Highlights from the broader tax news week ending 10 February, which includes: reminders about SEISS grants being trading income and CJRS claims for January, as well as highlighting an issue with the HMRC CJRS calculator. Other stories include confirmation of income tax personal allowance and van and fuel benefits, links to the Office of Tax Simplification online survey on use of third-party data and confirmation that EU member states are to adopt detached worker rules.

CJRS claims for January and issue with HMRC calculator

The deadline for making claims for the month of January is Monday 15 February. For those who used HMRC’s calculator to work out January claims for employees that are not on a fixed salary, HMRC has flagged that the CJRS calculator on gov.uk contained a software error, which it has now corrected.

If HMRC’s calculator was used before 21 January to work out January claims for employees that are not on a fixed salary, claims should be recalculated where:

• an employee’s pay for January 2019 was used as reference pay, instead of 2020, and
• their pay was different in January 2019 to January 2020.

Reminder that SEISS grants are trading income

Irrespective of the accounting treatment, grants under the self-employment income support scheme (SEISS) are taxable in the 2020/21 tax year (Finance Act 2020 Sch16(3)(3)). It therefore follows that the grants should be included as income when considering whether to reduce payments on account for 2020/21. There has been speculation that the fourth SEISS grant might be taxable in 2021/22, but that would require a change to the primary legislation.

Finance Act 2020 also ensures that SEISS grants are treated as trading income when calculating trading profits or losses. There will be separate boxes in the self-employment and partnership sections of the 2020/21 self assessment tax return for reporting the grants. It follows that SEISS grants are trading income for pension contribution purposes.   

All EU member states to adopt detached worker rules

HMRC has confirmed that all EU member states want to opt-in to apply the detached worker rules for mobile workers. This means that workers moving temporarily between the UK and the EU will pay social security contributions in their home state and receive necessary healthcare treatment in the country where they are posted. Find out more.

2021/22 income tax personal allowances confirmed

Legislation has been published confirming the income tax personal allowance for 2021/22 as £12,570 and the basic rate limit as £37,700. A draft statutory instrument was also laid in January indicating that the national insurance class 2 rate will remain unchanged, but that the small profits threshold will increase from £6,475 to £6,515 in 2021/22. The class 3 rate is set to increase from £15.30 a week to £15.40 a week. Read Tax Faculty’s updated article, which includes links to legislation

Van and fuel benefits to increase in line with CPI

In a written statement to parliament, the Exchequer Secretary to the Treasury has confirmed that the van benefit charge and fuel benefit charges for cars and vans will be uprated in line with the Consumer Price Index from 6 April 2021. The van benefit charge will increase from £3,490 to £3,500, while the van fuel benefit charge will increase from £666 to £669. The car fuel benefit charge multiplier will increase from £24,500 to £24,600. Legislation to implement the changes will be laid before parliament on 9 March 2021.

Smarter use of third-party data

Following the launch of its call for evidence on third party data reporting, the Office of Tax Simplification has launched an online survey to enable interested parties to feedback directly. The online survey closes on 9 April.

Deadline for applications to defer class 1 NIC

Employees with more than one job can defer paying class 1 national insurance if certain conditions are met. The deadline for applying for deferment in the 2020/21 tax year is 14 February 2021. Applications made after that date and before the end of the tax year will only be considered by HMRC if the application is made with the agreement of the deferred employer(s).