Benefits and Tax Credits Update
As part of a number of measures to support the country during the coronavirus pandemic, the basic element of Working Tax Credit has been increased by £1,045 to £3,040 from 6 April 2020 until 5 April 2021.
The government is also uprating Child Benefit, other tax credits rates and Guardian’s Allowance by 1.7%. You can read the full list of Rates and Allowances.
These increases came into effect on the 6 April, but individual payment dates will vary depending on circumstances.
You do not have to take any action – you will receive any increased payments automatically.
Tax Credit Renewal
HMRC will automatically renew all tax credits claims apart from those identified as high risk. These customers will receive an auto renewal pack and will only need to contact HMRC if their details differ from the pack.
Please be aware, if you are currently a tax credit claimant and you claim Universal Credit, your tax credit award will be closed from the day before your Universal Credit claim is made. Once you have made a Universal Credit claim it is not possible to revert back to tax credits.
Construction Industry Scheme (CIS)
Limited company subcontractors can off-set CIS deductions suffered against tax and National Insurance payments due for their employees, and CIS deductions from their subcontractors. This should be done monthly (or quarterly, as appropriate) and the calculation should be shown on the company’s monthly Employer Payment Summary (EPS) return. At the end of the tax year, when HMRC have received the final EPS and Full Payment Submission (FPS), any excess CIS deductions that cannot be set off may be refunded or set against any Corporation Tax or VAT due. Refunds cannot be processed until 24 April and it can take 40 working days for repayments to be made.
A repayment can be claimed online if the company has a Government Gateway user ID and password. If you do not have a user ID, you can create one when you claim online. If a repayment is to be made to an agent the claim must be made by post including a completed R38 form.
Landlords banned from using winding-up orders
The government has banned landlords from using winding-up orders against their retail tenants, after aggressive rent collection tactics which threaten the future of retail businesses came to light. A huge amount of businesses in both retail and hospitality have found themselves unable to keep up with their rent during the lockdown. The government said last week that it will implement some temporary rules that will void winding-up petitions and statutory demands already distributed by landlords during the crisis. Nor will they be allowed to use CRAR – commercial rent arrears recovery, unless the tenant is more than 90 days in arrears.