COVID 19 UPDATES
We have all now been working for some time within the new reality of a world with coronavirus, and although restrictions are now starting to be eased, 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 and now have some capacity to hold face to face meetings on site. We can of course continue to have video meetings and 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 offices hours, or post them through our letterbox.
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.
The rules applying generally, including those applicable to businesses and venues, can be found here:
For those businesses which are now allowed to be 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:
JOB RETENTION SCHEME
This scheme provides Government grants of has been extended until 30 September 2021, although the level of grant will be reduced each month from 1 July 2021. Currently, Government grants cover 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 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.
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 rules about making a claim are found here:
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:
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 the amount coverered by the Government. 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 the link to ACAS:
Mobile: 07951 356700
Further to the grants made available in 2020 and during the period of national restrictions, coronavirus Restart Grants are available from 1 April 2021 for certain eligible businesses.
Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council.
Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council.
Further information can be found here:
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 three months. Most payments were received in June 2020;
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.
A second grant worth 70% of average monthly trading profits, paid out in a single instalment covering a further three months’ worth of profits, and capped at £6,570 in total was available in August 2020.
The third grant was 80% of average trading profits over the last three years, for three months. The maximum available for the three months was capped at £7,500.
An additional grant is available for self-employed individuals to cover the period from February 2021 to the end of April. It is also based on 80% of profits and is capped at £7,500, but it also takes into account results for the tax year 2019/20.
For these later grants, additional conditions have been made. These are that you must either:
be currently trading but are impacted by reduced demand due to coronavirus;
have been trading but are temporarily unable to do so due to coronavirus.
You must also declare that:
you intend to continue to trade;
you reasonably believe there will be a significant reduction in your trading profits.
HMRC give further guidance as to what they mean by “reasonable belief” and “significant reduction”.
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.
There will also be a fifth grant covering the period May to September 2021.
Loan schemes for Small and Medium-sized businesses
The Coronavirus Business Interruption Loan Scheme closed to new applications on 31 March 2021.
The Recovery Loan Scheme is now in place for businesses of any size to access loans and other kinds of finance so they can recover after the pandemic and transition period.
Up to £10 million is available per business. The actual amount offered and the terms are at the discretion of participating lenders.
The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.
The scheme is open until 31 December 2021, subject to review.
Loans are available through a network of accredited lenders, listed on the British Business Bank’s website. Further detail is available through the following link:
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 have been:
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, for the first three months of 2021/22 and 66% relief for the next six months subject to a cap. £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 30 September 2021, at which date the rate will increase to 12.5% to 31 March 2022.
Follow this link for full details that are currently available.
HELP WITH TAX PAYMENTS
VAT payments that were due between 20 March 2020 and 30 June 2020 could be deferred until 31 March 2021. From March, rather than paying a lump sum in full, you are able to make 11 smaller interest-free payments during the 2021-22 financial year.
Income Tax Payments
Income tax payments due on 31 July 2020 under Self-Assessment could be deferred, but were due at 31 January 2021, along with any balancing payment for the year to 5 April 2020.
HMRC “Time to Pay”
For businesses and the self-employed worried about being able to pay outstanding tax liabilities, you can set up a payment plan online to spread the cost of your latest Self Assessment bill if:
you owe £30,000 or less
you do not have any other payment plans or debts with HMRC
your tax returns are up to date
it’s less than 60 days after the payment deadline
You do not need to contact HMRC if you set up a payment plan.
If you’re not eligible for a payment plan 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:
Or contact Sue for tailored HR advice:
Mobile: 07951 356700
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:
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
For private companies with a filing deadline falling between 27 June 2020 and 5 April 2021, the deadline for filing accounts at Companies House was automatically extended by 3 months. In addition, the 14 day deadline for filing the confirmation statement was extended to 42 days.
However, those extensions have now come to an end. Anyone who still needs additional time to file must apply to Companies House:
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 was no extension to the filing date for individual or partnership Self-Assessment tax returns – returns for 2019/20 were due on or before 31 January 2021, and penalties arise for late submission.