Monthly Archives: August 2020

Penalties for breaches of furlough and self-employment scheme rules confirmed

HM Revenue & Customs (HMRC) has set out full details of the penalties that will apply to employers and self-employed individuals who are found to have breached the rules of the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).

A factsheet published by HMRC confirms that employers that have over claimed CJRS

grants and have not made a repayment should notify HMRC by the latest of:

  • 90 days after receiving the grant they were not entitled to;
  • 90 days after a change of circumstances that meant they could not retain a grant; or
  • 20 October 2020.

HMRC says that employers that were not aware they had been overpaid when they received the grant or when circumstances changed will not be charged a penalty. However, they will need to repay the amount overpaid.

Where HMRC finds that an employer has received an overpayment, it will carry out an assessment of an Income Tax charge to recover the overpayment. This will be equal to the amount overpaid, or not used within a reasonable period to make furlough payments to employees or to cover associated costs. The charge must be repaid within 30 days, after which interest and penalties will apply.

If an overpayment has been received, but HMRC has not made an assessment, employers must detail the overpayment on their Corporation Tax return or Self-Assessment tax return.

Where a company has received an overpayment and the company officers knew of an over claimed CJRS grant when it was received, or another time when a tax liability arose, or they were aware that the grant was not used for its intended purpose, and the repayment cannot be recovered from the company because of insolvency, company officers can be made personally liable for the amount owed.

If an employer fails to notify HMRC within the relevant period, a penalty of up to 100 per cent of the CJRS grant they received but were not entitled to and which they do not repay by the last day of the notification period, will be charged. This means employers could have to pay more than twice the amount of an overpayment in these circumstances.

Deliberate defaulters could also have their details published under the Publishing Details of Deliberate Defaulters (PDDD) policy.

Specific arrangements apply to partnerships. Partners will be held jointly and severally liable for the overpayment. If HMRC does not issue an assessment, one of the partners will need to include the charge on their 2020-21 Self-Assessment Tax Return.

Meanwhile, HMRC has published a separate factsheet detailing penalty arrangements for the SEISS.

Self-employed individuals in receipt of an overpayment or a grant they were not entitled to must notify HMRC by the later of:

  • 20 October 2020; or
  • 90 days after receiving the grant.

As with CJRS overpayments, HMRC will issue tax assessments for overpayments that have not been repaid. These will need to be paid within 30 days to avoid interest and penalties being applied.

Self-employed individuals who are concerned about making a payment can contact HMRC’s Payment Support Service on 0300 200 3835.

Where an overpayment has been repaid, it does not need to be included on a 2020-21 Self-Assessment Tax Return. However, self-employed individuals who have received an overpayment but do not receive a tax assessment should include it on their 2020-21 Self-Assessment Tax Return.

If a self-employed individual does not notify HMRC of an overpayment within the notification period, they will be charged a penalty, based on the overpaid amount owing on the last day of the notification period.

Penalties will only apply to self-employed individuals who were not eligible for the grant and were unaware that this was the case if they do not repay the grant by 31 January 2022.

Furthermore, specific arrangements apply to partners and partnerships in receipt of overpayments or grants they were not entitled to, with partners held jointly and severally liable for overpayments or claims they were not eligible for that were subsequently paid into the partnership.

Where a self-employed individual or partner does not agree with HMRC’s assessment, it is open to them to appeal against the decision, through a process set out in the guidance.

Link: Self-Employment Income Support Scheme – receiving grants you were not entitled to

Link: Coronavirus Job Retention Scheme – Receiving grants you were not entitled to


Reminder: VAT payment deferral period has ended

The financial support offered by the Government through the VAT payment deferral scheme has come to an end. This period, which was intended to support businesses struggling with the impact of COVID-19, ended on 30 June 2020. You must now pay any VAT due after this date on time as HM Revenue & Customs (HMRC) may apply surcharges.

You should also ensure that you have the funds necessary to pay any VAT payments that have been deferred between 20 March and 30 June, as they will need to be paid in full by 31 March 2021.

If you are concerned that you may not be able to pay your VAT bill on time you should contact HMRC and ask for a time to pay arrangement. If you fail to do this and do not make a payment on time you may be penalised.

Banks list top 10 Coronavirus scams

Throughout this ongoing pandemic, fraudsters have attempted to play on people’s fears to try and trick them out of their hard-earned cash.

Now UK Finance, the trade body for the British banking sector, has issued a list of the most common scams to help people identify them.

The ten scams to be wary of include:

  1. Fake government emails– Emails that pertain to be from government departments offering grants of up to £7,500. These often contain links that steal personal and financial information.
  2. Financial relief emails– These often offer “Covid-19 relief funds”, which encourage people to hand over sensitive personal information.
  3. Council tax reduction– These emails, offering support with council tax payments, contain links that lead to a fake government website that harvests personal and financial information.
  4. Benefits scam– This scam offers help applying for universal credit, however, they allow fraudsters to grab some of the payment as an advance for their ‘services’.
  5. Track and trace– Fraudsters are sending communications which suggest that a victim has been in contact with someone that has COVID-19. These will often include links to a fake website that contains viruses or attempts to steal information.
  6. PPE scam– These sites and emails often offer ‘bargain’ price PPE, such as hand sanitizer or face masks. However, once payment is made no goods are sent and the victim is often unable to contact the seller.
  7. Fake emails and texts claiming to be from TV Licensing– Many victims of this scam are told they are eligible for a six month TV licence for free because of the pandemic. They are then told there is an issue with their direct debit and they are asked to provide important financial information, such as their bank details.
  8. TV subscription services– Fraudsters are posing as representatives for TV and streaming services, such as Sky. They often ask for payment details to reinstate services by clicking on a link, which is then used to steal credit card information.
  9. Social media scams– Scammers are using social media to manipulate victims into handing over money. Often criminals will use identities of real people to ask for ‘support and financial help’.
  10. Fake investment opportunities– Often advertised on social media sites, they encourage victims to “take advantage of the financial downturn”. This is particularly prevalent for cryptocurrency platforms, where less sophisticated investors are easily caught out.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “During this pandemic, we have seen criminals using sophisticated methods to callously exploit people’s financial concerns to trick them into giving away their money or information.”

The trade body is encouraging people to stay alert and avoid falling for sophisticated schemes by seeking advice from a friend, family member or trusted adviser.

The list of scams has been published as local councils report a 40 per cent increase in reported scams since the start of lockdown and Citizens Advice estimates that one in three people have been targeted by a scammer during the pandemic.

Link: UK Finance reveals ten Covid-19 scams the public should be on high alert for

Government extends childcare funding for families affected by the pandemic

The Government has extended childcare funding for families affected by the Coronavirus outbreak.

Parents or carers who are usually eligible for Tax-Free Childcare or 30 Hours Free Childcare but whose income has fallen temporarily below the minimum income requirement as a consequence of Coronavirus will continue to receive support until 31 October 2020.

Meanwhile, critical workers whose incomes increased above the income threshold for the 2020-21 tax year as a result of working more hours to tackle the pandemic will continue to receive support for the duration of the current tax year.

Tax-Free Childcare offers parents and carers a Government top-up with £2 for every £8 paid into a child’s account up to a maximum of £2,000 per child, or £4,000 per disabled child, in financial support. The funds can be used to pay for qualifying childcare for children up to the age of 11, or 17 for disabled children.

The 30 Hours Free Childcare scheme is provided by the Department for Education (DfE) for eligible three and four-year-olds in England and benefited nearly 350,000 children in January 2020.

Parents must reconfirm their eligibility for the two schemes every three months to continue receiving support.

Green Homes Grant guidance published

The Government has published further details of the Green Homes Grant, announced by the Chancellor at his Summer Economic Update on 8 July.

The scheme provides vouchers worth up to £5,000 for most homeowners or £10,000 for households on low income to install energy-saving primary measures, including:

Insulation: Solid wall, cavity wall, under-floor, loft, flat roof, a room in roof, park home.

Low carbon heat: Air source heat pump, ground source heat pump, solar thermal

Householders installing or upgrading primary measures, can then also use them towards secondary measures, including:

  • Draught proofing
  • Windows and doors: Double/triple glazing (where replacing single glazing), secondary glazing (in addition to single glazing), upgrading to energy-efficient doors (where replacing doors installed before 2002).
  • Heating controls and insulation: appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed start thermostat, thermostatic radiator valves.

However, funding towards secondary measures is capped at the level of funding provided for primary measures.

The funding can be used for properties, including:

  • All owner-occupied homes (including long-leaseholders, shared ownership)
  • Landlords of private rented sector domestic properties
  • Landlords of social sector domestic properties (including LA owned homes)
  • Park home owners (for residential sites including Gypsy and Traveller sites)

However, new-build domestic properties and non-domestic properties are not eligible for the scheme.

Later in August, households in England will be able to access advice on improving energy efficiency through the Simple Energy Advice Service, which will suggest home improvements. Households will then be able to apply for vouchers covering around two-thirds of the cost.

They will be provided with a list of approved TrustMark and MCS-registered tradespeople in the local area who can carry out the work.

It is expected that the first vouchers will be issued from the end of September.

Eat Out to Help Out opens for claims

With the first week of the Eat Out to Help Out scheme now concluded, the online portal is opening for pubs, bars, restaurants and certain other hospitality venues to claim funds from the scheme.

The scheme offer grants covering the whole cost to restaurants, cafes and pubs that sell food of providing a 50 per cent discount, capped at £10 per head, on food and non-alcoholic drinks purchased for consumption on the premises from Mondays to Wednesdays in August.

Eat Out to Help Out is open to businesses that were registered with their local authority as food businesses on or before 7 July 2020, provides or shares a dining area for eat-in meals and sells food for consumption on the premises.

Those offering the scheme have been able to register since 13 July to take part, however, it has only been possible to make claims from the scheme since 7 August 2020.

Participating venues can only claim seven days after registering and can only claim once each week, with payments being made within five working days of claiming.

The deadline for making claims is 30 September 2020.

To claim, venues must record and submit:

  • total number of diners who have used the scheme discount
  • total value of all eat in food and non-alcoholic drink sold where the scheme discounts were given
  • total value of scheme discounts given and claimed for

Venues must submit claims themselves and cannot use an agent to do so on their behalf.

Key dates for Coronavirus support schemes

With numerous Government schemes open to businesses and individuals to help deal with the impact of the Coronavirus outbreak, there are dozens of key dates to be aware of in the coming months, including:

31 August 2020

Eat Out to Help Out closes to customers.

1 September 2020

Grants from the Coronavirus Job Retention Scheme (CJRS) taper down to 70 per cent of a furloughed employee’s usual wages up to £2,187.50 a month, with employer required to contribute another 10 per cent, so that furloughed employees continue to receive 80 per cent of their usual wages.

30 September 2020

The deadline for venues to claim from the Eat Out to Help Out scheme.

1 October 2020

Grants from the CJRS taper down to 60 per cent of a furloughed employee’s usual wages up to £1,875 a month, with employer required to contribute another 20 per cent, so that furloughed employees continue to receive 80 per cent of their usual wages.

31 October 2020

CJRS closes. Employees can no longer be furloughed after this date.

30 November 2020

Last date for making claims for the CJRS.

31 January 2021

Deadline for Self-Assessment payments on account deferred from 31 July 2020.

Date until which staff previously furloughed under the CJRS, who have been brought back and paid £520 on average from October to January must be continuously employed for the employer to qualify for a £1,000 Job Retention Bonus.

31 March 2021

Deadline for payments of VAT payments deferred between March and June 2020.

We have also prepared a grid of Government support timeframes to help clarify the support available at any point in time over the coming months.