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Coronavirus website message - 3 November 2020

Coronavirus website message - updated 3 November 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 have applied government guidance and precautions to make the office safe for our colleagues. This means that from 5 November there will be no face-to-face meetings in the office, only telephone or video meetings. You can still contact us by telephone, email or by using our Tally Exchange secure portal to exchange information. We will be picking up and sending post from the office and you can bring or collect documents during office hours, or post them through our letter box.

Coronavirus continues to cause difficulty and uncertainty for businesses and their owners. 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 and working safely

The government has ordered certain businesses and venues to close from 5 November. Details can be found here:

https://www.gov.uk/guidance/new-national-restrictions-from-5-november#businesses-and-venues

For those businesses which can stay open, there is guidance on how particular types of workplace can manage the risk of coronavirus in order to operate safely. This guidance can be found here:

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

Coronavirus job retention scheme (CJRS)

This scheme, which was due to finish on 30 October 2020, has been extended until December 2020. Broadly, you can now only claim if you have previously furloughed an employee before 30 June 2020 and have submitted a claim by 31 July 2020, and your claim cannot exceed the maximum number of employees included in any claim period up to 31 June 2020.

Further rules about making a claim are found here:

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

Since August, support under the CJRS had been scaled back (see below under Extension to Coronavirus job retention scheme). From November, Government grants will revert to 80% of salary of PAYE employees for hours not worked (subject to a cap of £2,500 per month). Employers will cover National Insurance and employer pension contributions.

To claim under this scheme employers needed 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.

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.

The information about the original scheme is here, but guidance for November is due to be issued shortly:

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

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/steps-to-take-before-calculating-your-claim-using-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 HMRCto 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).

Extension to Coronavirus job retention scheme

From 1 August 2020, the level of grant was reduced each month. Broadly, in August employers started to pay employers National Insurance and pension contributions for furloughed staff, then from September the government reduced their contribution towards furloughed pay to 70%, then 60% in October.

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/lay-offs-and-short-time-working

Job Support Scheme and Jobs Retention Bonus

The Job Support Scheme (JSS) was designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The Job Support Scheme was scheduled to start on 1 November 2020 and run for 6 months, but has been postponed until CJRS ends.

There is a differential between JSS Closed and JSS Open. JSS Closed only applies to businesses legally required to close. Each employee who cannot work as a result will receive two thirds of their normal pay, paid by their employer and fully funded by the Government, to a maximum of £2,083.33 per month.

JSS Open is for businesses that remain open but whose employees will be working fewer hours because of Coronavirus. The employee only needs to work at least 20% of their usual hours. For the hours not worked, the employer will only have to pay 5%, with the Government paying 61.67% of hours not worked up to a cap, meaning that the employee will receive at least 73% of their normal wages where the Government contribution has not been capped. Large employers (more than 250 employees) must pass a Financial Impact test to be eligible.

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria. The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021.

The current available details are accessed here:

https://www.gov.uk/guidance/check-if-you-can-claim-the-job-support-scheme

Business Grants

This applies to a business which:

  • occupies property on which it pays business rates;
  • has been required to close because of local or national restrictions.

Eligible businesses with a property with a rateable value of more than £51,000 will receive a cash grant of £3,000 per month, or £1,500 for each 2-week period that the business is closed.

Eligible businesses with a property with a rateable value between £15,000 and £51,000 will receive a grant of £2,000 per month, or £1,000 for each 2-week period.

Eligible businesses with a property with a rateable value of less than £15,000 will receive a cash grant of £1,334 per month, or £667 for each 2-week period that the business is closed.

https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-local-restrictions-support-grant

Other businesses may be eligible for a grant at the discretion of the local council.

Help for the self employed

The Self-Employed Income Support Scheme (SEISS) has been extended and the level of support increased. The background to the scheme is as follows:

  • The self-employed were originally eligible for a payment equal to 80% of their monthly profits, capped at £2,500, for the three months to May 2020 inclusive;
  • 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 was 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 was available to currently registered businesses who have a self-assessment tax return for 2018/19.

There was another opportunity to make a claim in August 2020. For those eligible the second grant was 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.

An extension of the scheme was announced on 24 September, and on 22 October and 2 November further changes were announced. The amount for November will be 80% of average trading profits for November, and for the following two months it will be 40%. The maximum available for the three months will be capped at £5,160.

An additional grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April. The level has not yet been set.

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. Care should be taken that this does not disturb any other benefits that you may already be claiming.

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. The repayment term has been extended from a maximum of six years to ten years. 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

Repayment of the Bounce Back loans can now benefit from a new Pay as You Grow flexible repayment system. This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.

The closing date for application for the above loans has been extended to the end of January.

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 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.
  • A reduction in the VAT rate on certain supplies in the tourism and hospitality sector from 20% to 5% until March next year.

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. When March comes, rather than paying a lump sum in full, you will be able to make 11 smaller interest-free payments during the 2021-22 financial year.

  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,HMRCwill 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 payingHMRCimmediately.

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 inphishing 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, etc, at Companies House

If your private company’s filing deadline falls between 27 June 2020 and 5 April 2021, your deadline for filing accounts at Companies House is automatically extended by 3 months, giving you 12 months to file.

In addition, the 14 day deadline for filing your confirmation statement is extended to 42 days.

https://www.gov.uk/government/publications/the-companies-etc-filing-requirements-temporary-modifications-regulations-2020/temporary-changes-to-companies-house-filing-requirements

But please note that your Corporation Tax remains payable 9 months after the accounting period end, and interest is still charged on late payments.

Also there is no extension to the filing date for individual or partnership Self-Assessment tax returns - returns for 2019/20 are still due on or before 31 January 2021.

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