Ongoing change to the Coronavirus Job Retention Scheme ('furlough' scheme) and Self-employment Income Support Scheme (SEISS) creates the potential for inadvertent errors.
We outline recent changes here, but for full information on how the schemes work, see https://bit.ly/3c3v9Mn and https://bit.ly/2QoWa7G.
There are two further SEISS grants, SEISS 4 and 5. They are intended as a final, more restricted phase of support. For SEISS 4, businesses must declare a reasonable belief that there will be a significant reduction in trading profits due to reduced business activity, capacity, or demand because of Covid-19. The impact on the business must relate to the period 1 February 2021 to 30 April 2021, and the reduction in profits must be reflected in the figures reported on the relevant tax return in due course. Evidence must be kept to support claims, see https://bit.ly/2PSkbnr. SEISS 5 introduces an additional turnover test; the amount of grant will hinge on how much turnover has fallen between April 2020 and April 2021.
To be eligible for SEISS 4 or 5, the 2019/20 tax return must have been submitted before midnight on 2 March 2021. HMRC will base calculations on 2019/20 tax return data, and more recent years than for earlier SEISS grants. This could produce unexpected results. It opens the door to some new claimants, such as those starting self-employment in the 2019/20 tax year, provided they meet other eligibility conditions. On the other hand, someone eligible for earlier SEISS grants may receive more or less than before.
The furlough scheme runs to 30 September 2021. There is no change until 1 July 2021, when government contributions drop. Employers then make 10% contributions in July, and 20% in August and September. For periods starting on or after 1 May 2021, claims can be made for employees employed on 2 March 2021, if a PAYE RTI submission has been made to HMRC between 20 March 2020 and 2 March 2021, notifying payment of earnings for that employee. It's not necessary to have claimed under the scheme for an employee before 2 March 2021 to claim on/after 1 May 2021.
Covid-19 support schemes are very much in the public eye. HMRC stresses that it is not looking for innocent errors. But with details of employer furlough claims now published, new SEISS recovery powers, and a new Taxpayer Protection Taskforce set up to tackle fraud, it is important that any claim is well-evidenced and can stand HMRC scrutiny. Assessment of the position now would be prudent, and this guidance from the Chartered Institute of Taxation may make a good starting point to assess potential issues https://bit.ly/3fgUBkF. We should, of course, be glad to help you review compliance.