Welcome to the December 2020 Newsletter from Beatons Group

On 5 November Chancellor Rishi Sunak announced an extension to the Coronavirus Job Retention Scheme (CJRS) which will run until the end of March 2021. The government intends to review the CJRS in January to 'examine whether the economic circumstances are improving enough for employers to be asked to increase contributions'.  

Meanwhile, HMRC confirmed that Making Tax Digital for Corporation Tax (MTD for CT) will not be introduced until 2026. HMRC has outlined plans for the initiative in a new consultation document.

Chancellor extends furlough scheme to end of March

Chancellor Rishi Sunak has extended the Coronavirus Job Retention Scheme (CJRS) until the end of March 2021.

The CJRS was supposed to have ended after being scaled back to cover 60% of salaries during October. However, on 31 October Prime Minister Boris Johnson announced a new national lockdown for England.

In a statement to the House of Commons, the Chancellor confirmed that the CJRS will pay up to 80% of an individual's wage, up to £2,500 per month. Mr Sunak stated that the government will review the scheme in January.

In regard to the Job Retention Bonus, which had been set to take effect from 15 February 2021, the government now considers that with the extension of the CJRS, the policy intent of the Bonus falls away. The government intends to redeploy a retention incentive at the appropriate time.

The Chancellor also announced more generous support for the self-employed. He confirmed that the next income support grant, which covers the period November to January, will be increased to 80% of average trading profits, up to £7,500.

Commenting on the matter, Mr Sunak said: 'We can announce . . . that the furlough scheme will not be extended for one month – it will be extended until the end of March. The government will continue to help pay people's wages, up to 80% of the normal amount.

'All employers will have to pay for hours not worked is the cost of employer national insurance contributions (NICs) and pension contributions.

'We'll review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.'

HMRC confirms MTD for corporation tax to be mandated from 2026

In a new consultation HMRC has confirmed that Making Tax Digital (MTD) for corporation tax (CT) (MTD for CT) will not be implemented until 2026 'at the earliest'.

The consultation considers how the principles created for MTD could be established for companies within the charge to CT. It outlines the potential design of the MTD for CT system and provides companies with information in regard to what may be required of them following the introduction of MTD for CT.

The consultation document states that the scope of MTD will include all companies resident in the UK, as well as the activities of non-resident companies in the UK and other corporates that, under UK domestic legislation and tax treaties, are subject to a UK CT charge.

HMRC is seeking feedback on the plans from companies and agents.

Commenting on the consultation, Tina Riches, Chair of the joint Association of Taxation Technicians (ATT) and Chartered Institute of Taxation (CIOT) Digitalisation and Agent Services Committee, said: 'We are disappointed that the consultation presupposes that most entities within the charge to CT should be within the scope of MTD before the costs and benefits arising to different parts of the population have been established.

'If a key purpose of MTD is to encourage taxpayers to become digital then it is not necessary to extend it to CT, as a large proportion of companies are VAT registered and so already in MTD for VAT, or using digital records anyway.'

The consultation runs from 12 November 2020 to 5 March 2021. The details can be found here.

ESSENTIAL TAX DATES FOR DECEMBER

1 December
New Advisory Fuel Rates (AFR) for company car users apply from today.

19 December
PAYE, Student loan and CIS deductions are due for the month to 5 December 2020.

30 December
Online filing deadline for submitting 2019/20 self assessment return if you require HMRC to collect any underpaid tax by making an adjustment to your 2021/22 tax code.

31 December
End of CT61 quarterly period.
Filing date for Company Tax Return Form CT600 for period ended 31 December 2019.

QUOTE OF THE MONTH

'As lockdown restrictions continued to be eased in August, we saw record numbers of customers choosing to make contactless payments using debit cards.'

Eric Leenders, Managing Director of Personal Finance at UK Finance, commenting on data published by the trade association which revealed that contactless payments reached a record level in August, accounting for 62% of all debit card transactions.

ON OUR WEBSITE

A wealth of resources for businesses
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Useful information for individuals
For a comprehensive bank of guides covering Venture Capital Trusts, the dividend nil-rate and much more, please visit the Your Money area of our website.

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Wealth gap widening as result of coronavirus pandemic, research suggests
Research carried out by think tank the Centre for Enterprise, Markets and Ethics (CEME) has suggested that the UK's wealth gap is widening as a result of the ongoing COVID-19 pandemic.
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Current CGT regime 'fit for purpose', says ICAEW
The Institute of Chartered Accountants in England and Wales (ICAEW) has stated that there is 'no need' to overhaul the current capital gains tax (CGT) regime.
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Government delays implementation of new pensions dashboards
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Support for self-employed increased as lending schemes extended
The government has increased the support available to self-employed workers and extended its emergency business loan schemes as a result of the second national lockdown in England.
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