Further Update 3rd April 2020

             *First Client Receives Coronavirus Small Business Grant of £10000 from Wigan Council*

Update 3rd April 2020

Coronavirus Statutory Sick Pay Rebate Scheme

HMRC has announced further details and guidance in relation to the SSP rebate scheme. These are as follows:

  • The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
  • Employers who pay more than the current rate of SSP can only claim the current rate amount.
  • The repayment will cover up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either:
    • have coronavirus
    • cannot work because they are self-isolating at home
  • Employees do not have to provide a doctor’s fit note for a claim to be made

Who can use the scheme

The scheme can be used by employers if they:

  • are claiming for an employee who’s eligible for sick pay due to coronavirus
  • had a PAYE payroll scheme that was created and started on or before 28 February 2020
  • had fewer than 250 employees on 28 February 2020

The scheme covers all types of employment contracts, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

HMRC will advise when the scheme will end.

Connected companies and charities

Connected companies and charities can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020.

Records employers must keep

Employers must keep records of all the statutory sick payments that they want to claim from HMRC, including:

  • the reason why an employee could not work
  • details of each period when an employee could not work, including start and end dates
  • details of the SSP qualifying days when an employee could not work
  • National Insurance numbers of all employees who SSP has been paid to

Employers will have to keep these records for at least 3 years following a claim.

The online service through which the SSP can be reclaimed is not yet available.

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Update 31st March 2020

More detail provided on the Coronavirus Job Retention Scheme (CJRS)

As originally announced the CJRS was, perhaps understandably, lacking in detail but HMRC has now provided more details of the scheme. These include:

  • government to cover employer National Insurance and pension contributions of furloughed workers – on top of 80% of salary and over and above the £2500/mth/worker cap
  • salary (or wage) does NOT include fees, commission or bonuses
  • there is no requirement to ensure that furloughed employees are paid the National Living Wage (NLW) or National Minimum Wage (NMW); they must be paid the lower of 80% of their salary or £2500 even if, based on their normal working hours, this would be below the NLW/NMW
  • those furloughed can volunteer for the NHS without risking their pay
  • employees made redundant after 28th February 2020 can be re-employed and placed on furlough
  • employees must be furloughed for a minimum of 3 weeks but an individual employee may be furloughed multiple times. This means that employers can rotate furloughed workers as long as they keep to the minimum 3 week furlough period
  • furloughed employees will accrue holiday because they are still employed
  • employees on sick leave can be furloughed when they are fit to return to work but not before
  • employees who are shielding (i.e. self-isolating because they are in the “high-risk” group) can be furloughed
  • furloughed employees retain all the same rights they did previously including SSP entitlement, redundancy pay, maternity and other parental rights, etc.

Importantly, information has now been released about how to make a claim for reimbursement of the 80% although it is not expected that the online claims service will be available until the end of April. Claims can be submitted no more than once every three weeks and can be backdated to 1st March 2020.

The following information will be required:

  • your PAYE reference number
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 weeks)
  • your bank account number and sort code
  • your contact name
  • your phone number

If your payroll is handled by HullJady then we will be in touch with you about making the claims.

HMRC retain the right to retrospectively audit all aspects of each claim.

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

The delay in obtaining reimbursement for furloughed employees is causing significant problems for some business owners who simply do not have the capital available to pay employees’ wages until the end of April. Unfortunately for such business owners the only options currently available under the Covid-19 support schemes would seem to be the cash grants of £10K for all businesses in receipt of small business rate relief or £25K for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000 or the Coronavirus Business Interruption Loan Scheme (CBILS) providing loans of up to £5M for SMEs.

The grants are being disseminated to businesses by the local authorities and our experience is that how quickly the process is happening depends very much on which local authority you come under. If you envisage having issues in meeting your salary costs in the short term then do get in touch with your local authority to chase up your grant if you are entitled to one.

If you believe that the CBILS may be of assistance to you then contact us and we will be happy to discuss this and help with the process. More information on the scheme and how to apply can be found here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Update

Update

Update 27th March 2020

Self-Employment Income Support Scheme

The government has now announced new measures designed to provide support for the self-employed, including members of a partnership, who have been adversely affected by Covid-19.

Full details of the scheme can be found here:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

The main points are:

  • Applications cannot be made yet. HMRC will contact you if you are eligible for the scheme and invite you to apply online
  • Access to the scheme is ONLY through GOV.UK.
  • Claims can be for a taxable grant worth 80% of trading profits up to a maximum of £2500 per month for the next 3 months. This term may be extended if necessary
  • Applicants will be self-employed individuals or members of a partnership
  • Applicants must have submitted their self-assessment tax return for 2018-2019; if not then it must be submitted by 23rd April 2020
  • Applicants must be trading when they apply or would be except for Covid-19 and intend to continue trading in tax year 2020-2021
  • Applicants must have lost profits due to Covid-19
  • Self-employed trading profits must be less than £50000 and more than 50% of income from self-employment
  • Grants will be calculated from the average profits for tax years 2016-2017, 2017-2018 and 2018-2019 (where applicable) and will be paid in one instalment directly into the Applicant’s bank account


If anyone contacts you claiming to be from HMRC saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam. HMRC are not expecting to make any payments to the self-employed until June so will not help immediate cash flow difficulties.

Further points to remember

 Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 may be deferred until 31 January 2021.

Eligibility

You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.

The deferment is optional. If you are still able to pay your second payment on account on 31 July, you should do so.

How to access the scheme

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment until January 2021.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.

If you are unsure about any of the relief available to your business and/or to your employees or simply require additional clarification then please don’t hesitate to contact us, either by phone on 01942 760500 or by e-mail on info@hulljady.co.uk

As and when any further updates become available we will ensure that you are made aware of them.

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Update 23rd March 2020

New, additional, measures have been introduced to provide support to businesses and their employees and also more detail has now been provided on some of the measures already unveiled. These are as follows:

  • Coronavirus Job Retention Scheme providing grants to businesses to cover 80% of the salary of PAYE employees who would have otherwise been laid off as a result of the crisis
  • Deferral of the next quarter’s VAT payments until the end of June 2020
  • Deferral of income tax payments due in July 2020 until January 2021
  • Universal Credit now available to the self-employed at the same rate as SSP
  • More detail on the Coronavirus Business Interruption Loan Scheme is now available. See https://www.british-business-bank.co.uk/new-coronavirus-business-interruption-loan-scheme-opens-to-smaller-businesses-across-the-uk/
  • Business rates holiday for nurseries in England for the 2020-2021 tax year. No action needs to be taken although council tax bills may need to be reissued to exclude the business rate charge
  • Mortgage & Rent holidays allowing mortgage borrowers (both residential and buy-to-let) and tenants to apply for a 3 month payment holiday from their lenders and landlords respectively
  • Availability of SSP for up to 2 weeks for directors of limited companies with less than 250 employees who need to self-isolate

More detail on these measures, including specific eligibility requirements and how to apply, can be found here https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

If you are unsure about any of the relief available to your business and/or to your employees or simply require additional clarification then please don’t hesitate to contact us, either by phone on 01942 760500 or by e-mail on info@hulljady.co.uk

As and when any further updates become available we will ensure that you are made aware of them.

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Update 19th March 2020

You may have heard the announcements about the government’s proposals to help businesses affected by Covid-19. They include a package of measures to support businesses including:

  • a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
  • a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • the HMRC Time To Pay Scheme, details of which can be found here: - https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

The exact details of how these schemes will work are still being developed but it looks likely that the grant funding and rates holidays will be offered by the local authority and that they will contact those businesses eligible for support directly, once the government has made this funding available to local authorities, expected to be some time in April.

More details of the Business Interruption Loan Scheme are available by following the link at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/  It is likely that that businesses’ own banks will offer the loans but we have no details of the terms under which they will be offered. We do know that the scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’, but the borrower always remains 100% liable for the debt.

SSP

Regarding SSP, the government have confirmed that SSP will be payable to employees from Day 1 of their sickness absence due to Covid-19 rather than on the 4th day. Employers who employ fewer than 250 employees will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

So although it looks as if businesses will be able to reclaim some SSP, the mechanism by which the claim will be made has not yet been announced.

We’ll keep our clients posted as soon as we learn more details.

If you have any specific or urgent concerns in relation to the impact of Covid-19 on your business and how this may be mitigated then please contact us and we will do all we can to assist you.

 

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