The UK's Supreme Court has found in favour of small firms receiving payments from coronavirus (COVID-19) business interruption insurance policies.

The test case was brought against insurers by the Financial Conduct Authority (FCA). The ruling means that thousands of small businesses are now set to receive insurance payouts covering losses from the first national lockdown.

Eight insurers, including Hiscox, RSA, QBE and MS Amlin, agreed to be part of the test case and the ruling could now cost the insurance sector hundreds of millions of pounds.

Hiscox was challenged by 30,000 policyholders, who formed the Hiscox Action Group, as part of the case.

Commenting on the ruling, Flora Hamilton, Financial Services Director at the Confederation of British Industry (CBI), said: 'At such an uncertain time, this court case provides much-needed clarity to companies across the UK, and relief for smaller firms struggling with cashflow.

'This is significant news for insurers, and regulators will need to work closely with the industry as policies, products and processes are updated to reflect this ruling.'

HMRC says it will accept coronavirus (COVID-19) as a reasonable excuse for the late filing of self assessment tax returns.

However, taxpayers must submit the return as soon as possible and explain how they were affected by COVID-19 in the grounds for appeal. HMRC has also enhanced 'Time to Pay' arrangements so that taxpayers who have filed a self assessment return will be able to make payments over an extended period.

The automated self-serve Time to Pay online service has been changed to enable self assessment liabilities of up to £30,000 to be paid in up to 12 instalments.

A spokesperson for HMRC said: 'We want to encourage as many people as possible to file on time even if they can't pay their tax straight away, but where a customer is unable to do so because of the impact of COVID-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.

'Support is in place for those who may struggle to pay, with customers able to spread their payment liabilities of up to £30,000 over 12 months.'

Tax payments worth over £69 million are being spread through HMRC's Time to Pay facility, according to the tax authority.

HMRC said that nearly 25,000 self assessment taxpayers have set up an online payment plan to manage their tax liabilities in up to 12 monthly instalments.

Last October HMRC increased the threshold for self-serve Time to Pay arrangements from £10,000 to £30,000. Once self assessors have completed their 2019/20 tax return and know how much tax they owe, customers can use the self-serve facility to set up monthly direct debits and spread the cost of their tax bill.

The Time to Pay threshold was increased to help businesses and individuals who have been adversely affected by the coronavirus (COVID-19) pandemic.

Karl Khan, HMRC's Interim Director General for Customer Services, said: 'We know the past year has been tough for many businesses and self-employed people, which is why we're helping them spread the cost of their tax bill into monthly payments.

'Self assessment customers can use the self-serve Time to Pay facility for amounts up to £30,000, with almost 25,000 customers already benefiting from the service.'

HMRC has reminded employers that there are now monthly deadlines for claims for furloughed staff under the Coronavirus Job Retention Scheme (CJRS).

Chancellor Rishi Sunak extended the CJRS until the end of April 2021. The CJRS was supposed to have ended after being scaled back to cover 60% of salaries during October 2020.

However, following the second national lockdown for England, the Chancellor confirmed that the CJRS will continue to pay up to 80% of an individual's wage, up to £2,500 per month.

HMRC has stated that claims must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend, in which case the deadline is the next weekday. This means employers must submit December claims no later than 14 January.

Employers have until 28 January if they have already submitted claims for December but need to make changes or claim more assistance.

In his November 2020 statement to Parliament, the Chancellor said: 'The government will continue to help pay people's wages, up to 80% of the normal amount.

'All employers will have to pay for hours not worked is the cost of employer national insurance contributions (NICs) and pension contributions.'

The Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to publish draft regulations and guidance on the forthcoming changes to the Construction Industry Scheme (CIS).

The ICAEW has called for HMRC to 'move quickly' to give businesses enough time to prepare. The CIS changes are set to take effect from April 2021. However, HMRC is yet to publish secondary legislation, guidance or IT specifications that will be required for businesses to make the relevant changes.

The ICAEW has also voiced concerns over plans to remove firms' ability to take account of the cost of materials when paying down the chain. It warned that this change could result in businesses having insufficient funds to pay subcontractors.

Commenting on the upcoming CIS changes, the ICAEW said: 'As there are now only three months until the implementation date, consideration should be given to deferring commencement until April 2022.'

The approach of the 31 January self assessment tax return deadline will bring a surge in scams, HMRC has warned.

HMRC issues thousands of SMS messages and emails as part of its annual self assessment tax return campaign. However, the tax authority has warned taxpayers completing their returns to avoid being caught out by fraudsters using calls, emails or texts to offer fake 'tax rebates' or 'tax refunds'. HMRC has reminded taxpayers that if it sounds too good to be true, it probably is.

In the last 12 months the tax authority has responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious webpages to internet service providers. 

Almost 500,000 of the referrals from the public offered bogus tax rebates, whereby fraudsters use phone, email or text messages to contact their victims, primarily offering them fake tax rebates in order to extract their personal details.

Impersonation scams use language intended to convince victims to hand over personal information, including bank details, in order to claim a 'refund'. There are also reports of scammers becoming aggressive and threatening towards victims.

Karl Khan, HMRC's Interim Director General for Customer Services, said: 'If someone calls, emails or texts claiming to be from HMRC offering financial help or asking for money, it might be a scam. Please take a moment to think before parting with any private information or money.'

Gross lending to small and medium-sized enterprises (SMEs) in the first three quarters of 2020 reached £54 billion driven by coronavirus (COVID-19) loan schemes, according to figures from trade body UK Finance.

That represents more than double the annual total of borrowing reached by SMEs in 2019, UK Finance said.

Nationally, UK lenders have issued 229 Bounce Back loans via the Bounce Back Loan Scheme (BBLS) and ten Coronavirus Business Interruption Loan Scheme (CBILS) facilities for every thousand businesses, dwarfing loan approval volumes seen in previous years.

Since the extension of government support from November 2020, UK Finance estimates that £600 million in funding has been made available through the topping-up of existing BBLS facilities.

Commenting on the data, Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: '2020 was a challenging year with the disruption of COVID-19 restrictions and uncertainty ahead of the end of EU transition.

'While the business community in aggregate does not appear overindebted with liquidity reserves and capacity to provide finance strong overall, many individual businesses and some specific sectors are facing significant and much more extended disruption and may find themselves in financial difficulty in 2021.'

HMRC has revealed that 2,700 tax returns were filed on Christmas Day 2020.

Peak filing time on Christmas Day was between 2:00pm and 2:59pm, when more than 200 taxpayers filed their returns online.

20,200 tax returns were filed on Christmas Eve and 8,500 tax returns were filed on Boxing Day, HMRC revealed.

The deadline for submitting your 2019/20 self assessment tax return is midnight on 31 January 2021. The only exception to this rule is if you received a notice from HMRC to make an online tax return after 31 October 2020. In this case, you have three months from the date of issue to submit your return.

Those who are late in submitting their return face a penalty of £100, even if there is no tax to pay, or if the tax has been paid on time. Additional penalties are due for continued late payments and late filing.

Commenting on the data, Karl Khan, Interim Director General for Customer Services at HMRC, said: 'Online self assessment means customers can do their tax returns at any time, day or night – even on Christmas Day if they want to.

'We're here to help customers get their tax right, and there's support available 24/7.'

Business groups have welcomed Chancellor Rishi Sunak's latest lockdown support package for businesses, but have urged him to do more.

The Chancellor announced a £4.6 billion package of one-off grants to support businesses in the retail, hospitality and leisure sectors.

However, Rain Newton-Smith, Chief Economist at the Confederation of British Industry (CBI), said: 'For some, demand has once again evaporated overnight, and in northern England some firms have been labouring under stop-start orders for months already.

'Therefore extending the job retention scheme to end of the second quarter would provide firms with a clear line of sight, aiding planning and investment.'

Meanwhile, the Association of Independent Professionals and the Self-Employed (IPSE) said that the new business support package 'misses the mark'. IPSE has urged the government to work with business groups to plug the gaps in support for the self-employed.

Derek Cribb, CEO of IPSE, said: 'There's no doubt the new lockdown measures will have a severe impact on the already struggling self-employed sector. The school closure is also likely to hit self-employed parents particularly hard, cutting into their working week.

'The new support package, aimed at businesses with premises, misses the mark and will do little to mitigate the financial damage to the self-employed sector. After almost a year, there are still drastic gaps in the support available to the self-employed, with over 1.5 million sole directors, newly self-employed people and others still excluded.'