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Tax Diary December 2020/January 2021

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19 December 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2020.

19 December 2020 – CIS tax deducted for the month ended 5 December 2020 is payable by today.

30 December 2020 – Deadline for filing 2019-20 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2021-22.

1 January 2021 – Due date for Corporation Tax due for the year ended 31 March 2020.

19 January 2021 – PAYE and NIC deductions due for month ended 5 January 2021. (If you pay your tax electronically the due date is 22 January 2021)

19 January 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2021.

19 January 2021 – CIS tax deducted for the month ended 5 January 2021 is payable by today.

31 January 2021 – Last day to file 2019-20 self-assessment tax returns online.

31 January 2021 – Balance of self-assessment tax owing for 2019-20 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2020-21.

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Reasonable excuses for making a late furlough claim

HMRC’s guidance on making claims through the Coronavirus Job Retention Scheme was updated on 19 November 2020. The updated guidance now includes various examples of what is meant by a ‘reasonable excuse’ for employers that submit furlough claims after the stated deadline. Claims for the periods from 1 July 2020 to 31 October 2020 must be submitted no later than 30 November 2020.

From 1 November 2020, claims must be submitted by 11.59pm 14 calendar days after the end of the previous calendar month. If a claim deadline falls on the weekend or a bank holiday then claims should be submitted on the next working day. For example, the claim deadline for furlough days during November must be submitted by 14 December 2020.

HMRC may accept a claim made after the deadline if you had a reasonable excuse for failing to make a claim in time.

HMRC’s list of example excuses is as follows:

– your partner or another close relative died shortly before the claim deadline ;
– you had an unexpected stay in hospital that prevented you from dealing with your claim ;
– you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you) ;
– a period of self-isolation prevented you from making your claim (and no one else could make the claim for you) ;
– your computer or software failed just before or while you were preparing your online claim ;
– service issues with HMRC online services prevented you from making your claim ;
– a fire, flood or theft prevented you from making your claim
postal delays that you could not have predicted prevented you from making your claim ;
– delays related to a disability you have prevented you from making your claim a HMRC error prevented you from making your claim .
Please do not hesitate to call if you need any assistance with your furlough-related obligations.

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Businesses within the scope of VAT in the UK

The VAT system is policed by HMRC who can and do levy penalties for breaches of the legislation.

There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT.

These conditions are that the activity:

– Is a supply of goods or services ;
– That the supply takes place in the UK ;
– Is made by a taxable person ;
– Is made in the course or furtherance of any business carried on or to be carried on by that person ;
The fourth point above is a condition that needs to be carefully considered when deciding whether an activity is within the scope of VAT. This concept of ‘business’ is one of the less well-known rules. However, this is an important condition that drives the decision should a business charge VAT on their sales, known as output VAT and on its ability to recover VAT, known as input tax.

The VAT concept of business is currently taken to be the same as the concept of ‘economic activity’ set out in European legislation. Therefore, if an activity falls within EU definition of economic activity it must be business in the UK. Both of these definitions are wide and, in some cases, have needed to be interpreted by the courts.

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Immigration Act receives Royal Assent

The Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 received Royal Assent on 11 November 2020. This is the legislation which will end the free movement of persons under retained EU law in the UK at 11pm on 31 December 2020. It will also repeal other retained EU law relating to immigration.
A new points-based immigration system will apply to EU (including EEA and Swiss) citizens arriving in the UK from 1 January 2021 onwards and these workers will need to apply for a work visa in advance. They will be awarded points for a job offer at the appropriate skill level, if they speak English, and for meeting the appropriate salary threshold. Visas will be awarded to those who gain enough points. However, Irish citizens will continue to be able to enter and live in the UK as they do now.

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Do you need a customs agent?

If your business acquires goods or sells goods to the EU, and you have no import/export trade with non-EU countries you probably have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any duties or VAT payable.

Affected businesses will need to abide by the new regulatory situation from 1 January 2021. Only a matter of weeks from now. They will need to employ someone or appoint a customs agency to undertake the necessary chores.

For most businesses, the latter option may be preferred. The Government has anticipated this need and there is a list of UK customs agents published on the GOV.UK website.

If you transport goods on behalf of EU or UK businesses, back and forth across the English Channel, the regulations your drivers will need to comply with from 1 January 2021 are significant.

Government has again stepped up and provided detailed guidance. You can Google and download a PDF copy of their Transporting goods between the UK and EU in a no-deal Brexit: guidance for hauliers on the GOV.UK website.

The outcome of current trade talks with the EU is still uncertain. However, whatever the outcome of these talks, UK firms involved in the acquisition and/or transport of goods to and from the EU will need to abide by the new regulations imposed as a result of our exit from the European Union.

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HM Treasury instructions re CJRS

An updated Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the extended Coronavirus Job Retention Scheme (CJRS) was published on 12 November 2020. The CJRS was due to come to an end on 31 October 2020 but has now been extended until 31 March 2021.

Effective 1 November 2020, employees will receive up to 80% of their salary for hours not worked. Any government contribution will be capped at £2,500 per month per employee. There will be a review date of the scheme in January 2021 which may see employers taking on an increased financial contribution from 1 February 2021, if the economic and health outlook show signs of improvement. A further Treasury Direction is expected to be published confirming any changes to the rules in early 2021.

There are a number of important changes to the way the revised scheme works that started to come into effect from 1 November 2020. This includes the following:

From 1 December 2020, HMRC will publish information listing employers who have used the scheme. This will include indicative details of the amount of money claimed (but not the exact amount). This information must be removed by HMRC 12 months after the date it was first published. An exception may be made where publication of this information could result in serious risk of violence or intimidation.
During November 2020, employers will be able to claim for employees who are serving a notice period. However, no CJRS claim can be made in respect of an employee that is serving notice between 1 December 2020 and 31 January 2021.
A furlough agreement needs to be in place before the start of the relevant claim period but can be subsequently varied. There was an opportunity to backdate agreements for the period from 1 to 13 November 2020.

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Those who shout loudest

Many of the business disruption grants that have become available in the last few weeks are being distributed by local authorities. They include support for:

– Businesses obliged to close due to local or national lockdown and
-Businesses that have been severely affected by local or national restrictions but are still trading.
Central government is funding these grants but responsibility for distributing the grants rests with local authorities in England. The regions are also receiving additional funds from central government which again will be distributed locally.

In all cases, business owners should be aware that:

– Local Authorities (LA) have the freedom to determine the precise eligibility criteria for these grants.
– Government does expect that funding will be targeted at: hospitality, bed and breakfast and leisure businesses.
LAs will also be expected to use their local knowledge when selecting recipients for grant funding.

If your business is affected, and if you have received no funding or clarification if you are eligible for funding, you may be advised to call your LA asap.

It is entirely possible that affected businesses will fall through any filtering process. In which case, lifting your hand to request a slice of available funding may be a wise move.

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Bounce Back loans still available

The Bounce Back Loans scheme was launched in May 2020 to provide financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 pandemic. The scheme allows small businesses to borrow between £2,000 and £50,000 and access the cash in most cases within 24 hours of approval.

The scheme was launched for an initial period of 6 months but has now been extended (together with all the government-backed loan schemes) until 31 January 2021. The loans come with a 100% government guarantee and businesses can apply for a loan of up to 25% of their turnover. The government will also pay the interest on these loans for the first 12 months and no repayments will be due during this time. After 12 months the interest rate will be 2.5% a year.

It is also now possible for businesses to ‘top up’ existing Bounce Back Loans should they need additional funding. This applies to businesses who borrowed less than their maximum loan allowance. Businesses will be required to fill out a separate application form, reaffirming the declarations made in the original application form and will only be able to make one top-up application.

The scheme is available through a network of 28 British Business Bank accredited lenders including the five largest banks. Banks will not perform any forward-looking test of business viability or other complex eligibility criteria for these loans. Businesses can instead apply for a loan online using a short and simple online form.

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Further support for mortgage borrowers

The Financial Conduct Authority (FCA) has announced new proposals to ensure that lenders provide tailored support to mortgage borrowers who continue to face payment difficulties due to the COVID-19 crisis. This follows the additional government measures announced over recent weeks to control the spread of coronavirus.

Payment holidays to support mortgage borrowers who are experiencing payment difficulties because of coronavirus will be extended. These measures were due to come to an end on 31 October 2020.

This means that:

– those who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total ;
– those who currently have an initial payment deferral, will be eligible for another payment deferral of up to 3 months ;
– those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months ;


Under the FCA’s proposals, borrowers would have until 31 January 2021 to request a payment deferral. A payment deferral under these proposals would not be reported as missed payments on a borrower’s credit file.

The FCA is also proposing that no one will have their home repossessed without their agreement until after 31 January 2021.

Some borrowers would not be eligible for a payment deferral because they may already have had 2 payment deferrals (of up to 6 months in total), and tailored support will be more appropriate to their circumstances. Tailored support may be reported on a borrower’s credit file, and lenders should inform borrowers where this will be the case.

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Protection for landlords and tenants

The government guidance for landlords and tenants as a result of the coronavirus pandemic has been updated. The Coronavirus Act 2020 provides protection to social and private tenants by delaying when landlords can start proceedings to evict tenants.

To give tenants greater protection from eviction, landlords are required to provide tenants with 6 months’ notice period before they can start possession proceedings. This applies except in cases raising other serious issues such as those involving anti-social behaviour, domestic abuse, false statement and where a tenant has accrued rent arrears in excess of 6 months’ rent.

The stay on possession proceedings expired on 20 September 2020 and landlords can now progress their possession claim through the courts. The most egregious cases will be prioritised by the courts ensuring landlords are able to progress the most serious cases.

To protect against coronavirus transmission, bailiffs have been asked not to enforce evictions during the national restrictions in England except in the most serious circumstances. Together with pause on enforcement of evictions starting in December that has been agreed with bailiffs, this means that evictions in England will not be enforced until 11 January at the earliest, except in the most serious circumstances.

Landlords can continue to carry out repairs and safety inspections during the English lockdown period provided this is done in line with public health advice.

The guidance is clear that tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. Tenants who are unable to do so should speak to their landlord at the earliest opportunity.

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