Merry Christmas and a Happy New Year

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Merry Christmas and a Happy New Year from all at Gareth Hughes & Co.

Our office will close at 1pm on Friday 24 December 2021 and re open at 9am on Tuesday 4 January 2022.

 

HMRC’S TAX TAKE FALLS BY BILLIONS DUE TO PANDEMIC

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HMRC saw a drop of almost £30 billion in tax revenues in the latest financial year because of the pandemic, according to its annual accounts.

In its 2020/21 annual report, HMRC reported that it had collected £608.8 billion in tax revenues, which is down from £636.7 billion collected in 2019/20.

HMRC said the drop was due to the ‘unprecedented economic circumstances caused by COVID-19, and because pandemic restrictions meant HMRC had to reduce its compliance activity’.

The reduction in compliance activity resulted in a drop of 18% in the additional tax generated by HMRC’s work tackling avoidance, evasion, and other non-compliance. This fell from £36.9 billion to £30.4 billion. The tax authority has estimated that the tax gap is now 5.3%.

HMRC reported that it delivered £60.7 billion in grants through the Coronavirus Job Retention Scheme (CJRS).

Jim Harra, HMRC’s First Permanent Secretary and Chief Executive, said:

‘Throughout this exceptionally challenging year, we kept all our core services running and ensured customers could access the right help when they needed it. To do this, we had to make choices about how we balanced our resources – for example, we took the conscious decision to divert some of our skilled advisers from PAYE and Self Assessment services to provide COVID-19 support because that’s what individuals and small businesses needed from us most urgently at a time of acute crisis.’

Internet link: GOV.UK

THREE-DAY WAIT FOR STATUTORY SICK PAY TO RETURN NEXT YEAR

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The standard three-day waiting time for Statutory Sick Pay (SSP) will be reinstated for coronavirus (COVID-19)-related claims from 25 March 2022, unless the government intervenes.

Under standard rules in the UK, employers do not have to pay SSP to an employee until the fourth qualifying day in the Period of Incapacity for Work (PIW). The PIW is a period of sickness lasting four or more consecutive calendar days, not all of which may be qualifying days.

During the COVID-19 pandemic, the government suspended the three-day wait for COVID-related SSP, meaning that employers must pay it from the first qualifying day.

The amendment to the SSP rules was made in the Coronavirus Act 2020 which is due to expire after two years. This means that, unless there is an intervention to continue the measure, COVID-related SSP waiting time will automatically revert to three days on 25 March 2022.

Frank Haskew, Head of the Tax Faculty at the Institute of Chartered Accountants in England and Wales (ICAEW), said:

‘The SSP rules were not really designed with a highly infectious global pandemic in mind, which is why the current easements have been welcome.

‘While some employees who are ill from coronavirus or required to self-isolate may be unable to afford not to go to work unless they are paid SSP for the first three days, there are also small businesses where the unreimbursed cost of paying three days’ coronavirus-related SSP to employees is a real burden.’

Internet links: ICAEW website