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Tax news in brief

Highlights from the broader tax news week ending 27 January, which includes: Treasury confirms that eligibility criteria for fourth SEISS grant will be announced at the Spring Budget; special edition of HMRC's Employers Bulletin focuses on Brexit transition and HMRC updates its guidance on scams.

Eligibility criteria for next SEISS grant to be in Budget

HM Treasury has confirmed that information about the amount of, and eligibility criteria for, the fourth Self-employment Income Support (SEISS) grant will be provided at the Spring Budget on 3 March 2020. The fourth SEISS grant covers February to April 2020. It is not clear how soon after the Budget HMRC will be able to open applications for the fourth grant, or whether this delay will mean that information from 2019/20 returns will be taken into account when calculating the grants.

HMRC updates information on scams, including COVID examples

On 22 January HMRC updated its guidance on phishing emails, phonecalls, texts and social media messages from scammers purporting to be HMRC or companies that can secure a tax rebate or refund. The guidance also includes information on and examples of bold new scams that are using the coronavirus pandemic to encourage people to click on links. See the updated guidance.

Brexit focus for new look HMRC Employer Bulletin

HMRC published a special edition of its update for employers on 22 January, providing guidance on the new rules imposed at the end of the Brexit transition period covering: trading with Europe, business travel and social security coordination. It also includes information on new requirements on cash declarations.

The January Employer Bulletin was not only a departure from the normal bi-monthly schedule, but also marked a change in the format of the bulletin. It is now only available as an HMTL page and not as a PDF download. HMRC would welcome feedback on the change, which has been made to improve accessibility.

Changes to the VAT treatment of early termination fees will not be applied retrospectively

In September HMRC issued Revenue and Customs Brief 12 (2020) providing an update on the VAT treatment of compensation and similar early termination payments following judgments of the Court of Justice of the European Union. On 25 January 2021 HMRC announced that it would be applying the updated VAT treatment “from a future date”, addressing concerns that the original brief took effect retrospectively. The move means that historic adjustments for following previous guidance are no longer applicable. HMRC has confirmed that revised guidance will be issued “shortly”.