HM Revenue & Customs have released the June Edition of the Employer Bulletin. It contains all the latest HMRC updates to support employers and payroll agents navigating the ongoing Coronavirus pandemic.

The bulletin offers guidance for employers on how best to support their employees during this turbulent time. There is helpful information on matters such as late filing and payment penalties; tax treatment of reimbursed expenses for home office equipment; and more.

Coronavirus Job Retention Scheme

Guidance on changes to the Coronavirus Job Retention Scheme (CJRS) has now been made available. It contains helpful information on how the changes may impact you.

Before the changes come into effect from the 1st of July, it is advised that employers take the time to consider which of their employees will remain on full-time furlough and which employees will return to work and on what hours. You will need to come to an agreement with employees on these arrangements beforehand.

What employers need to do from July:

  • Start your flexible furloughing of employees from 1 July onwards. The hours and shift patterns employees work can be decided by you to suit the needs of your business. Employers will pay the wages for the time employees are in work and can apply for a job retention scheme grant to cover any of the usual hours the employee is still furloughed for. Employees can still be kept on full furlough if needed.
  • Claim for periods ending on or before 30 June, by 31 July – this is the last date employers can make those claims.
  • Claim for periods starting on or after 1 July (employers cannot claim for periods in July before this point).

Coronavirus (COVID-19) – Late filing and payment penalties

HMRC has revealed that tax payers can take the option to defer VAT payments between 30th of March to 30th of June and the July 2020 income tax self-assessment payment on account.

COVID-19 is now deemed as a ‘reasonable excuse’ for the late filing of returns or paying tax. The relevant penalties will be cancelled provided filing or payment occurred as soon as possible.

An additional 3 months have been added to the usual 30 days allowed to appeal or ask for a review.

If the lockdown and coronavirus situation is preventing you from paying taxes when they are due, a “time to pay” arrangement can be made. Arrangements will be judged on a case-by-case basis. A helpline has been set up for dealing with “time to pay” arrangements.

Coronavirus Statutory Sick Pay Rebate Scheme to launch

Businesses with fewer than 250 employees can now apply to HMRC to recover the costs of paying Coronavirus-related Statutory Sick Pay. Tax agents will also be able to make claims on behalf of employers.

New guidance for employers from the Pensions Regulator

If your staff are still working or are being furloughed as part of the Coronavirus Job Retention Scheme, your automatic enrolment and re-enrolment duties still apply as normal. You should also continue to pay the correct contributions.

New guidance added by the Pensions Regulator includes:

  • How to calculate contributions for part-time furloughed workers
  • Guidance for people having trouble paying pension contributions
  • Guidance on how the changes to the CJRS affect pension contributions
  • Technical guidance for larger employers and their advisers

There is also guidance for employers who offer staff defined benefit pension schemes. This includes information on working with the scheme’s trustees if you need to temporarily reduce scheme deficit repair contributions.

Also, the Annual Funding Statement offers guidance on how you should approach your next scheme valuation.

Coronavirus (COVID-19) – tax treatment of reimbursed expenses for home office equipment

No income tax or NICs liabilities will be due on reimbursed expenses for the purchase of home office equipment. This is thanks to a temporary new exemption. This will apply from 16th of March 2020 until 5th of April 2021.

Where you instruct/allow your employees to purchase their own office equipment for working at home, the exemption will apply to reimbursements of expenses to employees.

Taxable benefit charge – returning office equipment

Have you supplied office equipment to employees working from home without transfer of ownership? If so, you will find there is no tax charge when it is returned. If there was a transfer of ownership, there will be a benefit charge – minus any amount paid by the employee – on the market value of the equipment at the time of its transfer.

An employee who has purchased office equipment to work at home due to COVID-19, will own that equipment when reimbursed by their employer unless there was an agreement to transfer ownership. There is no benefit charge on the reimbursement. There’s also no benefit charge if the employee is allowed to keep the equipment.

Holiday Pay and Entitlement

The Department for Business, Energy and Industrial Strategy has issued an update. Emergency legislation has been passed which relaxes restrictions on carrying leave between leave years during the COVID-19 pandemic.

Commencing 26th of March, if it’s not been reasonably practicable for a worker to take some/all of 4 weeks holiday, the untaken amount can be carried forward into the following 2 leave years. This does not apply for those workers who are still able to take leave.

An example of where it may not be reasonable to take holiday:

  • Where the business has faced a significant increase in demand due to Coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures

Employees who have carried leave forward should be allowed to take holiday as soon as the situation becomes practicable. Workers carrying holiday into future leave years will still accrue holiday in the new leave year. They must also take their carried holiday before it expires at the end of the two leave years, as well as taking any holiday accrued in that time.

Short-Term Business Visitors Special Arrangements

This update applies only to employers who operated under the previous PAYE special arrangement (prior to the 2020-2021 tax year).

13th of July 2020 has been set as the deadline for employers to provide HMRC with their decision to apply/move onto the new Appendix 8 special arrangement or cease operating under any STBV special arrangement.

Employees on short-term business visits to the UK

Due to the Coronavirus pandemic, the deadline to return the end of year report for employees on short term business visits to the UK has been extended from 31st of May 2020 to 31st of July 2020.

Withdrawal of P45 and P60 bulk stationery

It has previously been announced that the facility for employers to order blank P45s and P60s is to be withdrawn. This will come into effect on 1st of August 2020. The changes will not affect Employers who are exempt from reporting their payroll online.

Online disguised remuneration Loan Charge form

If any of your current or former employees have outstanding disguised remuneration loans that are subject to the Loan Charge, 30th of September 2020 is the deadline for when they must report the details of their loans.  

The disguised remuneration loan charge form has now been updated so that an election can be made to spread outstanding disguised remuneration loan balances evenly across 3 years. The 3 tax years that loans will be spread across are 2018-2019, 2019-2020 and 2020-2021.

30th of September is the deadline to make an election to spread outstanding disguised remuneration loan balances.

The UK’s new immigration system

The UK will introduce a points-based immigration system when free movement within the EU ends on 1st of January 2021.

From 1st of January 2021, there will be new requirements for anyone coming to the UK to work. They must speak English and the job must be of the required skill and salary level. The job offer must also come from an approved employer sponsor. Employers will need to apply to become an approved sponsor. This usually takes 8 weeks to process.

Deferring Self-Assessment payments on account

You have the option to defer payment until January 2021 if you make Self-Assessment payments on account and are due to make a payment in July 2020.

If you’re experiencing financial difficulties due to the Coronavirus pandemic and have chosen to defer, there is no need to make the payment in July or take any other actions. HMRC will automatically treat it as a deferral if no payment is received. In order to prevent any accidental payments, remember to cancel any direct debit payments you have set-up

If it’s paid in full by 31st of January 2021, No interest or penalties will be charged on deferred payments.

If because of COVID-19 you are in financial difficulty, you have the option to pay the deferred amount as one payment between July and 31st of January 2021 or by instalments.