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Government confirms Coronavirus tax concessions in amended Finance Bill
23 Jul

The Finance Bill 2020 has now reached the report stage in Parliament. In response to the impact that COVID-19 has had on the country, the Government has confirmed several temporary tax concessions.
To help you make sense of these changes we have prepared a useful summary:
Taxation of Coronavirus support payments
The Government has confirmed that grants to help businesses, employers and individuals affected by the Coronavirus crisis are taxable income. This includes payments made under the:
- Coronavirus Job Retention Scheme (CJRS)
- Self-Employment Income Support Scheme (SEISS)
- Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS)
- Business supporting grant schemes.
The legislation ensures that grants made under the schemes are within the scope of Income Tax and Corporation Tax. However, whether any tax is paid will depend on the overall tax position in each case.
The amendment to the Bill also provides HM Revenue & Customs (HMRC) with additional compliance and enforcement powers in relation to the CJRS and SEISS.
Protected pension age of members employed as a result of Coronavirus
The tax regime applicable to registered pension schemes will be amended to ensure that those who have retired but return to employment to support the Coronavirus response do not suffer adverse tax impacts.
This amendment ensures that individuals in this position do not lose their ability to receive pension benefits at an age below the current normal minimum pension age. The changes are retrospective to 1 March 2020.
Modifications of the statutory residence test in connection with the Coronavirus
The statutory residence test will be modified so that a day on which an individual is required to be in the UK to undertake work specifically related to coronavirus will be disregarded for the purposes of determining whether they are tax resident in the UK in the 2019-20 or 2020-21 tax years.
Future Fund – EIS and SEIS relief
Through its latest amendments to the Bill, the Government has confirmed that investors in a company who support the company using a Future Fund convertible loan note will not lose relief on any previous EIS or SEIS investmentswhen that loan is redeemed, repaid or converted.
If any of these actions occur in the relevant holding period for the shares, they may be treated as the passing of value from the company to the investor.
Interest and surcharges on liabilities deferred due to the Coronavirus pandemic
Section 135 Finance Act 2008 provides that no interest or surcharge applies to payments due to HM Revenue & Customs (HMRC) deferred as a result of a disaster or emergency specified by HM Treasury (HMT).
A new measure outlined in the Bill enables HMRC to disapply interest and surcharges which would otherwise arise in relation to the specified deferrals that have been offered during the pandemic.
The disposal of interest from a main residence in a three-year period
Through amendments to the Bill the Government will introducean extension to the three-year time limit in which to dispose of a previous main residence, and so qualify for a refund of the three per cent higher rate tax, where exceptional circumstances prevent the sale of a previous main residence within that period.
This temporary change only applies where the three-year time limit to sell the previous main residence ended on or after 1 January 2020.
Enterprise management incentives – disqualifying events
The Government will introduce a time-limited exception for participants of enterprise management incentives (EMI) share schemes who are not able to meet the necessary working time commitment due to COVID-19.
The modifications affect all matters from 19 March 2020 and will come to an end on 5 April 2021. This includes a provision for HM Treasury to extend the exception for a further 12 months by regulations if the Coronavirus pandemic has not ended by April 2021.
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