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Email: info@exelaccoutancy.co.uk
Welcome to our monthly newswire. We hope you find this newsletter
informative and please contact us to discuss any matters further.
September 2020
• Not passing on the full amount of
construction primarily suited for the
NOTIFY HMRC OF
furlough pay to staff.
conveyance of goods or burden of any
OVERCLAIMED CJRS
description…”
• Failing to account for PAYE tax
“FURLOUGH”
and NIC in relation to furlough
At the Tax Tribunal it was decided that
GRANTS WITHIN 90
payments
modified VW Kombi vans failed this
DAYS
HMRC also have the power to transfer
test whereas modified Vauxhall Vivaro
CJRS penalties to the directors of an
vans did fall within the definition of
insolvent company if their company
goods vehicles.
The calculation of Coronavirus
does not pay them. We therefore
Job Retention Scheme grants
suggest that employers should check
has proven to be complex,
It has now been determined that the
the accuracy and validity of their CRJS
particularly as HMRC frequently
Vauxhalls should also be taxed as
claims as a matter of priority, and
changed the rules and the
motor cars for P11d benefit in kind
ensure that any inaccuracies or errors
method of computation.
purposes. This means that where the
are disclosed to HMRC as quickly as
Consequently, many errors have
vehicle is available for private use the
possible. We can of course assist you
arisen and need to be corrected.
taxable benefit will be based on the
in checking claims.
The latest Finance Act requires
original list price multiplied by a
employers to notify HMRC
percentage based on the vehicle’s
COMPANY VANS WERE
within 90 days where it turns out
CO2 emissions.
MOTOR CARS
that they were not entitled to
receive the furlough grants and
The decision means that employers
there is a penalty for failure to
The Court of Appeal have now ruled
may need to reconsider providing such
notify them.
on the tax status of certain vehicles
vehicles. They may also need to rectify
provided to employees of Coca Cola.
the P11d reporting in respect of earlier
HMRC has said that it will be lenient in
The court has upheld the HMRC view
years and we await further guidance
relation to genuine mistakes, and that
that vans with windows and a second
from HMRC.
penalties will be charged only in cases
row of seats behind the driver are not
of deliberate non-compliance.
goods vehicles but motor cars for
What is also particularly confusing,
benefit in kind purposes.
and thus difficult for businesses to deal
NUMEROUS FRAUDULENT
with, is that the benefit in kind rules are
CJRS CLAIMS IDENTIFIED
not the same as the rules for recovery
of input VAT and it would be useful if
HMRC’s CJRS fraud reporting portal
there was a common definition for tax
had received over 20,000 reports of
purposes.
wrongful claims.
Examples of such wrongful claims
VAT DEFINITION OF “MOTOR
include;
CAR”
• Claiming furlough payments for
staff who are continuing to work
For VAT purposes the definition of a
Consequently, the income tax and
motor car has been amended several
• Furloughing staff but asking them
national insurance payable by
times over the years.
to work “voluntarily” on an unpaid
employee and employer is significantly
basis.
higher than if the vehicles had been
The current definition states:
“Motor
classified as goods vehicles.
car” means any motor vehicle of a kind
• Claiming furlough payments for
normally used on public roads which
“ghost” employees, and those who
has three or more wheels and either:
left employment before 19 March
The income tax legislation defines a
2020.
“goods vehicle” as “a vehicle of a
