Weekly tax highlights ― 16 August 2021

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly tax highlights ― 16 August 2021
  • Coronavirus (COVID-19)
  • Reporting coronavirus grants and support payments
  • Direct taxes
  • Reporting expenses and benefits through payroll
  • Employer Bulletin: August 2021
  • Indirect taxes
  • Updated HMRC guidance: plastic packaging tax
  • Consultations
  • Law Society response: simplifying the VAT land exemption response
  • More...

Weekly tax highlights ― 16 August 2021

Coronavirus (COVID-19)

Reporting coronavirus grants and support payments

HMRC has published new guidance on reporting of coronavirus grants and support payments on tax returns. The guidance is for the self-employed or partners in a business.

Grants and payments received by self-employed individuals, partnerships or businesses from the following coronavirus support schemes must be reported on the tax returns:

  1. the self-employment income support scheme (SEISS)

  2. test and trace or self-isolation payments

  3. the coronavirus job retention scheme (CJRS)

  4. Eat Out to Help Out

  5. coronavirus statutory sick pay rebate

  6. coronavirus business support grants (made by either local authorities or devolved administrations)

However, neither welfare payments made by a council to an individual to help with council tax payments nor housing benefit are required to be reported on a self assessment tax return.

Loans such as bounce back loans or those from the coronavirus business interruption loan scheme (CBILS) are not coronavirus support payments.

Direct taxes

Reporting expenses and benefits through payroll

HMRC has updated the employee notification section in its guidance on payrolling employee benefits and expenses.

The ‘Tell your Employees’ section has been revised to clarify actions employers must take when they register to payroll benefits. Employers must give their employees written notification by payslip, email or letter, explaining that they are payrolling benefits and expenses, and setting out what this means for employees.

Employers must send the notification by 1 June after the end of each tax year. The notification must tell their employees that they will not be taxed twice because the employer has registered to payroll their benefits with HMRC before the start of the new tax year. Employers should include the following information:

  1. details of the benefits they have payrolled in the tax year, for example car fuel ― this can include what the benefits are, the cash equivalent and which ones have been subject to PAYE tax

  2. the amount they have payrolled for optional remuneration (OpRA)

  3. details of benefits they have not payrol

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