Coronavirus (COVID-19) Updates

Over the past 6 months we have endured drastic health and economic turmoil and unfortunately the ‘end’ doesn’t seem any more nearer. In contrast to Covid-19 prevention measures that seem to be changing daily the government have packaged what would be the next stage of support. We have summarised the key points in light of the more recent tier system lockdown restrictions.

JOB SUPPORT SCHEME

The Chancellor confirmed that the furlough scheme is ending on 31 October as originally planned and will be replaced by the Job Support Scheme for 6 months starting 1 November 2020.

The headlines are:

• An employee needs to work at least 33% of normal hours. The employer pays for these hours.
• Of the remaining 67% of normal pay, the employer pays 33% and the government pays 33%, which is equivalent to 22% of 100% each.
• So, where an employee works 33% of normal hours, the employer funds 55% of normal pay and the government funds 22%. The employee will receive 77% of normal pay, and forego 23%.
• If an employee works more than 33% of normal hours, the above figures change proportionately (see the examples at the end of this link).
• The level of government subsidy is capped at £697.92 per month.
• The scheme is open to businesses even if they didn’t previously use the furlough scheme.

Expansion to the scheme for businesses that are legally required to close as a direct result of Coronavirus restrictions imposed by the government

• The government will pay a grant of two-thirds of the normal pay of each eligible employee (up to a limit of £2,100 per month).
• Unlike the above JSS employers will not be required to contribute to the cost of employees’ salaries. However, employers will be required to cover employer National Insurance Contributions and automatic enrolment pension contributions, where applicable.
• Employees must cease work for a minimum of seven consecutive days.
• Employees must be employed, and an RTI submission made in respect of them, on or before 23 September 2020.

SELF EMPLOYMENT INCOME SUPPORT SCHEME (SEISS)

There is a further three months extension to this scheme from 1 November 2020 to 31 January 2021.

The headlines are:

• To be eligible you have to have been eligible for the previous (second phase) of the SEISS grant.
• The claimant must be actively trading but experiencing continuing reduced demand due to coronavirus.
• The grant will be worth 20% of average monthly profits up to a total of £1,875

TOURISM AND HOSPITALITY VAT
The current VAT reduction from 20% to 5% is being extended until the end of March 2021.

VAT DEFERRAL AND THE NEW PAYMENT SCHEME
Businesses who deferred the VAT payment due for the quarter ended February/March/April 2020 and who are due to pay the deferred amount in March 2021 will be able to apply under the New Payment Scheme to pay the amount due by 11 interest free monthly instalments.

SELF-ASSESSMENT TAX DEFERRAL AND THE NEW PAYMENT SCHEME
The self-employed, and other self-assessment income tax payers, will be given more time to pay the tax due in January 2021.
Providing the amount due is less than £30,000, taxpayers will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months

PAY AS YOU GROW
The Bounce Back Loan (BBS) and Coronavirus Business Interruption Loan Scheme (CBILS) were initially set with a payback period of six years. This is being extended to ten years.

The Local Restrictions Support Grant (LRSG)

Supports businesses that have been required to close due to temporary COVID-19 local lockdown restrictions imposed by the government.

Eligibility

• occupies property on which it pays business rates
• is in a local lockdown area and has been required to close because of the formal publication of local restrictions guidance that resulted in a first full day of closure on or after 9 September. This funding is not retrospective
• has been required to close for at least 2 weeks because of the lockdown

What you get

• If your business is eligible and has a property you will receive a cash grant of up to £3,000 each month based on property rateable value
• Properties with a rateable value of £15,000 or under will receive grants of £667 per two weeks of closure (£1,334 per month).
• Properties with a rateable value of over £15,000 and less than £51,000 will receive grants of £1,000 per two weeks of closure (£2,000 per month).
• Properties with an rateable value of £51,000 or over will receive grants of £1500 per two weeks of closure (£3,000 per month).

Hi

A further update following the mini summer budget earlier this month.

1. If you are an employer and you bring someone back who has been furloughed, and you continue to employ them until January 2021, the government will pay you a £1000 bonus. This is conditional on the employee being paid at least £520 per month in November and December.
2. If you are an employer and create new jobs and employ a Kickstarter (Age 16-24), the government will pay six months’ salary (25 hours @ minimum wage), Employers will be able to apply from next month, with the first Kickstarters in jobs in the autumn.
3. If you are an employer and employ apprentices, the government will pay £2,000 (for under 25s) and £1500 (for over 25s).
4. If you are an employer and employ trainees, the government will pay £1,000 (for under 25s) and £1500 (for over 25s).
5. The Stamp Duty threshold has been increased to £500,000 from £125,000 This is a temporary cut until 31 March 2021 and will take effect immediately.
6. VAT has been reduced from 20% to 5% from next Wednesday 15th July 2020 to 12th January 2021 for the Hospitality sector (food, accommodation, and attractions).
7. Government discount during August, everyone gets “Eat out to help out”, Mon to Wed – 50% off, up to max discount £10 per person. The government has opened a website where business can register for the scheme online, with the funds they claim back paid within five working days.

Dear All

Trust you are keeping well

Small and micro businesses with property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme. Eligible businesses can receive a grant of £25,000, £10,000 or any amount under £10,000.

The grant application process is open for a limited time, each council will have their own processes – Birmingham City Council application closes midday on June 15, 2020.

Applications are to be made via your local council’s website.

Eligibility

You may be eligible if your business:

• has relatively high ongoing fixed property-related costs
• occupies property (or part of a property) with a rateable value or annual mortgage/rent payments below £51,000
• Was trading on March 11, 2020
• You will need to show that your business has suffered a significant fall in income due to coronavirus.

You cannot apply if you’re already claiming under another Government grant scheme, such as:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• Fisheries Response Fund
• Domestic Seafood Supply Scheme
• Zoos Support Fund
• Dairy Hardship Fund

Priority will be given to:

• Small businesses in shared offices or other flexible workspaces, such as units in industrial parks or business incubators
• Regular market traders
• Bed and breakfasts paying council tax instead of business rates
• Charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief

Coronavirus (COVID-19) & ‘Bounce back loan’

Dear all

Trust you are keeping well and safe.

The Chancellor has announced a 100% government backed loan scheme for small businesses, designed to offer up to £50,000 of fast-track finance for those affected by coronavirus.

The bounce back loans scheme will enable businesses to borrow between £2,000 and £50,000 and access the cash within days, and in some cases within 24 hours.

Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple two-page standardised application form. There are no forward-looking business viability tests or eligibility criteria for the finance.

The government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months.

The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.

Coronavirus (COVID-19) & Cash Grants

Dear All

Trust you are keeping well and safe.

Following the announcement of ‘Cash Grants’ for businesses, majority of councils have now written out to eligible businesses, informing them to make an online submission of information. Each council has its own portal and set of questions that they require in order to process the claim. If you have received a letter, you will need follow the instructions as per the letter to submit your claim. If you have not received a letter you may still be eligible to make a claim, considering you meet the general requirements. You should visit your local councils website and follow links to Corona Virus information / support.

In most cases, you will require your Rates reference, which can be found on your rates bill and also your business bank account details. For some councils, you may be required to provide a copy of your lease and bank statements.

If you require assistance in making the application you may contact us.

Self-employment Income Support Scheme

On Thursday 26 March the government announced their intention to provide further support for the self-employed in the form of a taxable cash grant.

The scheme allows individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the 3 months from March to May 2020. This may be extended if needed.

The taxable cash grant will be in the form of a single lump sum to cover the three months from March to May 2020. It will be paid in June 2020 to those that are eligible directly into their bank account.

The self-employed including members of Partnerships will be eligible if their trading profits for 18/19 were less than £50,000 and more than 50% of their income stems from self-employment.

Alternatively, they will be eligible if their average trading profits for the tax years 16/17, 17/18 and 18/19 were less than £50,000 and more than 50% of their income stems from self-employment. For those that started trading between 2016-19 HMRC will only use those years for which a Self-Assessment tax return has been filed.

The scheme will be open to those that have submitted an income tax self-assessment tax return for the year to 5 April 2019 (the 18/19 tax year). Worth noting that HMRC’s guidance does state that the 18/19 tax return must be filed by 23 April 2020 in order to eligible! For those that have yet to file their 18/19 tax return, it represents something of an opportunity.

Additional eligibility criteria include the requirement that the individual must have lost trading profits due to Covid-19 and they must have traded in 2019/2020, intend to trade in 2020/2021 and are trading at the point of application or would have been except for Covid-19.

Individuals that claim Tax Credits would need to include the grant as part of their income.

It is crucial to observe that HMRC will contact and invite those that are eligible to apply. Applications will need to be made online when the invitations have been issued by HMRC.

Individuals do not need to contact HMRC now.

This seems an opportune moment to remind readers that HMRC does not send texts or make calls asking for bank or credit card details. If this happens then it is likely to be a scam. Please be wary.

We will update this guidance as and when HMRC issue further guidance of their own.

Dear All

Trust you are keeping well and safe. Please take all necessary precautions and comply with government advice.

There has been numerous queries raised in relation to furloughed employees and rightly so as the precise details are yet to be released. To summaries in detail the information made available kindly see below.

Coronavirus Job Retention Scheme

HMRC will set up a new online portal so that ALL UK employers, regardless of size, will be eligible for assistance where an employee has been designated as a ‘furloughed worker.’ HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. The current plan is that this will be in place for 3 months, at which point it will be reviewed. Employers must set out which of their employees are ‘furloughed workers’ and inform the particular employees.

The current guidance states ‘You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to’

Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

When will it apply?

This will be backdated for wages from 1 March 2020 although it will be some weeks before payments under this scheme are made to employers.

When will it end?

The scheme is in place for 3 months at present and it will be reviewed as and when that becomes necessary.

How will an employer apply for the reimbursement?

The details are yet to be released.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

It is worth noting that employers may wish to consider this new loan facility which provides loans of up to £5m being accompanied with no interest charges for the first 12 months. Employers may consider the possibility of using this money to ease immediate cash-flow issues in order to furlough employees. The aim being to pay it back within 12 months when they are reimbursed under the Job Retention Scheme.

Does it apply to all employers?

It applies to all UK businesses, regardless of their size. This applies to charitable and not for profit businesses too.

This is a grant which employers do not have to pay back.

What is a ‘furloughed’ employee?

The word furlough generally means a temporary leave of absence from work.

A furloughed employee is someone who rather than being dismissed for redundancy by their employer, is kept on the payroll during a period where the employer does not have any work for the employee.

There is an employment law aspect to this. Employers will need to consult and agree with each employee that they are being furloughed.

Can an employee work for an employer whilst they are furloughed?

To qualify for the scheme, employees must not undertake work for the employer while furloughed.

What will be covered?

The guidance refers to earnings and wages costs. It is not clear what is meant by ‘wages.’ Details of how and if bonuses and benefits will be taken into consideration have yet to be released.

HMRC has confirmed that ‘individuals will pay income tax and national insurance contributions (NICs) on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income’.

There is currently no guidance as to whether it includes employer pension and national insurance contributions.

What if the employee is on SSP already?

It is not clear to what extent employers will be able to furlough employees who are currently on SSP.

Does it apply to all employees?

It is unclear to what extent this can apply to a director and personal service companies.

The 80% wage guarantee will not cover Zero-hour contracts or casual workers unless they work on the PAYE system

The self-employed are not covered by this scheme.

Must an employer supplement employees’ salaries over the 80%?

No. Employers can if they wish to or if there is an employment contract in place which requires this.

For employees who have been furloughed employers can choose whether to:

Only make the salary payment (80%, capped at £2,500) reimbursed by the government.

Pay all of the difference between the grant and the employee’s normal salary.

Pay part of the difference between the grant and the employee’s normal salary.

Fraud and abuse

Protections will be in place to prevent abuse of the job retention scheme, HMRC stated: ‘Government will retain the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims.’

THIS SUMMARY IS SUBJECT TO CHANGE AT SHORT NOTICE AS THE GOVERNMENT RELEASES ITS OWN UPDATES

At this stage, until the full legislation around this scheme is released, we are unable to fully answer some of the more technical questions around this new facility. Further updates will be made in due course.

Dear All

Trust you are keeping well and taking all necessary precautions.

We have detailed below update of information in support of businesses and individuals announced by the government.

Support for Businesses

Coronavirus Job Retention Scheme

HMRC will set up a new online portal so that ALL UK employers, regardless of size, will be eligible for assistance where an employee has been designated as a ‘furloughed worker.’ HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. The current plan is that this will be in place for 3 months, at which point it will be reviewed. This will be backdated to 1 March 2020.

Employers must set out which of their employees are ‘furloughed workers’ and inform particular employees.

Furlough is the equivalent of lay off. So you can lay off staff, continue to pay them and recover 80% of that cost up to £30k per annum.

The current guidance states ‘You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to’

Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

Deferment of VAT payments

VAT payments can be deferred for up to 3 months. Again, all UK businesses will be eligible and the scheme will run between 20 March 2020 and 30 June 2020. There is no need to apply for this scheme. Businesses will be given until the end of 2020/2021 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral.

We have been advised by HMRC that VAT returns are still due to be filed on time.

Time to Pay

Any business that pays tax to the UK government and has outstanding tax liabilities will be able to apply for their case to be reviewed by HMRC with a view to arranging a bespoke time to pay agreement. This applies to all businesses including the self-employed. HMRC has set up a dedicated helpline: 0800 0159 559.

Statutory Sick Pay

Employers will be able to reclaim up to 2 weeks of SSP payments per employee where those SSP payments related to Coronavirus. This applies to all UK employers with 250 employees or less as at 28 February 2020. The reclaim will not be via RTI, instead, HMRC will set up a new portal to facilitate this.

IR35 for the Private Sector

Changes to the IR35 off-payroll working rules in the private sector have been delayed by 12 months to April 2021.

Business Rates

HMRC will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year. No action is required and this will apply to your next council tax bill in April 2020 meaning that there would be no rates payable for those businesses for 2020/2021.

Cash Grants

The retail, hospitality and leisure sectors in England can also apply for a cash grant of up to £25,000 per property. For rateable values of under £15,000, they will receive £10,000. Between £15,001 and £51,000, they will receive a grant of £25,000. No action is required as local authorities will write to eligible businesses. Smaller businesses within the Small Business Rate Relief or Rural Rate Relief will of £10,000.

Business Interruption Loan Scheme – (Updated 23/03/2020 @ 12.32pm)

The British Business Bank will launch a scheme from the week commencing 23 March 2020 to support businesses with a turnover of no more than £45 million per year. The government will provide lenders with a guarantee of 80% on each loan. This applies for loans of up to £5m in value and for up to 6 years. No interest will be charged for the first 12 months.

The scheme is now open for applications as from Monday 23 March. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan.

The major high street banks are on this list of 40 providers. Gov.uk states that more information can be found on their websites.

Corporate Financing Facility – (Updated 23/03/2020 @ 2.26pm)

The Bank of England will shortly announce plans to buy short term debt from larger companies that are ‘fundamentally strong’. We are currently waiting for a definition of ‘fundamentally strong’.

However, on Monday 23 March the Bank of England updated their site to set out the eligibility criteria: https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facility

Companies House

If a company’s accounts are unlikely to be filed on time owing to being affected by Coronavirus then an application can be made to extend the period allowed for filing. Here is a link. If an application is not made and there is a late filing then the normal penalty regime would apply, so it is important to make the application ahead of the deadline.

Support for individuals

Income Tax

The 2^nd payment on account of tax that is due by 31 July 2020 will be deferred until 31 January 2021. Self-employed taxpayers are eligible for this deferment. There is no need to apply for this offer to apply. No penalties or interest for late payment will apply during this deferral period.

Statutory Sick Pay

Individuals will be eligible for SSP for the first day of absence if the absence is Covid-19 related. The individual will need to visit https://111.nhs.uk/ in order to obtain an isolation note in line with advice issued from Friday 20 March. They will still be entitled to the normal maximum of 28 weeks in any 3-year period with the same employer, however, there is no need to wait for 3 working days before they would be eligible where Covid-19 applies.

The self-employed will be eligible to make a claim for Universal Credit or new style Employment and Support Allowance. Self-employed people will receive a rate equivalent to SSP.

Mortgage and rent holiday

Tenants, as well as mortgage borrowers, can apply for a 3 month payment holiday. Interest will continue to be charged on any amount that they owe. The government has announced that they intention is that no one can be evicted from their home over the next 3 months where this applies.

Dear All

Trust you are keeping well during this unprecedented times.

We would like to take this opportunity to emphasise the need to take all necessary precautions and follow medical advice as this pandemic evolves.

As you will all be aware the impact of COVID-19 has created huge disruptions to businesses across all industries and the government are making announcements in ways they will be extending their support for businesses. In line with the announcements HMRC have dedicated a page on their website that will encompass these measures and provide guidance on how you will be supported.

For direct link to this page, click here.

A new HMRC helpline has been launched to help businesses concerned about paying their tax due to coronavirus (COVID-19). If you are concerned about paying your tax due to coronavirus, you can call HMRC’s helpline for help and advice: 0800 0159 559. For further details, click here.

Furthermore we would like to advise that our office is currently open as usual, however as a precautionary measure we are calling off all face to face meetings from Monday 23/03/2020 until further notice.

These are challenging times that no-one could have predicted. It is inevitable that we will all feel the impact of this and therefore we must look out for each other, our families and our staff. If we can help in any way please let us know.

Please keep safe.