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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.  Furloughed workers should not undertake any work for the company including answering calls or emails.

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.

If your contract allows, you may undertake other employment while your current employer has placed you on furlough, and this will not affect the grant that they can claim under the scheme. You will need to be able to return to work for the employer that has placed you on furlough if they decide to stop furloughing you, and you must be able to undertake any training they require while on furlough. If you take on new employment, you should ensure you complete the starter checklist (https://www.gov.uk/government/publications/paye-starter-checklist) form with your new employer correctly. If you are furloughed from another employment, you should complete Statement C. Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.

It’s normal practice in countries such as the US, that already have the status of furloughed worker, for benefits like health and life cover to continue while an employee is furloughed. However, in our view the Job Retention Scheme should be implemented in such a way that these do not impact on the flow of the 80% from the government via the employer to the employees.

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.

It will be paid in June 2020 to those that are eligible directly into their bank account.

It will be paid in June 2020 to those that are eligible sole traders and members of partnerships.direct into their bank account. The taxable cash grant will be in the form of a single lump sum to cover the three months from March to May 2020. The self-employed individuals 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 came 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. HMRC’s guidance does state that the 18/19 tax return must be filed by 23 April 2020 in order to be eligible.

Additional eligibility criteria include the requirement that the individual must have lost trading profits due to Covid-19 Coronavirus 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.

You are advised not to contact HMRC now. 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.

Statutory Sick Pay for Individual

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-2020. They will still be entitled to the normal maximum of 28 weeks in any 3-year period with the same employer, however, unlike normal sickness there is no need to wait for 3 working days before they would be eligible where Covid19 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 their intention is that no one can be evicted from their home over the next 3 months where this applies.

If you have any further queries regarding the above or you wish to speak to one of our advisors regarding this please email your query to us or call on 011-448 7658.

Income Tax

The 2nd 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. No penalties or interest for late payment will apply during this deferral period

Companes 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. 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.

Business Interruption Loan Scheme

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 accredited finance providers (See the enclose schedule) as soon as possible, to discuss your business plan.

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

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 be £10,000.

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 business rates bill in April 2020 meaning that there would be no rates payable for those businesses for 2020/2021