One-Off Payment for Eligible Working Households Receiving Tax Credits
As part of the Spring 2021 Budget, the Chancellor announced a new one-off £500 payment to support working households receiving tax credits.
We’ve started to make payments to eligible customers and we expect all customers will have received the payment by 23 April.
The one-off payment is for those households who, on 2 March 2021, were receiving either:
- Working Tax Credit; or
- Child Tax Credit and were eligible for Working Tax Credit but did not get a payment because their income was too high to get Working Tax Credit payments.
There’s more information on the one-off £500 payment on GOV.UK.
Self-Employment Income Support Scheme (SEISS)
The online claims service for the fourth grant of the Self-Employment Income Support Scheme (SEISS) is now open to all eligible customers. The claims service will close on 1 June 2021. To help you support my constituents, here are the latest updates on the scheme and information which you may find useful.
Upcoming customer contact
In the next few days HMRC will be contacting customers who we believe are eligible for the fourth SEISS grant but have yet to submit a claim, and have previously asked for extra support. HMRC have provided contact information, should constituents need any help.
Calculation of the fourth SEISS grant – impact of including 2019-20 returns
The fourth SEISS grant takes into account the 2019-20 tax return, reflecting the most recently available data on a customer’s business profits. This means that customers who received previous grants may find that the amount of the fourth grant is higher or lower than past SEISS payments. The grant calculation is based on an average of the 2016-17, 2017-18, 2018-19 and 2019-20 tax returns, where this information is available.
There is a very small number of customers where we may not use the 2019-20 tax return in the calculation of the fourth SEISS grant; for example, when considering some people who tell us they are new parents, and customers with a loan charge.
If a customer is not eligible for the fourth SEISS grant
Customers who claimed at least one of the first three SEISS grants, but are not eligible for the fourth grant, should have received an email from us in mid-April.
Some customers may have anticipated that they would be ineligible for the fourth grant after reading the published guidance. For those who were unsure of the reason for their ineligibility, there are instructions in the email they received on how to find this information through the online claims service. Please note, agents should not access the claims service on their client’s behalf.
Once a customer has viewed their reasons for ineligibility via the online claims service, they should consider whether it is accurate and applicable to their circumstances.
If, after consideration, they believe the ineligibility reasons are incorrect, the customer will need to select the ‘If you don’t agree’ option. This will present them with two ways to begin their review: the coronavirus helpline number (0800 024 1222) and a webchat service. The outcome will be communicated by letter, which we aim to send within 10 working days of receiving the review. It is likely that we will request evidence during the review process.
If a customer in your constituency is unable to access the online claims service to find their reasons for ineligibility, they can call the coronavirus helpline (0800 024 1222) instead.
If a customer in your constituency is no longer eligible for the SEISS, they may be eligible for other UK Government support, including: Restart Grants, the Recovery Loan scheme, business rates relief and other business support schemes. More details can be found on GOV.UK.
Amending tax returns and the impact on SEISS grants
This section applies to claims for the fourth and fifth SEISS grants only, and amendments made to tax returns for 2016-17, 2017-18, 2018-19 and 2019-20. This section does not apply to the first three SEISS grants.
If a customer was entitled to their SEISS grant at the time of claim, but subsequently ceases to be entitled to all or part of the grant following an amendment to a tax return, when the amendment was made on or after 3 March 2021, they need to contact us if that would reduce the value of the grant by £100 or more.
This should be done within 90 days of making an amendment to their tax return, or receiving the grant – whichever is later. If a customer does not contact us, they may be charged a penalty. After they have contacted us, we will be able to advise them of the amount they will need to repay and how they can do this.
We will update guidance on GOV.UK in mid-May with full details of how customers should contact us regarding amendments and what will happen when they do. We’ll also include this in a future email update to you.
Customers receiving their personal claim dates
HMRC have begun contacting eligible customers to give them a personal claim date, from which they can make their SEISS claim. HMRC have contacted them either by email, letter or via the online service, depending on what contact details we hold.
Customers can make their claim from this personal claim date in late April, until the claims service closes at 23:59 on 1 June 2021.
Customers should not to claim SEISS before their personal claim date.
A customer who believes they are eligible for the scheme, but are yet to hear from us, should wait until the end of the month before contacting us. We are inviting customers to claim on different days to ensure the system is fast and easy to use, so we can support millions of people quickly and easily.
Contacting ineligible customers
We have also contacted customers who have previously claimed SEISS support but are no longer eligible. There are a number of reasons for ineligibility, for example:
- not filing their 2019-20 Self Assessment return on or before 2 March 2021
- if the information on their 2019-20 Self Assessment return means they no longer meet the eligibility criteria, or
- if they’ve permanently ceased trading.
If a customer believes that we have incorrectly assessed their eligibility, or the amount of their grant, they should follow the advice provided in the email or letter we sent. They will either be asked to log into the claims service using their Government Gateway credentials or, if we consider they are ineligible for the SEISS, they can use the online assistant to find out why. If the customer still needs help after following this advice, they can get support from the COVID-19 helpline.
As before, tax agents should not submit review requests on behalf of their clients, as this can lead to delays. We can only discuss SEISS claims with the individual customer.
Getting customers ready to claim SEISS grants
Customers will be able to claim at any time from their personal claim date in late April until 1 June, at the latest. In order to claim, they will need to log in to their Government Gateway account with their User ID and password. If they do not have a Government Gateway account (for example, customers who are newly self-employed), they should create one now to avoid delaying their claim.
To confirm their eligibility and make their claim, customers will need their:
- National Insurance number: If a customer doesn’t know this, they can go to the HMRC app or access their online Personal Tax Account (PTA).
- Self Assessment Unique Taxpayer Reference (UTR) number: customers can find this on their Self Assessment papers or their PTA.
- Government Gateway user ID and password: To avoid delays, customers should check that they can log in to the Government Gateway before their personal claim date. If a customer doesn’t have an account, or has forgotten their details, they can follow the instructions on GOV.UK. Customers also need to check that their contact details are correct in their Government Gateway account.
- Bank account number and sort code: For a building society account, customers should include the roll number, if they have one.
We will also ask for the address that the customer’s bank or building society account is registered to. Please note this is the customer’s address – most likely their home or business premises – not the address of their bank or building society.
As with previous SEISS grants, tax agents cannot make a claim on behalf of their clients, or use their log in details, as this will trigger a fraud alert and result in significant delays to their client receiving payment. We are grateful for tax agents continued support in helping their clients to understand the eligibility criteria, and for getting their eligible clients ready to submit their claims personally.
Customers are also required to keep appropriate records as evidence of the impact on their business.
If a customer hasn’t claimed before
If this is a customer’s first time claiming a SEISS grant, they may be asked additional questions to prove their identity.
Questions could relate to any of the following:
- their UK passport
- information held on their credit file (such as loans, credit cards or mortgages)
- their Self Assessment tax return (within the last three years)
- their tax credit claim
- their P60
- one of their three most recent payslips.
Customers should ensure they have this information ready when making their claim. Their claim may be delayed if they cannot answer the identity verification questions.
In order to claim the fourth grant, customers must reasonably believe that they’ll suffer a significant reduction in trading profits, due to reduced business activity, capacity, demand or inability to trade due to coronavirus between 1 February 2021 and 30 April 2021. They must keep evidence that shows how their business has been impacted by coronavirus resulting in less business activity than otherwise expected.
HMRC expects customers applying for SEISS 4 to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.
Before making a claim, a customer must decide if the impact on their business between 1 February 2021 and 30 April 2021 will cause a significant reduction in their trading profits for the tax year they report them in.
HMRC cannot make this decision for the customer because individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.
Customers should wait until they have a reasonable belief that their trading profits are going to be significantly reduced, before they make their claim.
Customers do not have to consider any other coronavirus scheme support payments that they have received when deciding if they’ve had a significant reduction in their trading profits.
There are some examples that customers can use to help them decide.
Amendments to 2019-20 SA returns after 3 March 2021
If a customer makes, or has made, an amendment to their 2016-17, 2017-18, 2018-19 or 2019-20 tax return on or after 3 March 2021, HMRC must be notified within 90 days if the amendment either:
- lowers the amount of SEISS grant the customer is eligible for
- causes the customer to no longer be eligible for a SEISS grant.
The customer may need to pay back some or all of the grant. If we are not notified, we will contact the customer after the deadline for making amendments to tell them what amount they may need to pay back.
If HMRC is not notified within 90 days, the customer may also have to pay a penalty.
HMRC does not need to be notified if either:
- the amount they’re eligible for is lowered by £100 or less
- they are no longer eligible and the grant they received was £100 or less.
If a customer is not sure the grant amount has been reduced, they should contact HMRC for further help.
SEISS Eligibility for Parents
Applications for the fourth Self-Employment Income Support Scheme (SEISS) grant open in late April 2021. Parents may be eligible even if they have taken time off, provided they meet the specific eligibility criteria.
If having a new child has affected a customer’s 2019/20 tax return, we may consider their eligibility in a different way. This would apply where a customer’s trading profits or total income in their 2019/20 tax return meant that they did not meet the eligibility criteria for the grant, or they did not submit a tax return for 2019/20.
For new parents who did not submit a 2019/20 Self Assessment tax return, we will assess eligibility using an average of the applicable 2016/17 to 2018/19 tax returns.
For parents to be eligible for SEISS 4 they must be a self-employed individual or a member of a partnership. Their average trading profits across their applicable 2016/17 to 2018/19 tax returns, must be no more than £50,000 and at least equal to their non-trading income. They must be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.
For more information on eligibility visit GOV.UK. An explanatory video is also available.
A full range of business support measures is available to UK businesses on GOV.UK.
Coronavirus Job Retention Scheme (CJRS)
April CJRS Claims
The deadline for employers in your constituency to submit April furlough claims is Friday 14 May.
Employers can currently claim 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
They can claim before, during or after their payroll is processed. Employers should provide the exact number of hours their employees will work, so they don’t have to amend the claim later.
What employers in your constituency need to do now
- Check if they’re eligible and work out how much they can claim using our CJRS calculator and examples.
- Submit any claims for April no later than Friday 14 May.
- Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them.
Employers should remember that they must pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant, as this is a condition of applying for the grant.
May CJRS Eligibility
If employers have employees who have previously been ineligible for the CJRS, as they were not on their payroll on 30 October 2020, they may be eligible for periods from 1 May 2021 onwards.
For claim periods from May, employers can now claim for eligible employees who were on your 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.
Employers and their employees do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.
Changes to CJRS claims for variable pay from May
For periods from 1 May, when calculating the average wages for employees who are not on a fixed salary, employers should no longer include periods of:
- statutory sick pay related leave
- family related statutory leave
- reduced rate paid leave following a period of statutory sick pay or family related leave.
However, if an employee was on one of these types of leave for the entire period used to calculate their average wages, then the employer should continue to include the days and wages related to that leave.
For more information on variable pay calculations, go to GOV.UK.
FAQ: Can a CJRS grant be used to pay for holiday leave?
If employers have furloughed employees because of the impact of the pandemic on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave.
If an employee is furloughed for only some of their hours, employers can count all time taken as holiday as furloughed hours, rather than working hours. This means employers can currently claim for 80% of their employee’s usual wages when they’re on leave.
In line with the Working Time Regulations, if a furloughed employee takes holiday employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. They may need to top up their employees’ pay to 100% of their normal hourly rate or salary. More information is available on GOV.UK.
FAQ: Can an employer still use the CJRS if they’re starting to re-open their business?
Employers can continue to use the CJRS if their business is affected by coronavirus. They don’t need to place all their employees on furlough. They can also use the CJRS flexibly to bring their employees back to work for some of their usual hours. They can claim for a portion of the usual wage costs for the hours spent on furlough.
FAQ: How can employers claim through the CJRS?
The UK Government will continue to pay 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
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 pay the difference from July, so that they continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
Employers must also pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant to us.
The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30 June 2020 and have been unable to pay in full by 31 March 2021.
Businesses can apply now to spread these payments – businesses that join by 19 May 2021 can pay in up to nine monthly instalments. The later businesses join, the fewer instalments will be available to them.
Businesses can join the easy-to-use scheme quickly and simply online by 21 June, without needing to call us. To find out more, including what businesses need to join online, go to GOV.UK.
If businesses are still unable to pay and need more time, they should contact us.
Businesses may be charged a 5% penalty and/or interest if they do not pay in full, sign up to the scheme or get in touch with us to make an arrangement to pay by 30 June 2021.
Off-Payroll Working Rules
The off-payroll working rules changed on 6 April, and we are continuing to provide support to help your constituents to understand and comply with the rules.
Please help us by sharing this information to those affected.
Organisations and individuals who haven’t prepared, or who may need further support to implement the rules, should use HMRCs education and support. This includes webinars, where customers can ask us questions directly, with dates currently available until the end of May.
For contractors who might be changing the way they work, we are also providing information to help. We have recently published guidance to help contractors who are engaged through umbrella companies understand how they work and how they are paid, and are signposting contractors to information published on spotting signs of tax avoidance for anyone changing the way they work.
We have also recently updated our communications page with material which can help you, and other stakeholders, to support those affected. This includes specific material for contractors, and social media graphics and blogs which can be shared.
You and your constituents should be assured, we are continuing to build insights into how the changes are affecting organisations and individuals and targeting our support and education where it is most needed.
Fraud and Scams
As part of the Budget, the Chancellor announced a Taxpayer Protection Taskforce to tackle the minority who deliberately claim money they’re not entitled to. If fraud is suspected, it should be reported using our online form. More information can be found on GOV.UK.
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic. Information on how to recognise genuine HMRC contact can be found on GOV.UK. Customers can also forward suspicious emails claiming to be from HMRC to email@example.com and texts to 60599.
You and your constituents can access the National Cyber Security Centre’s guide on how to stay secure online and protect yourself and your business against cyber crime.
Many customers have benefitted from our webinars which offer information on the CJRS and SEISS, other government support and how it applies to them. Go to help and support if your business is affected by coronavirus to book online, or to view updated guidance. If a customer booked on a webinar but can no longer attend, they should cancel their place where possible to allow space for others to register.
Live webinars offering support on the fourth SEISS grant will be available from 15 April. In addition to the webinars for customers, we will also provide some dates for webinars tailored for agents, to support them in supporting their clients. Further information on booking will be available in due course.
There’s also list of monthly claims deadlines and a helpful step by step guide on GOV.UK, summarising the latest information on the CJRS and the steps employers need to take to make a claim.