The VAT deferral new payment scheme

The VAT deferral new payment scheme is open for all businesses who deferred VAT due between 20 March and 30‌‌ ‌June‌‌ ‌2020 and still have payments to make, or who are unable to pay in full by 31‌ ‌March‌‌ ‌2021. This includes those on Payment on Account and Annual Accounting schemes.

You can apply now to spread these payments over a number of months – the later businesses join the fewer instalments are available to them. Businesses should join by 19‌‌ ‌March‌‌ ‌2021 to benefit from the maximum number of 11 instalments.

Businesses can join the scheme quickly and simply online without the need to call HMRC. To find out more information, including the things you need to do before joining, go to GOV‌‌‌.UK.  You will need to apply by or before 21‌‌ ‌June‌‌ ‌2021 if you want to join the scheme online

Fourth SEISS grant – Eligibility and calculation

Much of the eligibility criteria remains unchanged from the third grant, with notable exceptions that an individual must:

• have submitted their 2019-20 tax return by 2 March 2021
• have trading profits that are at least nil (not a trading loss), based on their 2019-20 tax return, or an average of tax years 2016-17, 2017-18, 2018-19 and 2019-20
• have trading profits that are no more than £50,000 and at least equal to their non-trading income, based on their 2019-20 tax return, or an average of tax years 2016-17, 2017-18, 2018-19 and 2019-20
• have been trading in the tax years 2019-20 and 2020-21.

Full eligibility criteria can be found on GOV‌‌‌.UK.

The reasonable belief declaration which has been in effect for the second and third SEISS grants remains in effect. There is no turnover test for the fourth SEISS grant.

Claiming the fourth SEISS grant

HMRC will contact potentially eligible customers from mid-April with a personal claim date. These customers can claim at any time from their personal claim date until the claims service closes on 31‌‌ May.

Extension to the CJRS

As announced in the 2021 Spring Budget, the CJRS has been extended until the end of September‌‌ ‌2021.

For periods from 1 ‌May ‌2021 onwards, employers will be able to claim for eligible employees who were on their PAYE payroll on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.

The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June‌‌ ‌2021.

For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.

Employers will need to continue to pay furloughed employees at least 80% of their usual wages for their hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, they will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.

Employers must continue to pay Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

Clearly there is a lot of information to digest here, if you would like NSG to make sense of it all in relation to your business or personal needs, please get in touch.