HMRC – Budget 2021

Dear customer,

As part of the Budget, the UK Government has announced further support for employers and the self-employed.

  1. Extension to the Coronavirus Job Retention Scheme
  2. Self-Employment Income Support Scheme – future grants confirmed
  3. VAT deferral
  4. Where can I get further support?
  5. Protect yourself from scams

Extension to the Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021.

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 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. This means, for periods between July and September, employers 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 also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

CJRS eligibility from May

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

Your clients do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.

For more information on the extension to the scheme and the support available, search ‘Job Retention Scheme’ on GOV.UK.

February CJRS claims

You and your clients can now submit claims for periods in February. These must be made by Monday‌‌‌‌ ‌15‌‌ ‌March.

Employers can claim before, during or after they process their payroll. If they can, it’s best to make a claim once they’re sure of the exact number of hours their employees worked so they don’t have to amend their claim later.

Check if your client and their employees are eligible and work out how much they can claim using our CJRS calculator and examples, by searching ‘Job Retention Scheme’ on GOV.UK.

What you need to do now

  1. If you haven’t submitted your client’s claim for January but believe that you have a reasonable excuse for missing the deadline of 15 February, check if you can make a late claim by searching ‘claim for wages’ on GOV.UK.
  2. Submit any claims for February no later than Monday‌‌‌‌ ‌15‌‌ March.
  3. Keep records that support the amount of CJRS grants you claim, in case HMRC need to check them.

Self-Employment Income Support Scheme – future grants confirmed

The UK Government has today announced that the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.

The fourth and fifth grants will take into account submitted 2019-20 tax returns. This means your clients may be able to claim, even if they were not eligible for previous grants. Your clients must have submitted their 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.

Fourth SEISS grant

The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your client’s trading profits for up to four tax years between 2016 to 2020, where available.

The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.

Eligibility for the fourth SEISS grant will also depend on whether your client experienced a significant financial impact from coronavirus between February 2021 and April 2021.

As the calculation now takes into account the tax year 2019-20, your clients who previously claimed SEISS grants may receive grants that are higher or lower in value than any previous SEISS payments they received.

We have moved quickly to ensure we have the information we need to check customers’ eligibility before applications are open, while also protecting the SEISS from fraud. Where we need to make further checks, we will write to customers and explain that we will call them to ask for proof of identity and evidence of trade. To make these calls, we will use the telephone number on the customer’s record. If this is their agent’s number, we will ask that you provide us with your client’s contact number as we need to speak to them directly. Thank you for supporting your clients with this process, which will help make sure we can get support to people who need it.

Further details of the scheme can be found by searching ‘Self Employed Income Support Scheme’ on GOV.UK.

How your clients can claim the fourth SEISS grant

From mid-April, your clients will be given their personal claim date by HMRC which confirms the earliest date they can claim. We are inviting customers to claim on different days to ensure the system is fast and easy to use.

The online claims service for the fourth grant will be live from late April. This is to allow us time to process recently submitted 2019-20 Self Assessment tax returns.

Your clients must make their claim for the fourth grant between their personal claim date and 31‌‌ ‌May 2021 at the latest.

Your clients will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or their inability to trade, and to keep appropriate records as evidence.

Fifth grant

The UK Government has also announced that there will be a fifth and final SEISS grant covering May to September. The amount of the fifth grant will be determined by how much your clients’ turnover has been reduced.

The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits.

Your clients will be able to claim the fifth grant from late July if they are eligible. Further details will be provided on the fifth grant in due course.

Questions and answers on SEISS:

When will further guidance be available?

We will publish more guidance in due course.

How will customers receive their personal claim date?

We will contact your clients from mid-April by email, letter or SMS, depending on the information they have provided to us previously.

What can customers do to prepare?

We will send details of how to make a claim when we contact customers with their personal claim date.

In the meantime, to confirm eligibility and make a claim, customers should ensure they have the following to hand:

  • National Insurance number
  • Self Assessment Unique Taxpayer Reference (UTR)
  • Government Gateway user ID and password
  • bank account number and sort code.

Customers claiming SEISS for the first time may be asked additional questions to prove their identity. These customers should be ready to answer questions about the following documents, which we recommend they have to hand:

  • UK passport
  • credit file (such as loans, credit cards or mortgages)
  • Self Assessment tax return (within the last 3 years)
  • driving licence (DVLA UK or DVA NI)
  • tax credit claim
  • P60
  • three most recent payslips.

During the first two weeks of a grant opening for claims, we receive many calls to our helplines from customers who cannot access the Government Gateway or have issues verifying their identity. We would be grateful if you could support your clients in preparing the above documents so they’re ready to claim.

What support is there for those who are not eligible?

Those who are not eligible for SEISS may be eligible for other elements of the financial support provided by the UK Government. This includes Bounce Back Loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.

More information on further support can be found by searching on GOV.UK.


VAT deferral

If your client deferred VAT payments due between 20‌‌ ‌March and 30 June 2020 and still have payments to make, they should pay by 31‌‌ ‌March if they can.

If they cannot afford to pay by 31‌‌ ‌March this year, they can now join the online VAT deferral new payment scheme to spread the payment.

The new scheme lets customers pay their deferred VAT in equal monthly instalments, interest free. They can spread payment across a number of months, depending when they join – the earlier they join, the more months they have to spread the payments across:

  • 11 instalments if they join by 19‌‌ ‌March
  • 10 instalments if they join by 21‌‌ ‌April
  • 9 instalments if they join by 19‌‌ ‌May
  • 8 instalments if they join by 21‌‌ ‌June.

Your client can join the scheme quickly and simply online, without the need to call HMRC. To find out more information, including the things customers need to do before joining, go to GOV.UKand search ‘VAT deferred’.

The online service will close on 21‌‌ ‌June 2021 – if your client wants to join the scheme online, they must do so before this date.

If your client is on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, they’ll be able to join the new payment scheme later in March. We will share more information on this shortly.

If your client has a Time to Pay arrangement already in place for their deferred VAT, they cannot use the online scheme. If they want to amend their Time to Pay arrangement, they should contact HMRC to do this.


Where can I get further support?

Many agents have benefitted from our webinars which offer information on the CJRS and SEISS, other support and how it applies to your clients. To book online, or to view updated guidance, go to GOV.UK and search ‘help and support if your business is affected by coronavirus’. If you’re booked on a webinar but can no longer attend, please cancel your place where possible to allow space for others to register.

Our phone lines and webchat remain very busy, so the quickest way to find the support you need is on GOV.UK. This will leave our phone lines and webchat service open for those who need them most.


Protect yourself from scams

As part of the Budget, the Chancellor today announced a Taxpayer Protection Taskforce to tackle the minority who deliberately claim money they’re not entitled to. If you suspect fraud, please report it using our online form. Go to GOV.UK and search ‘Report fraud to HMRC’ for more information.

Stay vigilant about scams, which may mimic government messages as a way of appearing authentic. Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact. You can forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

Access the National Cyber Security Centre’s guide on how to stay secure online and protect yourself and your business against cyber crime by searching ‘Cyber Aware’ on GOV.UK.

I hope this information helps you and your clients, and we’ll continue to keep you updated.

Yours sincerely

Jim Harra, Chief Executive and First Permanent Secretary – HMRC

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