HMRC has released the latest bi-monthly issue of the 'Agent Update' publication which includes summaries of recent changes and updates that have been announced. The document, that is aimed at taxation and accountancy practitioners, includes links to more detailed information on each of the topics covered. 

The topics covered in the latest edition include the following:

• COVID-19. A reminder that the GOV.UK portal includes details of all the various financial support and other measures available to employers, businesses and employees.
• VAT payment deferrals period. The option to defer your VAT payments ended on 30 June 2020. The Coronavirus VAT payment holiday gave businesses the chance to defer the payment of any VAT liabilities between 20 March 2020 and 30 June 2020. VAT payments now need to be made as normal. 
• Confirmation of Payee process. Some UK banks have introduced Confirmation of Payee (COP) as a new way of giving individuals or businesses greater assurance that they are sending payments to the intended recipient. When you request a repayment from HMRC you must ensure that the details you provide match the details of the recipients account.
• Top Slicing Relief (TSR) on life insurance policy gains. New legislation has been introduced that changes how reduced personal allowances interact with the calculation for top slicing relief. It will provide additional relief for taxpayers whose entitlement to the personal allowance has reduced because a gain is included as part of their income. The new legislation to TSR cases will apply from tax year 2018-2019.
• Disguised Remuneration Loan Charge. Taxpayers that have outstanding disguised remuneration loans that are subject to the loan charge need to file their 2018-19 Self-Assessment tax return by 30 September 2020, including a report of any loan balances subject to the loan charge, and put in place any arrangements they need to pay the charge due on that date. Taxpayers can now elect to spread the loan balance over 3 tax years.
• Links to new Revenue & Customs Briefs.

One of the measures announced by the Chancellor, Rishi Sunak in his Summer Economic update on 8 July 2020 was the launch of the new £2 billion Green Homes Grant scheme.

From September 2020, home owners and landlords in England will be able to apply for a grant to make their home more energy efficient. The Green Homes Grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000. The scheme will run until 31 March 2021.

The Green Homes Grants will give homeowners, including owner occupiers and social/private landlords, vouchers to install one or more of the following primary measures:

• solid wall, under-floor, cavity wall or roof insulation
• air source or ground source heat pump
• solar thermal

In addition, households can apply for a further voucher to install secondary measures for additional energy saving. Households will need to install at least one of the primary measures above to qualify for further funding for secondary measures. These secondary measures include the following:

• double or triple glazing/secondary glazing, when replacing single glazing
• upgrading to energy efficient doors
• hot water tank/appliance tank thermostats/heating controls

Secondary measures can only be subsidised up to the amount of subsidy provided for primary measures. (e.g. if a household receives £1,000 for primary measures, they can only receive a maximum of £1,000 towards secondary measures).

The government is urging suppliers of the above-mentioned improvements to sign up for TrustMark or Microgeneration Certification Scheme (MCS) accreditation in order to take part in this scheme.

Homeowners and landlords will need to apply for a voucher online. Once the works are agreed, vouchers will start to be issued from the end of September.

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying. The Student Loans Company (SLC) is a non-profit making government-owned organisation that administers loans and grants to students in universities and colleges in the UK.

As many students have started securing a university or college place, the SLC has published a press release aimed at helping dispel some common myths on student finance and Clearing 2020. Clearing is the process by which universities and colleges fill any remaining places they still have on their courses by matching students looking for a university place with unfilled places. This represents the last opportunity to apply for a place at university before the start of the academic year.

The press release ‘busts’ the following myths:

• Myth: If I get a place through Clearing it’s too late to apply for student finance.
• Myth: If I’ve already applied for student finance and my course changes through Clearing, I don’t have to do anything.
• Myth: I need to send my Passport and a signed terms and conditions to receive my student finance.
• Myth: It takes ages to apply for student finance because my parents or partner need to send paper forms and evidence.
• Myth: There’s no information available on student finance and Clearing.

For more information on any of these issues search for the press release on the GOV.UK website.

The definition of a connected person for tax purposes can be complex and varies depending on the circumstances.

A statutory definition of “connected persons” for tax purposes is set out in Section 839 of the Income and Corporation Taxes Act (ICTA) 1988.

The general situation in Section 839(2) of ICTA 1988 states:

"A person is connected with an individual if that person is the individual’s wife or husband, or is a relative, or the wife or husband of a relative, of the individual or of the individual’s wife or husband."

Section 839(8) of ICTA 1988 states that, in this context, "‘relative’ means brother, sister, ancestor or lineal descendant." Married partners are connected with each other.

The term 'relative' does not cover all family relationships. In particular it does not include nephews, nieces, uncles and aunts.

However, the definition of connected persons is extended for Inheritance Tax to include the individual’s uncle/aunt, nephew/nieces and their spouse, spouse’s uncle/aunt and spouse’s nephew and niece.

There are further categories of connected persons in respect of trustees, acquisitions and disposals of partnership assets and in relation to companies.

New credit card fees for paying HMRC are to be introduced from 1 November 2020. These changes will mean that HMRC will be able to charge anyone using a business debit card a fee for making certain payments.

The fee for using a business debit card from 1 November 2020 is difficult to calculate but is essentially comprised of three elements. These are the merchant acquirer fee, the interchange fee and the scheme fee. The charge is designed to cover the costs incurred by HMRC in accepting payment by a business debit card. 

There are already rules in place where charges are levied for payment by corporate, business and commercial credit cards. HMRC has not accepted personal credit cards since January 2018 when credit card surcharges on personal credit cards were banned. Payment by personal debit card is currently fee-free. There is also no charge for payment by Direct Debit, bank transfer or cheque.
 

Vehicle owners with a MOT expiry date between 30 March 2020 and 31 July 2020 were given a 6 month extension. This measure was designed to help motorists as the Coronavirus pandemic began to take hold. Mandatory MOT tests for car, motorcycle and van owners in England, Scotland and Wales were reintroduced from 1 August 2020. This means that any driver whose vehicle is due for an MOT test from 1 August 2020 is required to get a test certificate as normal in order to continue driving their vehicle.

The Driver and Vehicle Standards Agency (DVSA) has issued a timely press release encouraging drivers whose MOT is due this autumn to get their vehicle’s MOT done as soon as possible in order to beat the expected rush for tests. This is because vehicles that were given an extension and those that would normally be due their MOT will both need to be tested.

The DVSA is predicting that September, October and November 2020 are likely to be very busy months for MOT centres. If your MOT is due in September, you can get it done in August (up to a month minus a day before its due) and keep your renewal date. You cannot use your vehicle if your MOT runs out and there are fines of up to £1,000 for driving without a valid MOT.

It is also important to remember that vehicles must be kept roadworthy even if the MOT date has been extended. If you are not using your car, you can register your vehicle as off the road by obtaining a statutory off road notification (SORN). This will see any remaining full months of vehicle tax refunded and you could also look into cancelling your car insurance (with a SORN). The rules are different in Northern Ireland where a phased return to MOT testing is underway.

Lockdown changes – in England – that were due to come into effect on 1 August 2020, have been delayed until at least 15 August. The last-minute announcement by the Prime Minister, Boris Johnson, followed worries of a rise in COVID cases and means that casinos, bowling alleys and ice skating rinks will remain closed in England for the time being.

The government has also paused pilot schemes to trial opening indoor events such as the gradual reopening of indoor theatres and other live performance venues. The planned pilot trials for large scale sporting events have also been put on hold. The government has said they will resume pilot events if and when it is safe to do so.

The announcement also affects the planned reopening of close contact beauty services which require staff and customers to be face-to-face and in very close proximity. Examples include, facial hair removal services, facial treatments, make-up applications and eyebrow treatments. Wedding ceremonies can still go ahead with up to 30 people, but small wedding receptions are not allowed.

It was also announced that face coverings will be required in more indoor settings such as places of worship, social clubs, community centres, cinemas and museums. This is mandatory in England from 8 August 2020.

The government further announced new restrictions in parts of northern England after a localised spike in virus cases.
The UK government is only responsible for lifting lockdown restrictions in England. This is because health is a devolved matter, accordingly, Scotland, Wales and Northern Ireland are responsible for their own public health policies.

The government has launched a new scheme – open to anyone in England – with a bike in need of repair. The Fix your Bike Voucher Scheme is a new initiative that has been championed by the Prime Minister, Boris Johnson, to help fix old bikes by offering a £50 bike repair voucher towards the total cost of repairs needed. The scheme hopes to provide an alternative to using public transport, reduce short car journeys and keep more people fitter whilst using a socially distanced form of transport.

The scheme opened just before midnight on 28 July when the first batch of 50,000 vouchers were due to be released. It is expected that up to 500,000 bike vouchers will be available in total. However, there have been issues with the website and vouchers are being rolled out in batches in order to reflect the capacity of the bike repairers signed up to the scheme. If you are interested in requesting a voucher, the sign up page is on the Energy Saving Trust website at https://fixyourbikevoucherscheme.est.org.uk/

Vouchers can only be used with authorised bike repairers or mechanics that are registered for the scheme in England. Up to two vouchers can be claimed per household, but only one used per bike. You will need to have the voucher before going to get your bike repaired.

The government is also moving ahead with plans to encourage alternative ways of travelling such as cycling and walking. This includes the provision of pop-up bike lanes with protected space for cycling, wider pavements, safer junctions, and cycle and bus-only corridors in England as part of a £250 million emergency active travel fund.

The government has confirmed allocations for individual councils in England from the £500 million of additional support for Coronavirus-related spending pressures. This further injection sees a total of £4.3 billion in direct funding to councils to help with issues caused by the Coronavirus pandemic. The money is being distributed to councils based on population and levels of deprivation, and how the costs of delivery of services varies across the country.

The government has also announced a co-payment scheme that will compensate councils for irrecoverable income losses from sales, fees and charges such as from parking and from heritage services. They will be expected to absorb the initial 5% of losses compared to planned income from these sources. Thereafter, there will be a cost splitting arrangement where 75p in every pound of relevant losses will be compensated for by the government. The scheme does not cover lost commercial rent income.

Local Government Secretary Rt Hon Robert Jenrick MP said:

'Councils are playing a vital role in our national fight against Coronavirus, providing a lifeline for so many and supporting communities at a time when they need it most. That’s why we are giving them an extra £500 million – taking our total additional funding provided to £4.3 billion – and today I am setting out how this will be allocated to councils fairly based on the pressures they have told us they are facing. This comes on top of the co-payment scheme announced last week that will compensate councils for irrecoverable income losses from sales, fees and charges.'

The government has published the draft legislation for Finance Bill 2020-21, along with accompanying explanatory notes, tax information and impact notes. The consultation on draft clauses is intended to make sure that the legislation works as intended. The consultation will close on 15 September 2020.

The Finance Bill will contain the legislation for some of the tax measures that have been previously announced by the government many of which have since been the subject of further consultation.

The publication of the draft Finance Bill is in line with the current approach to tax and where the government committed to publishing most tax legislation in draft for technical consultation before the legislation is laid before Parliament.

This Finance Bill will see the introduction of a number of measures from April 2021 including:

• Changes to the van benefit charge regarding zero emission vans.
• Changes to collective money purchase pension schemes.
• Changes to the treatment of termination payments and post-employment notice pay for Income Tax.
• Changes to working time requirements for Enterprise Management Incentives.
• New rates of Stamp Duty Land Tax for non-UK residents from 1 April 2021.