Claim SEISS 4 grants by 1 June

Applications for the fourth Self-employment Income Support Scheme (SEISS) grant close on Tuesday 1 June, just after the bank holiday weekend. Agents may wish to remind clients of this deadline. Claimants should be aware of the risk of scams targeting those claiming grants; an image of one email scam is available on gov.uk. See more ICAEW guidance on SEISS.

Loss carry-back claims can’t be made until July

HMRC has confirmed that loss carry-back claims, as announced at Budget 2021, cannot be processed until after the Finance Bill 2021 receives Royal Assent. In Agent Update 84, HMRC estimates that this won’t be until mid-July and confirms that any claims made before the Bill is passed will not be processed and claimants will be asked to resubmit their claims. Find out more.

No returns for trustees reliant on small savings income until at least 2023/24

Trustees or personal representatives where a trust or estate’s only source of income is savings interest and the tax liability is below £100, have not needed to submit returns or make payments under informal arrangement set up in 2016. The interim agreement was extended previously and HMRC has confirmed in its latest Trust and Estates newsletter that the arrangement will remain in place for the 2021/22 and 2022/23 tax years.

Calculating statutory payments for OPW-deemed employees using payroll software

HMRC has published additional guidance on how personal service companies (PSCs) should calculate statutory payments for off-payroll working (OPW) engagements using payroll software.  It expands on HMRC’s existing guidance in ESM10033A (Employment Status Manual OPW statutory payments) and Q22 in TAXguide 07/21 Practical Q+As on off-payroll working.

The guidance includes three examples outlining the different ways in which payroll software might cope with the calculation. Tax- and NIC-free salary payments by a PSC to a director/employee, which are greater than the NIC lower earnings level and arise from OPW-deemed employment income which was subject to NIC when paid to the PSC, should be used as the starting point when calculating statutory payments. These should be added to payments of actual salary in the same period.

Coding error for service attributable pensions

ICAEW’s Tax Faculty has been alerted by a member that HMRC issued incorrect PAYE codes for some service attributable pensions (SAP) in 2020/21 and 2021/22. Such pensions are tax free as they are awarded to those that have been medically discharged because of a condition or injury that was caused by or exacerbated by, life in the service. However, in some cases, ex-service personnel are being issued with BR codes in respect of these pensions.

In addition to checking PAYE coding notices for 2021/22, agents and ex-service personnel in receipt of SAP should check 2020/21 P60s to confirm that the code was NT. If the code was something other than NT, they should call HMRC’s Income Tax Helpline on 0300 200 3300.

Latest advisory fuel rates published

HMRC has published the second quarterly advisory fuel rates for 2021. The rates are used by organisations in calculating reimbursements for fuel costs and business travel in company cars. From 1 June rates for petrol and LPG engines have been increased across the board. All rates have increased by 1 penny with the exception of LPG engines over 2000cc which has increased to 14p up from 12p, the rate since September 2020. Diesel rates have remained frozen for engines less than 2000cc, and increased by a penny to 13p for engines over 2000cc. Employers can use previous rates for up to one month after the date the new rates apply.

HMRC Agent Update goes monthly

HMRC has started issuing its Agent Update monthly. The increase in frequency was prompted by “customer demand” says HMRC, which issued its first monthly update on 19 May (Issue 84). Previously the enewsletter was published bi-monthly.