COVID-19 Update

Following our previous emails, further measures and more detailed guidance has been announced to support businesses throughout this period of disruption caused by COVID-19.  

Please be aware that this is an evolving situation with additional information being released daily and we will continue to update you as further guidance is released as best we can.

CORONAVIRUS JOB RETENTION SCHEME

Further guidance on how the scheme will operate has been released as follows:

  • All UK businesses are eligible and the scheme will operate from 1 March 2020 to 31 May 2020.
  • HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
  • Furloughed employees must have been on your PAYE payroll on 28 February 2020.
  • Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme. 
  • The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
  • While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
  • When on furlough, an employee can not undertake work for or on behalf of the organisation.
  • Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.
  • The employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.
  • Furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.
  • HMRC anticipate the online portal will be available by the end of April to make the claim.
  • As an employer you will need to designate affected employees as “Furloughed Workers” and notify employees of this change. Changing employee status remains subject to existing employment contract law, therefore advice should continue to be sought regarding this.

 To find out more click here.

SELF EMPLOYMENT INCOME SUPPORT SCHEME

The scheme provides a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for an initial period of 3 months.

You can apply if you are a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19
  • Your self-employed trading profits must also be less than £50,000 and must provide the majority of your income.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and as a concession for those not filed, an extension to 23 April has been provided.

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable)

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

HMRC will contact you if you are eligible and invite you to apply online.  The online portal is expected to be ready by the end of June 2020.

To find out more click here.

DEFERRING OF PAYMENT ON ACCOUNT DUE 31 JULY 2020

If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

If you are self employed, you are eligible and this is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

DEFERRING OF VAT PAYMENTS

Valued Added Tax (VAT) payments have been deferred for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020 and all UK businesses are eligible.

No applications are required, businesses will not need to make a VAT payment during this period.

This is a measure to support your business cashflow, please note this is a deferral scheme only and outstanding liabilities will be due for payment by 31 March 2021.

VAT Refunds will continue to be paid from HMRC as normal.

VAT Returns should continue to be filed throughout this period, and to take advantage of this cashflow benefit you must cancel any VAT direct debits in place for this period, as these payments may be taken automatically if the payment facility remains.

CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

These are government backed loans (up to 80%) to support lenders in supporting their business customers. The scheme was released the week commencing 23 March 2020 and is available via your business bank provider. A link below shows those banks operating within this scheme:

To find out more click here.

HMRC TIME TO PAY SCHEME

We understand that the “Time to Pay Offer” team have been scaled up at HMRC in a bid to support those in temporary distress as a result of COVID-19 and have outstanding tax liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, HMRC’s dedicated helpline is 0800 0159 559.

ADDITIONAL RESOURCES

HMRC Guidance and Response

https://www.gov.uk/coronavirus

Croner Tax Wise HR Helpline: 0844 892 2807

ACAS

Acas gives employees and employers free, impartial advice on workplace rights, rules and best practice:

https://www.acas.org.uk/

We appreciate that this is a difficult time for us all, and we will continue to provide further guidance as available. 

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