26 MAY 2020
With news that non-essential retailers will be able to open their doors from 15 June (outdoor markets and car showrooms can open from 1 June), the gradual easing of the lockdown is gathering pace.
At the same time, rumours are that Britain may follow the German and French route by preparing to launch Project Birch, an initiative designed to prop up strategic businesses impacted by the pandemic in which the government takes equity stakes.
May we also draw your attention to two relevant virtual events over the next few weeks:
With more government updates anticipated before the end of May, the momentum for businesses re-emerging and re-imagining themselves is growing.
Until then, stay positive and if you need any questions answered, please don’t hesitate to get in touch.
Applications for the Future Fund commenced last week and are expected to run until the end of September at the earliest. You’ll find all the latest information HERE
This follows hard on the heels of the latest government statistics on how many businesses have benefitted from loans and guarantees. Here’s a snapshot:
The government has also extended the maximum loan size available through the CLBILS from £50 million to £200 million. From next week, 26 May, companies will be able to borrow up to 25% turnover up to a maximum of £200 million. Those borrowing more than £50 million will be subject to restrictions including a ban on dividend payments and cash bonuses, except where they were previously agreed.
It’s nearly a month since the Coronavirus Job Retention Scheme (CJRS) opened and latest data at 19 May indicates 8 million jobs have now been furloughed with £11.1 billion claimed so far.
The big news this month has been the extension of furloughing until the end of October. From the start of August, more flexibility will be introduced to allow furloughed workers to return to work part-time. Employers will be asked to pay a percentage towards the salaries of their furloughed staff ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.
Further details on how this will be structured have been promised by the end of May. In the meantime, the Chancellor published on 22 May 2020 an updated direction in relation to the Covid-19 Job Retention Scheme. The updated direction includes much greater detail on the legal documentation that must be in place for somebody to be furloughed and what activities they can undertake during this period.
In particular, the new direction specifically allows for a furloughed Director to claim under the Job Retention Scheme for the employees of their company, as well as to make wage and salary payments for the company. There is also much more clarity on the conditions that need to be met for a claim to be valid where there has been a transfer of employees and consequently a change in the payroll scheme.
The new direction can be found HERE.
The government also updated their guidance on the Job Retention Scheme on 22 May 2020 to state that the maximum claim for National Insurance contributions per employee was subject to a maximum of 13.8% of the wages claimable under the scheme. This was a new point that had not been previously raised and it is not clear how HMRC will view claims that have already been submitted which do not take this into account.
Our COVID –19 taskforce continues to prepare, review and submit furlough claims. The feedback is that employers’ NI is often being miscalculated, particularly where employers are topping up pay. Salary sacrifice is another area causing challenges. For peace of mind, we can review your claim or the claim for a sample of your employees. Get in touch if you’d like a quote.
Where non-furloughed employees have agreed to a temporary reduction in their pay to support the business, the government has clarified HERE what documentation you should have in place. It’s crucial to get the timing of your agreement spot on to avoid the employee still being subject to income tax and National Insurance on the waived pay
The claims system for the Self-Employed Income Support Scheme (SEISS) went live on 13 May and we’ve updated our website for the latest on how to make a claim. HMRC have also released a short film to show step-by-step, what the claims process looks like. Early indications are that HMRC have been prompt in making payments under the scheme. To date, over 2 million self-employed have claimed around £6.1 billion in total.
The online service for the Coronavirus Statutory Sick Pay Rebate Scheme will be launched on 26 May. This scheme will allow small and medium-sized employers, with fewer than 250 employees, to apply to HMRC to recover up to two weeks of coronavirus-related SSP.
For employers, there are also some things worth considering in relation to your employee benefits. For example, you may provide company cars that are no longer being driven. It’s worth thinking about your policy. Here’s some guidance from HMRC on the benefit in kind implications at gov.uk.
The government is introducing a year-long exemption (16 March 2020 – 5 April 2021), allowing employers to reimburse employees for home office equipment purchased to enable them to work from home without having to pay tax or NIC. To qualify for the exemption, the office equipment must have been purchased for the “sole purpose of enabling the employee to work from home as a result of coronavirus” (so is subject to the proviso that private use is not significant). This could include: computer equipment, office furniture or internet access, for example.
You might also not be aware that you can pay your employees up to £6 a week for the additional household expenses incurred as a result of your employee working from home (£4 a week before 6 April 2020). This is non-taxable and can help cover additional expenses like electricity, heating, broadband without needing a receipt.
It’s worth knowing that temporary changes have been made to the qualifying criteria for Tax-free childcare and 30 hours free childcare during the COVID-19 crisis. These changes may impact your employees including those on furlough as well as other categories including those not able to work or those working less. Further details can be found here.
As more and more businesses re-imagine the future, as well as deal with the present, we also bring you a host of fresh insights on a whole range of highly relevant topics.
Here are today’s Top Four:
Read about the Coronavirus Job Retention Scheme. We’ve never come across the government giving such support to help businesses and their employees.
MoreCovid-19 VAT reliefs. We also cover International Trade support offered by the DIT and UK Export Finance.
moreHow should I approach my bank to manage my debt facilities, and how do I access the recently announced government loan schemes.
moreIncome tax self-assessment payments due on 31 July 2020 will automatically be deferred. We’ve summarised here the key impacts on individuals.
moreEvery business will be impacted by COVID-19, read about the help announced with rent and business rates.
moreAs businesses embark on “the world’s biggest work-from-home experiment”, everything we kicked about in our recent ‘Powering up your Digital Culture’ rings so true. There are 3 key themes (and great practical tips) that every business should consider. Right now.
moreIn these times, working together has never been more important. Or business critical.
moreDon't let worries about your money keep you up at night. Seeking proactive is key.
moreThe guidance on these web pages has been provided for general information only and has been prepared from a variety of sources which have not been verified by Cooper Parry. Government and Treasury guidelines are changing rapidly as the overall response to COVID-19 develops and our guidance is based on information available at the time of writing. Cooper Parry specifically disclaims any liability for any loss, damage or expense of whatsoever nature which is caused by your reliance on the guidance.
