Today’s newsletter is to update you on few things including the VAT Deferral New Payment Scheme and an interesting tale of two Uber drivers who went to the Supreme Court over worker rights and what the outcome could mean for businesses going forward.
I should image after BoJo’s announcement later today and the fast-approaching budget, we’ll have another newsletter out soon.
The National Debt Support Fund
- The Government have now set up a facility for individuals and presumably businesses to make voluntary donations to help pay down the National Debt or to be used for public expenditure. If that is of interest to either you or anyone within your client base please see the link below:
The VAT Deferral New Payment Scheme
Who is it aimed at?
- Businesses who deferred their VAT payments due between 20th March 2020 and 30th June 2020 and have yet to pay it over to HMRC.
What 3 options are presently open to these businesses?
- Pay the deferred VAT over in full on or before 31st March 2021.
- Opt into the VDNPS online service between 23rd February 2021 and 21st June 2021.
- Contact HMRC on 0800 0241222 if you want to ask for additional time to pay above and beyond the time offered through the VDNPS.
What happens if you don’t take up one of these 3 options?
- It could result in you incurring penalties and interest.
What happens if you opt into the VDNPS?
- Depending upon when you join the scheme, you can spread the deferred VAT payments up to 11 instalments.
- The payments will be interest free.
How do you join the VDNPS?
- The online service will be available from 23rd February to 21st June 2021.
- If you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme you will be invited to join the VDNPS sometime later in March. A definitive date has yet to be agreed.
Are there any conditions attached to opting into the VDNPS?
- You must have deferred VAT which was due between 20th March and 30th June 2020.
- You are up to date with your VAT returns.
- You must have corrected any errors on your VAT returns.
- You must pay the first instalment at the time of joining the scheme.
- If you do not already have a Government Gateway account you will need to create one.
- Businesses must opt into the scheme, agents cannot do this on their behalf.
- If for some reason you cannot use the online service then you need to contact HMRC on 0800 0240122.
BUSINESS REPERCUSSIONS FOLLOWING THE UBER CASE
What was the case all about?
- Two former Uber drivers took Uber to court and successfully won the argument at the Supreme Court to be treated as workers rather than self-employed.
Was this to do with the present IR35 rules?
- No – these individuals were not carrying out their work through a Personal Services Company or through partnership or Umbrella Company.
- This would also not be caught by the new Off Payroll working legislation coming in from April 2021 for exactly the same reasons.
- This is simply a self-employment v worker v employment status review issue.
Will this case affect other businesses?
- Possibly – the case brings into focus the status of individuals and their relationship to a business. The issue is not restricted to Uber only and could impact any business using self-employed individuals.
What are the repercussions for a business if a status review is lost?
- The worker/employee could claim to be paid the national minimum wage going back 6 years (5 years in Scotland).
- The worker/employee could claim holiday pay.
- The worker/employee could be entitled to be part of the business auto enrolment pension scheme.
- As an employee, they may be entitled to sick pay/parental leave/redundancy pay plus the right to claim unfair dismissal.
- As a worker, they may be entitled to protection against unlawful discrimination and for whistleblowing.
- HMRC may issue PAYE determinations against the business to recover the PAYE tax and national insurance for the current and earlier years. HMRC are not obliged to offset the tax and NI suffered by the individual to date against that liability.
- Subject to the nature of the work carried out by the ‘worker/employee’, there may be a VAT liability on any supply made by them.
What can be done for the business?
- Carry out a status review, in each case, where the business has engaged the services of an individual on a non-worker/employee basis to ensure that the true relationship fits that criteria.
What should the status review look at?
- What are the terms of the contract? Note the Courts and HMRC will still look behind the contract to see if that is truly what the arrangement is.
- Is there a right of substitution? Who has the right to make that choice, the business or the individual?
- Is the business obliged to provide work and is the individual obliged to carry that work out?
- Does the individual provide their own equipment?
- Does the individual invoice for the work?
- Does the individual have their own business bank account?
- Does the individual have their own website?
- Does the individual have their own liability insurance cover?
- Do they offer themselves out to work for other businesses or individuals?
- Do they have other people working for them?
- Are they registered as self-employed with HMRC?
- Are they VAT registered?
- To the outside world, are they seen as an integral part of your business?
- Do they have their own desk or office space at your premises?
- Does the business control how the work is performed by the individual?
- Can the individual profit from doing the work? E.g. doing the job quicker or being paid more for providing better quality work.
- Subject to the answers to those questions, one must look at the great surround and then make a status judgement.
Who can carry out that review?
- We can carry out that review for you, if that is of interest to you.