The government has published its response. Proposals include:
Revenue and Customs Brief 15(2020): import VAT recovery by non-owners
HMRC have issued Revenue and Customs Brief 15(2020) confirming their policy (as previously announced in Revenue and Customs Brief 2(2019) in April 2019) that import VAT can only be recovered by owners of imported goods. The new Revenue and Customs Brief acknowledges some of the practical points that were raised in response to this change in policy. For example, finance houses rather than their customers are, in HMRC’s view, responsible for VAT when leased assets are imported. Retailers should not use their own duty deferment account if goods belong to their suppliers when they leave a customs warehouse. Affected businesses should consider whether customs special procedures could soften the impact of this policy change, but neither they, nor postponed VAT accounting, (which HMRC also mention) are likely to provide a complete solution. With the end of the transition period fast approaching, and the number of imports set to markedly increase, any business involved in overseas trade should review its supply chains to establish whether it is accounting for VAT in line with HMRC’s policy. (Contact: Andrew Clarke).
Upcoming Dbriefs webcasts
We have Dbriefs webcasts over the next few weeks covering: UK Tax Monthly Update, Notification Of Uncertain Tax Positions: What Does The Future Hold?, UK Coronavirus Job Support Scheme - An Introduction To Eligibility, Required Employer Funding And Submitting Claims, Year End Transformation - Plan Now To Optimise Resilience, SAP S/4HANA: The Tax Digital Boardroom, Overview Of The Implementation Of Anti-Hybrid Rules In Response To ATAD II, US Tax Policy: 2020 Election Update And 2021 Preview.