It has been at least 2 weeks since I last put out an update, I try not to bombard you with Covid related stuff, like you I too am fed up of it !! , but below are a couple of important developments so persevere with me, I will try to be brief without missing out the salient points.
CJRS compliance and other problems
HMRC is sending compliance letters to certain employers about the claims they have made under the CJRS.
A compliance letter will be triggered where employer has apparently made a claim for ineligible employees, or a claim has been miscalculated.
HMRC has said that it will focus on fraudulent claims and not on cases where the employer has made an innocent error. However, the difference between a genuine mistake and an apparent fraud may not be discernible to the HMRC computer without further investigation.
There are penalties for submitting an excessive CJRS claim, as set out in Notice CC/FS48. The penalty is not applied if the over-claim is corrected within the later of;
90 days from the receipt of the grant, and 20 October 2020.
There are no penalties for submitting an inaccurate CJRS claim which resulted in a grant that was lower than the employer was entitled to.
Where employers are making CJRS claims for 100 or more employees at one time they can submit the data on a spreadsheet. HMRC provides a template for this purpose. The HMRC guidance says that files submitted as .xls .csv and .ods are all acceptable, but recently the .xls files have been rejected. If you get an error message submitting an .xls file, convert it to .cvs and resubmit it, ask us if you need help
Planning the moving date
The property market is starting to fizz again in some parts of the country, as pent-up demand built up during the lock-down is released. If you are planning to move home, you should be aware of the nine-month rule.
For disposals made on or after 6 April 2020, only the last nine months of ownership can be deemed to be a period of occupation, so that portion of the gain qualifies for CGT main residence relief. This “final period” was previously 18 months, and it is still 36 months where the owner or spouse has moved into residential care, or is disabled.
You may be tempted to move into your new home before the old one is sold, but that could leave the gain on the old home exposed to CGT, if the delay in selling the old home exceeds nine months. However, where contracts have already been exchanged to acquire the new home, the gain arising on that property could theoretically be exposed to CGT if the delay to taking up residence is extensive.
The solution is found in TCGA 1992, s 223ZA, which legislates concession D49 with effect from 6 April 2020. Where the delay in moving into a property is due to construction of the building, renovations to the building, or a delay in selling the taxpayer’s previous residence, that delay can be a deemed period of occupation where it doesn’t exceed 24 months.
It may be better to delay the move into the new home, if the sale of the old home falls through and the whole marketing process has to start from scratch.
Where the family are concurrently occupying both homes, say the children are at the new residence in order to start new schools, don’t forget to make an election as to which home is considered to be the main residence.
That’s it for this week…unless tomorrow brings the unexpected !
Stay calm…live brilliantly…and do at least 3 important or kind things each day!
The information contained in this article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.