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Update 15th October 2020

Extension to Job Support Scheme Announced

We advised you in our 25th September update about the new Job Support Scheme ("JSS") which essentially replaces the Job Retention or "furlough"  Scheme from 1st November. The Chancellor has now announced that the scheme will be expanded specifically to support businesses which are legally required to close due to coronavirus restrictions.

Under the expansion of the scheme the government will pay two thirds of each employees' salary up to a maximum of £2100 per employee per month.

Employers will not  be required to contribute towards wages but will have to cover NICs and pension contributions.

Businesses can only claim the grant whilst they are subject to restrictions and employees must be off for a minimum of seven consecutive days.

In addition to expansion of the JSS the government is making the Local Restrictions Support Grant more generous. Businesses will be able to receive up to £3000 per month and become eligible for payment after two weeks closure, not three. 

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 25th September 2020

Job Support Scheme - the successor to furlough

As you may know the Chancellor has announced a new scheme designed to help businesses affected by Covid-19 to retain their employees. 

Basic details of the scheme are as follows:

  • it will come into force from 1st November 2020 and last for 6 months until April 2021
  • all employers with a UK bank account and PAYE scheme can claim the grant; it is not necessary to have accessed the Job Retention (furlough) Scheme
  • large businesses will need to meet a financial assessment test to show they have been adversely affected by Covid-19; it is not expected that large businesses using the scheme will be paying dividends or the like whilst accessing it
  • the employer will pay its employees for time worked but 1/3 of hours not worked will be paid for by the government (up to a cap of £697.92 a month) with 1/3 being paid for by the employer thereby ensuring that employees receive at least 77% of their usual wages provided the cap isn't exceeded; it is not expected that employers will top up their employees' wage at their own expense
  • to be eligible employees must be;
    • working at least 1/3 of their normal hours for the first 3 months of the scheme; after 3 months this threshold may be revised
    • on the employer's PAYE payroll on or before 23rd September 2020
  • employees can go on and off the scheme and don't have to be working the same pattern each month but the minimum working period is 7 days
  • an employee cannot be made redundant or put on notice of redundancy whilst their employer is claiming the grant for that employee
  • claims can be made from December 2020  - after payment to the employee has been made and reported to HMRC via an RTI return 
  • HMRC will check claims and may withhold payment or require re-payment for claims which are found to be fraudulent or incorrect
  • employers must agree the new short-time working arrangements with their employees, amend employment contracts and notify the employees in writing; the agreement must be made available to HMRC if requested
  • it is HMRC's intention to inform employees of full details of claims made

Further guidance will be issued by HMRC in due course at which time we will send out a further update.

Extension of Self-Employment Income Support Scheme

We have advised you in previous updates on the Self-Employment Income Support Scheme (SEISS) designed to provide grants to self-employed workers who are ineligible for other support schemes such as the Job Retention Scheme. The Chancellor has now extended the scheme from 1st November 2020 until April 2021.

To be eligible for the grant extension self-employed individuals must:

  • currently be eligible for the SEISS (though they do not need to have claimed the grants)
  • confirm that they are currently trading and intend to continue to trade
  • confirm that they are impacted by reduced demand as a result of coronavirus in the qualifying period - which is from 1st November to the date of the claim

The extension will provide 2 grants each covering a 3 month period. The first, from 1st November 2020 to 31st January 2021, will provide an amount covering 20% of average monthly trading profits for the 3 months and capped at £1875. 

The second grant will cover from 1st February 2021 to 30th April 2021 and the level of this grant will be set by HMRC in due course. 

All grants are subject to income tax and National Insurance.

HMRC will provide details on how to claim in due course.

Option to pay smaller VAT payments over longer period

The VAT payments deferral scheme expired on 30th June 2020 however the Chancellor has now announced that businesses who deferred VAT due from 20th March 2020 to 30th June 2020 can now pay in smaller payments up to the end of March 2022 instead of the previous date of March 2021 without paying any interest. 

To take advantage of this scheme you will need to opt-in.

More information on the scheme will be made available by HMRC in the coming months.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 26th August 2020

Job Retention Scheme Compliance Letters

In our Update from 21st August 2020 we advised on how to deal with overclaimed grants made through the Coronavirus Job Retention Scheme (CJRS). We now understand that HMRC is sending out its first batch of compliance letters asking beneficiaries of the scheme who HMRC believe have made unfounded claims - either deliberately or in error - to provide more details of their claims. Failure to be able to substantiate a claim is likely to lead to penalties being imposed by HMRC or, at the very least, a requirement to pay back any overclaimed amounts.

 
If you receive one of these letters and would like our assistance please forward the letter to us and we will work with you to respond. Whilst we haven’t levied a charge for calculating and filing the furlough claims for our clients we will make a charge, which we will agree in advance, for dealing with the response.

Again, if you have not yet received a compliance letter but believe that you may have been the recipient of overclaimed amounts under the CJRS please review our 21st August 2020 Update and contact HMRC to deal with this.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 21st August 2020

Repayment of Overclaimed Furlough Grants

In our Business Support Update of 19th June 2020 we advised that HMRC was having legislation put in place to enable it to investigate and take action against incorrect claims made under the Coronavirus Job Retention Scheme (CJRS) and the Self-Employed Income Support Scheme (SEISS).

Details have been announced of how to correct any overclaims made under the CJRS and thereby avoid any potential actions being taken against you by HMRC. There are two options available:

  • if you are still making claims under the scheme then simply reduce your next claim by the amount previously overclaimed. The claim process gives the option to do this;
  • if you are no longer making claims under the scheme then you will need to make contact with HMRC and ask for a payment reference number. The number will have 14 characters and begins with X. The telephone number to call for HMRC is 0800 024 1222. 

 
If we have handled your claims then let us know and we will be happy to assist you in dealing with the repayment. If you have handled your own claims then once you have the reference number you can pay online using the following details:
HMRC Cumbernauld
Sort Code: 08 32 10
Account No. 12001039

The time limits for notifying HMRC of any overclaimed amounts are the latest of: 

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances had changed
  • 20 October 2020

Failure to pay by the time limits may result in you being penalised and you will also have a tax liability in respect of the overpayment

We would stress that HMRC have said they are not actively looking for innocent errors in the claims process but this does not mean that they will NOT take action in such cases where repayment has not been made.

Again, if you are unsure or concerned about any claims made by you or on your behalf under the scheme then please do get in touch.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 11th August 2020

Self-Employment Income Support Scheme Extension

On 20th May 2020 we advised you about the Self-employment Income Support Scheme (SEISS) designed to provide grants to self-employed workers who are ineligible for other support schemes such as the Job Retention Scheme. The original scheme covered a 3 month period which expired on 13th July 2020 and claims for that period can no longer be filed.

However the scheme has now been extended for a further 3 months running from 14th July 2020. Eligibility for the second grant will be determined in the same way as for the first and HMRC will again contact you if you are eligible. To be able to claim the second grant you will need to be able to confirm to HMRC that your business has been adversely affected by Covid-19 on or after 14th July 2020. The grant will be worth 70% of your average monthly trading profits and will be paid out in a single instalment covering 3 months' worth of profits, capped at £6750.

You can make a claim for the second grant whether or not you made a claim for the first grant. If you receive the grant you can still continue to work, start a new trade or begin other employment which includes voluntary work but to claim you must also intend to continue to trade in the 2020-2021 tax year.  The grant doesn't have to be repaid but it is subject to Income Tax and to self-employed National Insurance.

Reasons for your business to be adversely affected by Covid-19 could include:

  • you or your staff are unable to work because you or they are shielding, self-isolating, have caring responsibilities or are on sick leave because of Covid-19
  • your trade has stopped, been reduced or you've incurred additional costs because:you have no/fewer customers or clients
  • your staff cannot come into work
  • your contracts have been cancelled
  • you had to buy protective equipment to enable you to trade following social distancing rules

You must keep evidence to confirm that your business was adversely affected at the time you made your claim.

Claims must be made on or before 19th October 2020 and must be made by the claimant NOT by their agent or tax advisor.

The online claims service is not yet open but if you are eligible you will be able to make a claim from 17th August 2020. If you are not eligible to claim a grant through the SEISS then other help may still be available.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 9th July 2020

Job Retention Bonus Scheme

You probably saw on the news that the Chancellor has announced an additional feature to the Job Retention Scheme, namely the payment of a bonus to employers who keep employees in work until at last 31st January 2020. We thought we'd send a circular round setting out the main points of the scheme for your information.

The bonus is a one-off payment to any employer that has used the Coronavirus Job Retention Scheme.

To be eligible the qualifying employees must:

  • earn at least £520 per month on average for each of November, December and January
  • have been furloughed at some point and been legitimately claimed for under the furlough legislation
  • have been continuously employed until at least 31st January 2021

Claims for the bonus can be made from February 2021 after accurate RTI information covering up to 31st January 2021 has been provided to HMRC.

The intention of the bonus is to provide further assistance to employers to retain employees.

As and when any further details of the bonus scheme are provided we will let you know.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 3rd July 2020

Self Assessment Payment Deferral

A Reminder

For those of you who were due to make a payment on account of your self-assessment tax bill on 31 July we wanted to remind you of the concession introduced by HMRC as part of the Covid-19 measures.  Normally this payment in relation to the 2019-2020 tax year would be due by 31st July 2020. However HMRC have deferred the due date to 31st January 2021.

Some clients may be receiving statements from HMRC that give the payment date as 31st January 2021 and we can confirm that this date is correct.

We would stress that if you are able to make the payment by 31st July 2020 then you can do so. If possible you may want to do this, or to pay as soon as you are able, to help smooth out your tax cash flow since we do not expect any deferment of the payments normally due on 31st January 2021 and 31st July 2021.

We would also stress that you still need to submit your Self Assessment Tax Return on time!

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 19th June

1. End of VAT Deferral Period

2. Furlough & Self-employed Income Support Mis-claims Investigations

VAT Deferral Period Ending

As you'll be aware, certainly if you read our previous newsletters, one of the support measures introduced by HMRC was to allow VAT-registered businesses to defer VAT payments due between 20th March 2020 and 30th June 2020 until up to 31st March 2021. As the deferral period ends on 30th June VAT payments due after that date must be paid as normal. This means you will need to:

  • set-up any cancelled direct debits in sufficient time to allow HMRC to take any payments due (this means at least 3 working days before submitting the VAT return)
  • submit VAT returns as normal 
  • pay any VAT due in full

If you are unable to pay any VAT due then you should contact HMRC  as soon as possible to explore the time to pay options available. Please speak to us if you would like us to help you with this.

Furlough Mis-claims Investigations

There has been quite a lot in the media in relation to possible fraudulent claims being made by businesses under the Job Retention - or furloughing - Scheme. It has now been announced that HMRC is seeking to have fast-tracked legislation put in place to enable it to investigate claims made under the scheme to confirm that all grants have been paid correctly and that they have all been used to pay workers' wages. Any organisation caught deliberately defrauding the scheme would face a financial penalty and HMRC would be able to recoup overpaid grants through income tax assessments.

The draft legislation would allow employers a 30-day amnesty to notify HMRC if they believe they have been overpaid monies through the scheme or if they have not used the grants correctly, that is to pay their workers. The legislation would also give HMRC the same powers to recoup grants incorrectly paid under the Self-employed Income Support Scheme. The legislation also includes powers to allow HMRC to pursue company office holders where businesses become insolvent.

If you believe that you may have been overpaid under either the Job Retention or Self-employed Income Support Schemes or that the money you received was not used correctly to pay your workers' wages then please let us know as a matter of urgency and we can help you to address the position with HMRC. It is important to appreciate this doesn’t just apply to deliberate fraud but also to incorrect grant claims so if you believe that an amount claimed was incorrect for whatever reason please let us know. This applies to claims which we filed for you or for any claim(s) which you may have filed yourself.

Once we have more information on the legislation we will let you know.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 15th June

The Coronavirus Job Retention Scheme ("CJRS") is changing from 1st July.

We thought we'd remind  and update you on the key points:

  • the last day that a furlough claim can be submitted for any period ending on or before 30th June is 31st July
  • no claims for periods beginning 1st July onward can be submitted before 1st July
  • from 1st July furloughed workers can be brought back on a part-time basis, for any amount of time and any shift pattern and their employer can claim a CJRS grant for the hours not worked
  • from 1st August the government will continue to pay 80% of wages up to a maximum of £2500/mth for the hours a worker is on furlough but employers will be required to pay the ER NICs and employers' pension contributions
  • from 1st September the government will cover 70% of wages to a monthly cap of £2187.50 for the time the employee is on furlough with employers requried to pay ER NICs, employers' pension contributions and top-up employees' wages to ensure they receive at least 80% of their wages, to a cap of £2500/mth for the time furloughed 
  • from 1st October the government will cover 60% of wages to a monthly cap of £1875 for the time the employee is on furlough with employers requried to pay ER NICs, employers' pension contributions and top-up employees' wages to ensure they receive at least 80% of their wages, to a cap of £2500/mth for the time furloughed
  • for hours worked the employees should be paid at their normal agreed rates

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 8th June 2020

Job Retention Scheme Cut-off - 10th June

The Coronavirus Job Retention Scheme will close to anyone who hasn't been furloughed for 3 weeks by 30th June 2020.  

After that date employers can only claim for employees if they have been furloughed for a full 3 week period at some point before the end of June.

Employers will then have up until 31st July 2020 to make claims for any periods of furlough up to 30th June 2020.

For furlough periods starting on or after 1st July 2020 an employer cannot include more people within a claim than they have previously claimed for. So, for example if the most employees claimed for in any previous period is 5 then no more than 5 employees can be included within any claim made from 1st July 2020.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 1st June 2020

Changes to the Job Retention Scheme from July

You may have seen that the Chancellor has announced changes to the Coronavirus Job Retention Scheme (CJRS). This update seeks to clarify those changes and the timescales over which they will be implemented.

The key points announced were:

  • from 1st July 2020 furloughed employees can be brought back part-time. This is one month earlier than was previously announced
  • from August 2020 the level of grant provided by the government will be tapered off
  • the scheme will close to new entrants on 30th June 2020 with the last 3 week furloughs before then commencing on 10th June. Claims from 1st July onwards will be restricted to employers currently using the scheme and to previously furloughed employees 
  • the scheme will finish on 31st October 2020


From 1st July employers can bring back workers on a part-time/flexible basis, deciding the hours and work patterns their employees work so as to best suit the employees and business needs. Employers will be responsible for paying their employees for all hours worked (at normal, contracted rates) but will still be able to claim back 80% of pay for furloughed hours in July. Claims can be made for a minimum period of 1 week. Employers will be expected to report the hours worked in the claim period  together with the usual hours the employee(s) would be expected to work in that period. To be eligible for the grant employers must agree any new flexible furloughing arrangement with their employees and confirm it in writing

In August employers will be required to pay all NICs and employer pension contributions and in September the government will pay 70% of wages up to a cap of £2187.50/mth with the remaining 10% being paid by employers to maintain the 80% minimum pay up to a cap of £2500/mth. In October there will be a further 10% reduction in the government grant up to a cap of £1875/mth meaning that employers will need to contribute 20% of salary to give their employees 80% of pay up to the cap of £2500/mth.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 20th May 2020

Self-employment Income Support Scheme is Open

We advised you a short time ago about the Self-employment Income Support Scheme (SEISS) designed to provide grants to self-employed workers who are ineligible for other support schemes such as the Job Retention Scheme.

We advised in our previous update (see below: Update 27th March 2020) on the basic eligibility criteria and benefits of the scheme but HMRC have opened the scheme ahead of schedule and claims can now be filed so we thought we would address some of the early points to come out of the process as follows:

  • eligibility is determined by HMRC firstly from your 2018-2019 tax return and if you are not eligible based on that they will then look at your 2016-2017 and 2017-2018 returns (if present) and average out the figures
  • to be eligible your trading profits must be no more than £50000 and at least equal to your non-trading income
  • potential claimants can check eligibility to claim by going to the gov.uk website. You will need your Unique Taxpayer Reference (UTR) number and your NI number
  • to make the claim you must have your own Government Gateway user account - if you don't already have one you can create one when you check your eligibility 
  • if you're eligible to claim HMRC will tell you the date you can claim from and you will be asked to add your contact details
  • only the claimant can make the claim. We cannot do it for you, though of course we will be happy to provide help and assistance in making a claim
  • the grant is capped at £2500/mth and will be based on your average monthly trading profit across the calculation period
  • if your claim for a grant is refused then you can ask HMRC to review your eligibility

If you are not eligible to claim a grant through the SEISS then other help may still be available:

  • deferral of self-assessment income tax and VAT payments
  • Business Interruption Loan Scheme
  • Bounce Back Loan
  • grants for businesses that pay little or no business rates

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 19th May 2020

SSP Rebate Scheme Goes Live From 26th May

HMRC have  announced that businesses will be able to apply to recover the costs of coronavirus-related SSP paid to current or former employees for eligible periods of sickness starting on or after 13th March 2020 via an online service open from 26th May 2020.

Key points of the scheme include:

  • repayment will cover up to 2 weeks starting from the first qualifying day of sickness if an employee cannot work because they either:
    • have Covid-19 symptoms
    • can't work because they are self-isolating because someone they live with has symptoms
    • are shielding and have a letter from their GP or the NHS telling them to stay at home for at least 12 weeks
  • claims can be made for periods of sickness starting on or after:
    • 13th March 2020 for employees who had the virus or symptoms or who are self-isolating because they live with someone with symptoms
    • 16th April 2020 for employees who are shielding
  • the scheme is eligible to employers who had a PAYE payroll scheme created and started on or before 28th February 2020 and had fewer than 250 employees on 28th February 2020
  • employers can claim under both the Job Retention Scheme and the SSP Rebate Scheme but not for the same employee for the same time period
  • the scheme covers all types of employment contracts including part-time, zero hours and agency contracts
  • where an employer pays more than the statutory minimum SSP they can only claim back the SSP rate
  • employers must keep records of all SSP paid that they want to claim back from HMRC. These must be kept for at least 3 years after a claim is paid and should include:
    • dates the employee was off sick
    • which of those dates were qualifying days
    • reason for absence - if they had symptoms, someone they lived with had symptoms or they were shielding
    • the employee's NI number


As and when any more information is provided regarding the claim process we will let you know.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 13th May 2020

More changes to Job Retention Scheme

The Chancellor has announced further changes to the Coronavirus Job Retention Scheme. The primary changes are as follows:

  • the scheme is extended by 4 months until the end of October 
  • workers will continue to receive 80% of their current salary up to £2500/mth
  • from 1st August more flexibility will be introduced with furloughed workers being allowed to return to work part-time and employers being asked to pay a percentage towards salaries
  • furloughed workers who wish to undertake additional training or learn new skills will also be supported from August onward

More details of the new features will be announced towards the end of May and a further bulletin will be issued with those details at that time.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 15th April 2020

Amendment to Job Retention Scheme (furloughing)

HMRC have today announced that the date from which employees may be eligible to be furloughed has been extended.

When the Coronavirus Job Retention Scheme (CJRS) was first announced only employees who were on the PAYE payroll as at 28th February 2020 could be considered for furloughing.

This date has now been extended to cover employees who were on the PAYE payroll as at 19th March 2020 meaning that more employees may now be eligible for the scheme.

For more information, support and advice in relation to the measures available to support businesses contact us on 01942 760500 or e-mail info@hulljady.co.uk

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Update 6th April 2020

Further Details of Job Retention Scheme Announced

The government has provided further information in relation to the Coronavirus Job Retention Scheme (CJRS) in response to the most commonly raised queries. The full update can be found here: https://www.gov.uk/guidance/cl...

Some key points are:

  • *to make a claim an employer must have enrolled for PAYE online*
  • directors are able to be furloughed
  • employees must be furloughed for a minimum period of 3 weeks at a time
  • employers must confirm in writing to their employees that they have been furloughed and a record of this communication must be kept for 5 years
  • some classes of individual who are not employees may be eligible. These include:
    • office holders (including company directors)
    • salaried members of Limited Liability Partnerships (LLPs)
    • agency workers (including those employed by umbrella companies)
    • limb (b) workers
  • normal rules apply for employees on maternity leave, paternity leave, adoption leave or shared parental leave
  • Employees still have the same rights at work, including:
    • Statutory Sick Pay
    • maternity and other parental rights
    • rights against unfair dismissal
    • redundancy payments
  • Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed
  • HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account
  • You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted

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

Tax Treatment of the Coronavirus Job Retention Grant

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.

If you require further advice or assistance in relation to this or any of the other business support schemes set up by the government in response to the coronavirus crisis please contact us on 01942 760500 or info@hulljady.co.uk

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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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Next Blog

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.

Next

Next

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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