Whether an employee has fixed or variable pay is a key concept for calculating amounts that can be claimed under the Coronavirus Job Retention Scheme. The Tax Faculty explain that the classification of some employees is essentially the employer’s choice.
One of the areas highlighted was the issue of whether an employee receives fixed or variable pay.
Where an employee has fixed pay, the calculation of 80% of the employee’s usual wages is made using the wages paid in the last pay period ending on or before their reference date for the purposes of the CJRS.
If an employee receives variable pay, the calculation depends on when the employee became eligible for the CJRS, but generally involves averaging or a calendar look back.
Highlights from the broader tax news week ending 12 May, which includes resolution of CGT 2021/22 returns issue, a new HMRC service to allow firms to practice making customs declarations, details of new plastic packaging tax, and updates to VAT notices 700/22 and 700/46.
New service lets firms practice making customs declarations
HMRC has launched the Trader Dress Rehearsal (TDR) service that enables businesses to test making declarations ahead of using the Customs Declaration Service (CDS). The free system is available to traders using an authorised software product, a list of which is available from gov.uk. Users will also need an EORI number, have already obtained necessary authorisations and licences, know how to access the CDS and have an understanding of the UK trade Tariff and making customs declarations. Find out more.
This month’s top technical stories on ICAEW Insights include news on the fourth self-employed grant, new EU sustainability disclosure rules and how auditors can report on irregularities, including fraud.
Need to knowSEISS 4 claims open up: HMRC has contacted those potentially eligible for the fourth Self-employment Income Support Scheme grant. ICAEW’s Tax Faculty has updated its guidance and a webinar is available to all members.
Working from home tax relief continues, but new claims required: Employees working from home due to the coronavirus pandemic can continue to claim tax relief on costs not reimbursed by their employer, but a new claim will need to be made for the 2021/22 tax year, HMRC has confirmed.
HMRC has struggled to maintain business-as-usual service levels during the coronavirus pandemic and cannot improve services as envisaged in its Charter without more resource, warns ICAEW.
After gathering feedback from ICAEW members, the Tax Faculty has written to HMRC’s Charter Stakeholder Group outlining concerns about how HMRC performed against its Charter during 2020/21.
Published in November 2020, the Charter outlines what taxpayers can expect when interacting with HMRC. It includes standards of behaviour and values, such as getting things right, making things easy and being responsive.
In ICAEW Rep 43/21, ICAEW acknowledges that HMRC deserves commendation for its work in delivering COVID-19 financial support schemes, but concludes that this has come at the expense of its standard work with the day-to-day experience of taxpayers and agents continuing to deteriorate.
HMRC is sending out 2.5m annual renewal packs to tax credits claimants from this week. Taxpayers should check the details and report any change in circumstances to HMRC.
The packs will be sent out over the next six weeks and all claimants should receive theirs by 4 June. Many tax credits claimants will have been affected by the pandemic and may have earned less than in previous years. It is important taxpayers check that the details contained in their annual renewal pack are correct, including income details, ahead of the 31 July deadline.
To renew online, taxpayers can log into GOV.UK to check on the progress of their renewal. They can also use the HMRC app on their smartphone to renew their tax credits, check their tax credits payment schedule and find out how much they have earned for the year.