This Weeks Tax Announcements 28/08

Keep up to date with the key announcements made this past week.

HMRC announce new payment for people self-isolating in highest risk areas

The Government has announced a new payment for people on low incomes in areas with high rates of COVID-19 who have been forced to self-isolate and can’t work from home.

The scheme is first set to be trialled from 1st September in Blackburn with Darwen, Pendle and Oldham. It will ensure that individuals who are eligible receive £130 for their 10 days of isolation. Other members of the household who have to self-isolate for 14 days will be entitled to a payment of £182.

Non-household contacts who are advised to self-isolate via the NHS track and trace system, will also be entitled to the payment of up to £182. The payment will be tailored to the individual’s length of isolation period.

To be eligible for the funding, individuals must:

  • have tested positive for COVID-19 or received a notification from NHS Test and Trace asking them to self-isolate;
  • have agreed to comply with the notification from NHS Test and Trace and provided contact details to the local authority;
  • be employed or self-employed:
    • employed people will be asked to show proof of employment.
    • self-employed will be required to show evidence of trading income and that their business delivers services which the local authority judges they are unable to carry out without social contact.
  • be unable to work from home (checks will be undertaken on all applicants) and will lose income a result;
  • be currently receiving Universal Credit or Working Tax Credit.

The payment will be provided within 48 hours of the necessary evidence being provided and will not reduce any other benefits that the individual receives.

First wave of CJRS compliance letters sent by HMRC

HMRC have issued the first wave of Coronavirus Job Retention Scheme (CJRS) compliance letters. This move comes as HMRC moves into its post transaction review phase.

The initial set of letters, which were due to arrive on doormats from 18th August, will be asking questions about the validity of any claims made. HMRC have stated that they will be focusing their efforts on fraudulent claims and not cases where the employer have made any errors innocently.

For a full breakdown of the announcement please see our article from earlier in the week.

Change to partial exemption VAT Treatment

HMRC have updated their policy paper on Revenue and customs brief 8 (2020): change to partial exemption VAT treatment, the update is to clarify HMRC’s position to confirm that where the amount of credit is less than the total value of the asset, then both the amount shown as value of the asset and value of the exempt credit will be reduced.

HMRC publishes new DAC 6 report

HMRC have published a new research report on DAC 6: disclosure of cross-border arrangements.

DAC 6 will require intermediaries to report certain detail of cross border tax arrangements to the tax authorities

The research paper sought to understand more about UK intermediaries involvements in cross-boarder tax arrangements the independent research focused specifically on deepening HMRC’s understanding of:

  • The profile of the UK intermediary population (for the purposes of this research: accountants / tax advisers; banks; lawyers and wealth managers) in the context of cross-border arrangements;
  • The possible impact of the new regulations on tax planning and avoidance related activity, particularly among High Net Worth Individuals (HNWIs) and Multinational corporates (MNCs); and
  •  The potential impact of the new regulations on the intermediary population and awareness of the new regulations.

As a result of HMRC’s recent announcement of the 6 month deferral of the first DAC6 mandatory disclosure deadline. The new deadline for the UK is now 28th February 2021 for all arrangements where the first step took place between 25th June 2018- 30th June 2020.

For arrangements where the first step is made from 1st July 2020-31st December 2020 the deadline is 30th January 2021.

HMRC Advisory Fuel Rates for company car users from September

HMRC have published revised advisory fuel rates for company cars, applying from 1 September 2020. The rates are to be used only where employers either reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel.

Advisory Fuel Rates from 1 September 2020

These rates apply from 1 September 2020. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine SizePetrol – amount per mileLPG – amount per mile
1400cc or less10 pence8 pence
1401cc to 2000cc12 pence9 pence
over 2000cc17 pence14 pence
Engine SizeDiesel – amount per mile
1600cc or less8 pence
1601cc to 2000cc10 pence
over 2000cc12 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Electricity Rate

The Advisory Electricity Rate for fully electric cars is 4 pence per mile.

Electricity is not a fuel for car fuel benefit purposes.