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Coronavirus website message – updated 8 June 2020

Dear Clients,

We have all now been working for some time within the new reality of a world with coronavirus, but our priority continues to be the safety and well-being of our clients and colleagues. We can assure you that we are following government guidance and precautions, so that we remain open for business, but we are replacing face to face meetings with telephone or video meetings and working from home wherever possible. You can still contact us by telephone, email or by using our Tally Exchange secure portal to exchange information.

Understandably, we are receiving unprecedented levels of calls because of the concern being generated, and the difficulty in finding answers to many questions. We are here to help you to find reliable sources of information so that you can make your own informed decisions about your business. We will be keeping this page updated for any significant announcements affecting business.

But please call us if you need to talk to us.

Business closures

The government originally issued guidance on which businesses should shut to help reduce the risk of spreading Coronavirus, and has now updated this to include guidance for businesses that may be able to re-open safely. This guidance can be found here:

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/shops-and-branches

The government is currently working on a “road map” to gradually allow more businesses to open, and this will be announced on the gov.uk website and through the media.

Coronavirus job retention scheme

Government grants of 80% of payroll costs of PAYE employees (subject to a cap of £2,500 per month) will be paid to any employer in the UK and Northern Ireland, backdated to 1 March 2020, for workers on the payroll at 29 February. The scheme is open and will continue in its current form until the end of July. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June. Also, the level of government support will be scaled back from August onwards.

The final date by which an employer needs to agree with their employee and ensure they place them on furlough is 10 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

 To claim under this scheme employers need to:

  • identify “furloughed workers” who would otherwise have been laid off or made redundant, because they have no work. This would not include employees on short-time working;
  • submit information to HMRC about the furloughed employees and their earnings through a new online portal.

Directors who are company owners are eligible to receive a grant in the same way as other employees, if they too have no work. This will be based on salary, not dividends. Employers must pay their staff through the payroll, using the Real Time Information (RTI) system in the usual way, before making a claim. The claim will be based on salary at 29 February or, where pay is variable, the claim will be based on the higher of either:

  • the same month’s earning from the previous year
  • average monthly earnings from the 2019-20 tax year.

Only the minimum employer pension contributions under auto-enrolment will be taken into account in the grant claim calculation. The minimum period for furlough is 3 weeks, and only one claim per three weeks can be made.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked. When claiming the grant for furloughed hours employers will need to report and claim for a minimum period of a week.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

The information about the current scheme is here:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

More information on how the Coronavirus Job Retention Scheme is changing can be found here:

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps 

Coronavirus job retention scheme – The HMRC Portal

The HMRC Portal opened on 20 April 2020 and the first payments were received by businesses from 30 April 2020.

Applications must be made through the Portal, although there is a phone  number to call for those who are digitally excluded. The latest guidance on how and what to claim is here:

https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

 Agents who are authorised to act on behalf of clients for PAYE matters, will be able to claim.  However, ‘file-only’ agents, including Payroll Bureaus, will not be able access the service for data protection reasons. File-only agents are still likely to be involved indirectly as employers may need to ask for information held by the agent to make their claim.  Businesses will need the following information for each of their furloughed employees:

  • National Insurance number (NINO).
  • Salary, National Insurance and pension contribution information that allows business to calculate the claim amount.

HMRC will also need the following for the employer:

  • The bank account number and sort code for HMRC to use when they pay the claim.
  • The name and phone number of the person in the business for HMRC to call with any questions.
  • Depending on the type of business: Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).

Employment law aspects of the job retention scheme

The government have pointed out that employers still need to follow employment law when dealing with the issues of lay-offs and redundancies. The furlough must be agreed with staff. The worker remains employed while they are “furloughed” (and continue to accrue holiday and be protected under employment law) but not perform any work. Their contract of employment may mean that in normal circumstances they are entitled to full pay, so the employer will still have to pay the additional amount over 80%. Some contracts may have a “lay-off clause” so this needs to be looked at. However, as the alternative to furlough leave is probably redundancy, employers may choose not to supplement the government’s payment.

There are some difficulties to consider, for example choosing between short-time working where there is less work for all employees rather than laying off employees and using the job retention scheme. This is an area where specialist employment law advice is required, so please speak to your usual legal or HR adviser (our associate Sue Green’s details are given below) or use this link to ACAS:

https://www.acas.org.uk/coronavirus/if-the-employer-needs-to-close-the-workplace

Help for the self employed

Some self-employed individuals, either sole traders or members of a partnership, can benefit from the Self-employed Income Support Scheme (SEISS). A brief overview:

  • The self-employed are eligible for a payment equal to 80% of their monthly profits, capped at £2,500, for three months;
  • Only those with trading profit of less than £50,000 in 2018-19 or on average over the previous three years will be eligible;
  • The payment will be based on their average monthly profits over the last three financial years;
  • There is an additional requirement that most of their income must come from their self-employment;
  • This is available to currently registered businesses who have a self-assessment tax return for 2018/19. If they have not submitted their 2018/19 return yet, they have four weeks to do so. 

The grant payment will be made as a lump sum covering the three months to May 2020 inclusive. HMRC calculate the amount and invite applications from those they consider eligible. It is expected that the self-employed will have to wait until June for payments to start.

There will be another opportunity to make a claim in August 2020. For those who are eligible the second and final grant will be a taxable grant worth 70% of average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

Although claimants must make their own claim online, we as agents can check your eligibility to claim. In addition you do not have to work out the amount of the claim; this is done by HMRC.

For those self-employed people who do not benefit from the measures outlined above, a claim can be made for Universal Credit. This can also lead to a discount in Council Tax.

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

Loan schemes for Small and Medium-sized businesses

The Coronavirus Business Interruption Loan Scheme provides loans of up to £5million to UK businesses with an annual turnover of up to £45million who are adversely impacted by the pandemic. More detail is available through this link:

https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme

Alternatively the Coronavirus Bounce Back Loan Scheme provides up to £50,000 to small and medium-sized businesses, as follows:

https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

Loans are welcome in the short time but at some point need to be repaid. If you intend to apply for a loan, it is just as important as ever to have a carefully prepared business plan and means of repayment. 

Other Government support for businesses

The other main measures so far are:

  • Refund of up to 2 weeks’ SSP due to coronavirus for employers with fewer than 250 employees. This claim can now be made online from 26 May by you or your tax agent;
  • Business rates holiday for retail, hospitality and leisure businesses for the 2020/21 tax year, and a £25,000 grant per property for those in these sectors whose premises have a rateable value between £15,000 and £51,000. Local authorities contact eligible businesses;
  • A one-off grant of £10,000 to any businesses currently entitled to Small Business Rate or Rural Relief; as above, local authorities contact eligible businesses;
  • For large businesses: Loans of up to £50million under the Coronavirus Large Business Interruption Loan Scheme;
  • Corporate financing facility: The Bank of England has set up a scheme to finance working capital by purchasing commercial paper from larger businesses “making a material contribution to the UK economy”;
  • Insurance: the government and insurance industry have clarified who should be able to make a claim for business interruption loss.
  • Self-employed people will receive universal credit at a rate equivalent to SSP.
  • A £617million fund aimed at small businesses with ongoing fixed property-related costs. Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.

Follow this link for full details that are currently available.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses 

Help with Tax Payments

  1. VAT payments

VAT payments that are due between 20 March 2020 and 30 June 2020 may be deferred until 31 March 2021. If you normally pay by Direct Debit you will need to cancel this or HMRC may automatically collect your payment.

  1. Income Tax Payments

Income tax payments due on 31 July 2020 under Self-Assessment can be deferred to 31 January 2021.

  1. HMRC “Time to Pay”

For businesses and the self-employed worried about being able to pay outstanding tax liabilities, there is a dedicated HMRC helpline: 0800 0159 559.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

  • agreeing an instalment arrangement;
  • suspending debt collection proceedings;
  • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.  The helpline will not be available on Bank Holidays.

As for any loan, please remember that these measures are deferrals, not cancellations, and ultimately these liabilities will still be due.

Employment issues and working practices

Our associate Sue Green of Evergreen HR has issued some useful Q and A’s for employers which you can access here:

http://evergreenhr.co.uk/blog/coronavirus-key-things-you-need-to-know

Or contact Sue for tailored HR advice:

Mobile: 07951 356700
Email: sue@evergreenhr.co.uk
Website: evergreenhr.co.uk
Twitter: Sue_Evergreenhr

Working from home and associated cyber and insurance issues

Sadly, our contacts within the UK 200 group and their associate CFC Underwriting Limited are advising us that cyber criminals are using Coronavirus as a way in to make more attempts at phishing, hacking and other cyber crime. The National Cyber Security Centre has issued an alert on the increase in phishing attacks. When employees are at home they can be more prone to this type of attack, so please ensure your employees remind themselves of best practice and do not open your (or their) systems to hackers:

https://www.cfcunderwriting.com/resources/advisories/2020/03/client-advisory-cybercriminals-exploiting-coronavirus/

Now is the time to check your insurance cover is adequate, e.g. for use of equipment at employees’ homes and employers’ liability. Does your policy include event cancellation cover which you may be able to claim on?

Remember employers are still responsible for employees’ health and safety when they are working from home. A health & safety questionnaire may be useful in creating an audit trail to show that you have adopted reasonable measures to ensure staff safety while working from the home environment.

Filing accounts at Companies House

As of 25 March, if your accounts will be late because your company is affected by COVID-19, you can apply for an automatic and immediate 3 month extension to file your accounts.

https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

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