Mel's COVID-19 Update: 29th March 2021

Guidance has been updated to explain that the earliest you can make a claim for May 2021 is 19 April 2021.

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2. Temporary exemption from Income Tax benefit in kind charge for employees who get a coronavirus antigen test from their employer

This instrument provides for a new temporary exemption to make sure that employees who are given a relevant coronavirus antigen test by their employer, will not be liable to an Income Tax benefit in kind (BiKs) charge.

The exemption will apply to any relevant coronavirus antigen test provided by an employer, on or after 8 December 2020, until and including, 5 April 2021. For any relevant tests which have been provided earlier in the tax year, before this instrument comes into force, HMRC will exercise its collection and management discretion and will refrain from collecting any Income Tax or Class 1A National Insurance contributions due on the provision of a test.

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3. How to treat certain expenses and benefits provided to employees during COVID-19

The guidance on taxable expenses and benefits when they are paid to employees because of coronavirus, and how to report them to HMRC, has been updated with information about paying or refunding transport costs for employees.

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4. Pay VAT deferred due to COVID-19

You can pay now or join the VAT deferral new payment scheme for VAT payments deferred between 20 March and 30 June 2020.

Information about the maximum number of instalments that are available to you has been updated.

Instalment options available to you - When you decide to join the scheme will determine the maximum number of instalments that are available to you.

The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

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5. Revenue and Customs Brief 4 (2021): partially exempt VAT registered businesses affected by COVID-19

This brief outlines an accelerated process for VAT registered businesses to request temporary alterations to their partial exemption methods (including combined methods) to reflect changes to their business practices because of the coronavirus (COVID-19) pandemic.

Businesses who make a mixture of taxable and exempt supplies can only recover input tax to the extent that it is used in making taxable supplies. Residual input tax (VAT incurred on purchases used to make both taxable and exempt supplies) must be apportioned using a fair and reasonable method to calculate the percentage which is recoverable.

The standard method, based on the value of taxable supplies made as a proportion of all supplies made by the business, is the default method. A Partial Exemption Special Method (PESM) may, however, be used if HMRC is satisfied that it would produce a fairer reflection of the use of residual input tax than the standard method. Proposed PESMs must be approved by HMRC before they can be used.

Businesses using the standard method may, in any given tax year, find that their actual deductible input tax differs significantly from that calculated based on the use of input tax in making taxable supplies. Where this difference exceeds £50,000, or 50% of the residual input tax and £25,000, they must account for the difference between the 2 amounts by applying the standard method override.

A special method override may be required when an existing PESM is found to be unfair. A business can serve a Special Method Override Notice on HMRC, or HMRC can serve one on the business.
HMRC will be using an accelerated process to make sure coronavirus-related changes to partial exemption methods are considered, and where appropriate, approved swiftly.

Requests for such changes should be sent to the email address: This email address is being protected from spambots. You need JavaScript enabled to view it..

All PESM requests must be accompanied by a declaration that the method proposed is fair and reasonable. An example of the format this should take is available in appendix 1 of Partial Exemption (VAT Notice 706).

Where we are satisfied that the aim of the proposal is to address coronavirus issues only, in order to facilitate a quick decision, HMRC will restrict its enquiries to how that proposal addresses those issues. Where there may be significant risk that the remainder of the existing method produces an overall result which is not fair and reasonable, further examination of that method will be considered.

HMRC will apply normal scrutiny to method requests where there is a risk the accelerated process is being used to increase recovery for businesses whose activities have not been directly affected by coronavirus.

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6. Construction update - planning and construction working hours

On 13 May 2020, the government published a written ministerial statement on planning and construction working hours. This statement expects local planning authorities to approve requests to extend construction working hours temporarily to ensure safe working in line with social distancing guidelines until 9pm, Monday to Saturday, unless there are very compelling reasons against this.

A new written ministerial statement was published 25 March 2021 extending the end date of the original statement to 30 September 2021.

Developers should expect their local planning authority to grant temporary changes to construction working hours until 9pm or later, 6 days a week, wherever possible and where construction working hours are controlled by planning condition. This flexibility is in relation to control imposed by the planning system only.

A developer wishing to amend their conditioned construction working hours should contact their local planning authority. They will be able to tell you whether they are happy to agree amended working hours informally, or whether you need to submit a formal application as well as through which route.

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7. Vocational and technical qualifications contingency regulatory framework

A new version of the regulatory framework for awarding vocational and technical qualifications has been uploaded due to a technical issue in the previous document.

This document is part of a suite of documents which sets out the regulatory requirements for awarding organisations offering vocational and technical qualifications affected by the coronavirus (COVID-19) pandemic.

This document sets out the vocational and technical qualifications contingency regulatory framework (the VCR Conditions). These conditions come into effect on 24 March 2021 for all vocational and technical qualifications which fall within categories A and B as defined in Condition VCR1.8.

It also sets out the requirements in relation to the following:

• The adaptation of Category A qualifications and Category B qualifications.
• The determination of results for Category B qualifications.
• The principles to be applied by awarding organisations when adapting Category A qualifications and Category B qualifications and when determining results for Category B qualifications.

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8. Corporate Insolvency and Governance Act 2020

On 25 June 2020, the Corporate Insolvency and Governance Act 2020 (the Act) received royal assent. It came into force on 26 June 2020.

The measures introduced by the Act were designed to relieve the burden on businesses during the coronavirus (COVID-19) outbreak and allow them to focus all their efforts on continuing to operate.

The automatic extensions granted by the Corporate Insolvency and Governance Act will come to an end for filing deadlines that fall after 5 April 2021.

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9. Business ratepayers adversely affected by COVID-19 are to get a £1.5 billion discount on their bills

A new Business Rates relief fund of £1.5 billion for businesses affected by COVID-19 outside the retail, hospitality, and leisure sectors has been announced with targeted support delivered as appeals against rates bills on basis of material changes of circumstance due to the pandemic to be ruled out. The government hopes their relief fund will get cash to affected businesses in the most proportionate and equitable way.

The government set out plans to provide an extra, targeted support package for businesses who have been unable to benefit from the existing £16 billion business rates relief for retail, hospitality and leisure businesses. Retail, hospitality and leisure businesses have not been paying any rates during the pandemic, as part of a 15 month-long relief which runs to the end of June this year.

Many of those ineligible for relief have been appealing for discounts on their rates bills, arguing the pandemic represented a ‘material change of circumstance’ (MCC).

The government has made it clear that market-wide economic changes to property values, such as from COVID-19, can only be properly considered at general rates revaluations, and will therefore be legislating to rule out COVID-19 related MCC appeals.

Instead the government will provide a £1.5 billion pot across the country that will be distributed according to which sectors have suffered most economically, rather than on the basis of falls in property values, ensuring the support is provided to businesses in England in the fastest and fairest way possible.

The governments rationale is that allowing business rates appeals on the basis of a ‘material change in circumstances’ could have led to significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic and disproportionately benefitting particular regions like London.

Business rates are devolved so the devolved administrations in Scotland, Wales and Northern Ireland will receive an additional £285 million through the Barnett formula as a result of today’s announcement.

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10. Ventilation of indoor spaces to stop the spread of COVID-19 - England

Guidance on the ventilation of indoor spaces to stop the spread of coronavirus (COVID-19) has been updated. Ventilation should be considered as part of making your workplace or indoor public space COVID-secure.

Control measures, such as avoiding certain activities or gatherings, restricting or reducing the duration of activities, providing ventilation breaks during or between room usage, should be considered alongside ventilation for reducing the risk of airborne transmission.

Any actions to improve ventilation should not compromise other aspects of safety and security (for example, avoid propping open fire doors), and should consider other consequences such as health and wellbeing impacts from thermal discomfort.

Employers should provide employees with clear guidance on ventilation, why it is important, and instruction on how to achieve and maintain good natural ventilation or to operate systems if there are user controls.

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If you have any questions on the above, please don't hesitate to get in contact. 

Warm regards, 

This email address is being protected from spambots. You need JavaScript enabled to view it.

During COVID-19 I want to ensure that everyone is as up to date as possible with regards to Government changes and support that impacts businesses. Please note that this update is correct as of date of publishing (29th March 2021).