Keep up to date with the key announcements made this past week.
Charges for Payments Made to HMRC Using Debit Cards
From 1st November 2020, when payments are made to HMRC using business credit and debit cards a fee will be charged. Previously, a fee was only payable to HMRC in relation to payments with business credit cards.
Alternative payment methods still remain and incur no fees, these include; direct debits, faster payments, CHAPS (clearing house automated payment system) & BACS (bankers automated clearing system) payments.
Further announcements and updates have been made this week in connection with the Governments ongoing support for individuals and businesses during the coronavirus pandemic:
HMRC has updated its guidance on the Coronavirus Job Retention Scheme (CJRS), to provide more information on what to do when an error has been made in claiming furlough payments. This includes a link to newly published guidance which can be found here.
Where claims include employees with either a temporary or no National Insurance number, employers should contact HMRC using the COVID-19 Helpline on 0800 024 1222.
VAT Claims Submitted Outside Four-year Window
Following new case law developments, HMRC have published updated guidance on their views on the evidence required when submitting claims outside of the ‘four-year cap’ for VAT claims (such as Fleming claims).
Notably, HMRC suggests that ‘each claim must be considered on its individual merits’, but a claim may be rejected where:
- witness evidence is based on general industry practice, rather than the specific supplies made by the claimant
- it is not agreed that input tax has ever been incurred, or if input tax was incurred, the extent to which it has already been recovered is unclear
HMRC is also clear that a lack of detailed records does not mean there is a lower standard of proof. It appears HMRC will not accept claims that cite NHS Lothian as support for the position that the EU principle of effectiveness means that claims cannot be rejected because of a lack of evidence.
Tribunal Procedures: Temporary Coronavirus Changes
A temporary provision has been introduced to insure that recordings of remote First-tier and Upper Tribunal hearings can be accessed in line with the directions of the relevant Tribunal.
The two areas of amendments being made are: the addition of a temporary provisions for access to recordings of remote hearings, and amendments to the provisions on the exercise of judicial functions by staff.
The new rules will come into effect on 22nd July 2020 and are currently planned to remain in force until 26th March 2022.
Finance Bill 2020 Clarity on EMI Disqualifying Events
The Government are proposing an additional clause, for inclusion in Finance Bill 2020, to ensure that a disqualifying event will not occur on an individual in relation to Enterprise Management Incentives. Under current legislation a disqualifying event may transpire as a result of the individual taking leave, being furloughed or working reduced hours due to the Coronavirus (COVID-19).
Enterprise Management Incentives (EMI) require a commitment of working time requirements that must be satisfied by employees for them to qualify for EMI share options. This time commitment stands, once the EMI share options have been granted, requires a statutory minimum of hours for the business each tax year. If these conditions are not met, there will be a disqualifying effect for the EMI which could result in unintended income tax and national insurance consequences.
Where employees have been furloughed, it is possible for that individuals have not met the minimum working hours and therefore a risk that the EMI reliefs are lost. This new legislation will seek to rectify this. An introduction of a time-limited exception to the disqualifying event rules, such that participants are not forced to exercise their options much earlier than planned.
Individuals with share options granted prior to 19th March 2020 will be given a reprieve if they would have fulfilled the scheme requirements under normal circumstances, but did not do so for reasons connected to the Coronavirus pandemic. The hours individuals would normally have spent working for the business will count towards their qualifying time.
DAC 6 Implementation: HMRC Publishes Long-Awaited Guidance on Disclosable Arrangements Rules
EU Directive 2018/822 commonly known as DAC 6 was originally intended to take effect from 1st July 2020, this has since been deferred 6 months due to covid-19. This directive will introduce new obligations on taxpayers and their advisers to report details of certain cross-border arrangements to HMRC. The information received will be shared with other tax authorities implementing equivalent rules.
Guidance has been published by HMRC on the application of DAC 6 in the UK. The guidance includes; what arrangements are reportable, who has an obligation to report, reporting requirements and triggers for those within the scope of the regime & hallmarks of disclosable arrangements.
Source – Lexis Nexis via Tolley Guidance