​Some updates on the various Caronavirus support schemes have been announced, including:

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• Furlough support has been extended to the end of June 2020

• The Furlough cut off date for inclusion has been extended to 19th March (RTI submissions)

• HMRC furlough system is now live and no major issues have been reported

• The new future fund has been set up by the government – more details to follow n the coming days

• Nurseries claiming furlough are only able to make restricted claims based on other government funding

HMRC is asking agents and businesses to be ready to apply for grants through the Coronavirus Job Retention Scheme ahead of its launch on 20 April.

 

The launch date announcement was repeated by HMRC Chief Executive, Jim Harra, when he gave evidence to the Treasury Select Committee on 8th April.  He told the committee that HMRC aims to start payments of the grant to employers on 30 April 2020. 

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Businesses will need the following information for each of their furloughed employees:

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• National Insurance number (NINO). It is not known how employees who do not need to have a NINO will be included.

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

CBILS or the Coronavirus Business Interruption Loan Scheme has had some updates. After the Government confirmed that less than 1,000 loans had been approved, this was much needed.

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Today the Government announced additional terms for the Scheme.  Amongst these were the removal of the requirement for a business to have not been able to access a commercial loan and the tightening up of rules around personal guarantees and unfavourable loan terms. 

 

We are actively assisting clients in preparing application packs for CBILS loans.  Please do reach out to us if we can assist you in determining your likely eligibility and assist you in ensuring you are presenting your business in the best possible form supported by credible forecasts.

On Thursday 26th March 2020 the Government announced further measures to be provided to support the self employed.  The scheme will allow self employed people to claim a taxable grant worth 80% of trading profits capped at £2500 per month for the next 3 months.

 

In order to be eligible to apply you must have traded in the tax year 2019-20, have submitted a self assessment tax return for the tax year 2018-19, be trading when you apply or would have been if it were not for COVID 19 and intend to continue trading. 

 

The grant is to cover lost trading or partnership profits due to COVID 19.

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Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
 

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income

• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
   

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
 

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
 

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

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How much you’ll get

 

You’ll get a taxable grant which will be 80% of the average profits from the 3 previous tax years (where applicable)

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To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
 

• It will be up to a maximum of £2,500 per month for 3 months.

• They will pay the grant directly into your bank account.

• You cannot apply for this scheme yet.

• HMRC will contact you if you are eligible for the scheme and invite you to apply online.

• Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

Update on Coronavirus Job Retention Scheme

 

The government has now published further guidance on the scheme to assist employers including confirming

• Employers will be able to claim for the employees salary up to £2500 plus associated employers NI and pension contributions

• Directors of companies are eligible to claim if they are being furloughed

• Rules around zero hour contract employees and how to calculate how much can be claimed for them

• Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme

• Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme

• Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

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Whilst we wait for the government to confirm exact details of some of the new measures that are being implemented we are able to confirm our understanding to date of the measures announced so far.

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VAT payment deferral

 

Any VAT payments due for payment between now and 30 June 2020 can be deferred for payment until 31 March 2021.  VAT returns must be submitted in time however the payment itself can be deferred.  This is automatic and no application is required.

 

Self assessment payment on account deferral

 

Self assessment payments on accounts due on 31 July 2020 in relation to the tax year ended 5 April 2020 can be deferred for payment to 31 January 2021.  This is automatic and no application is required.

 

The Coronavirus Job Retention Scheme

 

Details are still to be provided in detail by the government but at this time our understanding of the scheme is as follows

 

Furloughed members of staff must NOT work for the employer for the duration of time they are furloughed.

 

The furlough is available from 1 March 2020 and will be available for an initial 3 month period however this will be reviewed.

 

Its available to employees on the payroll at 29 February 2020.

 

All UK businesses are eligible regardless of size.

 

The employer will pay the employees as normal and report through RTI as normal and furloughed employees will be designated as furloughed via a new HMRC system.

 

It will take some time for the government to get the system up and running and therefore employers are expected to support the cash flow in the interim.

 

The maximum grant will be calculated per employee and will be the lower of 80% of wages (we are waiting on the definition of wage but this is expected to include all costs of employment such as employers NIC and pension contributions) and £2500 per month.

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Coronavirus Business Interruption Loan Scheme

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There is no fee for small businesses and the government will pay interest and fees for up to 12 months. Loans of up to £250,000 can be made available unsecured. 

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The terms will be up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

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To check your eligibility for the scheme https://www.british-business-bank.co.uk/wp-content/uploads/2020/03/CBILS-SME-Eligibility-Check-FINAL.pdf 

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For further information you can visit https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/  however our team are on hand to help you apply for loans and liase with banks to provide relevant information.

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Please do get in touch if you would like our assistance on this.

Cash grants are being made available to businesses in the retail and hospitality sector.

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Businesses with a rateable value under £15,000 can obtain a grant of £10,000.

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Businesses with a rateable value between £15,000 and £51,000 can obtain a grant of £25,000.

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This will be for businesses based in England and operate as shops, restaurants, cafes, drinking establishments, cinemas, live music venues, hotels and boarding premises.

 

The funding will be provided through local authorities in early April. The current advice from the Government is that these grants will be automatic by means of your local authority writing to you in due course. 

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With more and more of us needing to work from home, here are some top tips to consider:

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• Try to keep to a routine of getting up and ready for the ‘working day’ before you start working…. Avoid doing video calls in your pj’s!
   

• Find a suitable place for your workspace to create a real sense of being in the office – sitting in front of the TV or on your bed is never a good idea
   

• Take regular breaks – especially at lunch time otherwise those 4 walls are going to drive you insane and the room will feel very small
   

• Decide on your hours of work. Most people will tend to stick to their usual working day, but with children at home you may need to structure your day so that it includes some ‘after bedtime’ hours. If you’re not customer facing and have squared this with your line manager, this can be a benefit of home working
   

• Stay in contact with your colleagues! Home working in these circumstances can be quite isolating for some people so be sure to reach out and still have those conversations like you would in the office

The Prime Minister announced further changes to the fight against the Coronavirus, telling Café’s, pubs, bars, clubs, cinemas, restaurants and gyms among other business to shut their doors from this evening. 

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The Government continued to urge the public to stay at home with a view to continue the social distancing plan.

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In addition, the Chancellor announced the following measures to support businesses facing such difficult times:

   

Job Retention Scheme

Grant to cover wages (80% up to a maximum of £2,500 per employee) – this application will need to be made to HMRC

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VAT holiday

No business will pay VAT from now to June. This VAT will not need to be repaid until the end of the financial year

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Business Loan Scheme

Government extending Coronavirus Business Interruption Loan Scheme from 6 months to 12 months interest free

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Deferred self assessment tax

Payments on account that were due to be paid in July will be delayed to January 2021

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Whilst the full details of these measures are yet to be communicated, if you would like to speak to one of the partners about how these measures may be able to help your business, please contact a member of the Fairman Harris Team 

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There has been much uncertainty for business over the recent weeks and the Government have announced that further financial packages will be announced on 20th March to support businesses. 

 

Prime Minister Boris Johnson has promised to stand by Britons "through thick and thin" and has promised that "further and faster" measures to defeat COVID-19 will be put into place.

 

In his speech today, the Prime Minister confirmed that the Chancellor will be announcing further measures to support business hold on to their employees. He stated that we needed these good businesses to be present after this is all over.

 

The focus appears to be on employees, but we will have to wait until tomorrow to find out the extent of the support available.

 

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Rishi Sunak has announced last night that a package loan and grant of £330bn which is an equivalent to 15% of UK’s GDP. This will be available for any business that requires support to pay for rent, salaries, suppliers or purchase stock.
 

Any business will be able to access a government back loan or credit on attractive terms. He goes onto add that if demand is greater than £330bn he would provide as much capacity as required.
 

The support will be available from next week through two schemes which are:-
 

• larger firms will be able to get lending facility from the Bank of England at low cost and easily;

 

• while small and medium businesses under the new Business Interruption Loan Scheme can get loans up to £5m with no interest for the first 6 months.
   

The chancellor is taking new legal powers over the Covid Bill to provide any further financial assistance to the economy.
 

In the retail, hospitality or leisure sector business rates will be waived for 12 months, and if they have a rateable value of less than £51,000. They can now get a cash grant of up to £25,000 as well.
 

Cash grants to 700,000 of small businesses has increased to £10,000.

Tips for Employers in response to the current guidelines from the Government:

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1. Be aware that the Government are updating guidance daily now. For example yesterday individuals who exhibit the core symptoms of coronavirus (fever / persistent dry cough) should self isolate and so should members of their household.

 

2. If your employees self isolate you should treat the absence as sickness absence and pay statutory sick pay of £94.25 per week for up to two weeks (reimbursed by Government) or occupational sick pay if contractual up to the limits in your scheme. Check your contract of employment.

 

3. If people are self isolating but are feeling well enough to work, and can work remotely (by being connected to Company systems or file sharing or dialling in to calls) then it might be best for your business to allow them to do so.

 

4. If people are anxious about travelling and their work can be done remotely it is probably best to allow this. Make sure that you have a homeworking policy that covers communication, logging work, remote supervision and the health and safety aspects of setting up a remote workstation.

 

5. If work is drying up think about offering unpaid leave, maybe incentivising this by granting additional paid leave e.g. the firm give five additional paid days if the employee takes fifteen unpaid days. Ask for volunteers first.

 

6. Think about offering reduced hours (obviously with reduced pay) again this could be incentivised by increasing the rate for the remaining hours worked for the duration of the pandemic.

 

7. Think about paying for travel to work that avoids the tube or buses - pay for Uber.

 

8. Consider staggering hours so that employees don't have to travel at peak times.

 

9. Ensure that if a skeleton staff are left in the office, maybe lone working can occur, if so make sure that you have a lone working policy.

 

10. Give special consideration to employees over 70 years old or those with on-going health concerns and whether working arrangements need adjusting to reduce the risk to health.

The Chancellor delivered his budget, perhaps one of the most challenging budgets any Government in the post war era has had to deliver. Not only did it need to consider the medium and long term future of the Country's finances, but also deal with an ever changing situation developing as a result of the Coronavirus.

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The key points:

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• An emergency response fund of £5bn is to be made available

• Those having to self isolate will be entitled to statutory sick pay, even if not presenting any symptoms

• Firms with fewer than 250 staff will be entitled to a refund of sick pay

• Small firms will be able to access 'business interruption' loans at a preferential rate

• Business Rates will be held back for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000

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In addition, some of the other measures looking at the future of the Country's finances include:

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• The threshold for National Insurance Contributions will rise from £8,632 to £9,500

• 5% VAT on women's sanitary products will be removed

• Duty on Fuel, spirits, beer, cider and wine will be frozen for another year

• VAT on digital publications will cease from December 2020

• Firms that are eligible for business rates relief will get a cash grant of £3,000

• Discounts on business rates for pubs will rise to £5,000 from £1,000

• Entrepreneurs' Relief lifetime allowance will be reduced to £1M (previously £10M)

The Chancellor, Rishi Sunak, will deliver his budget tomorrow. We may see some measures to help individuals and businesses navigate through the economic uncertainty  in the coming months.

 

In the meantime, we have put together some basic considerations to help with early preparation. 

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1. Think about the risks to your business from a slowdown in the economy and what basic steps you can implement to reduce the consequences. 

2. Have you prepared a cashflow forecast? In all times of uncertainty this is key.  Consider your income streams and how there may be an impact to it. How can you reduce your outgoings? Also review your debtors - As individuals and businesses begin to tighten their belts this will have a ripple effect on debt recovery.

3. If you are considering new opportunities, investments or financial commitments, ensure they will not impact any contingency plans you may have to put into place.

4. Review your employees' rights and your duty of care to them

5. Review your business insurance

ACAS have provided guidance on some of the challenges facing employers as a result of the spread of Coronavirus. Below are some of the more common scenarios that you may be faced with and some considerations:

1. An employee requests to work remotely, following official guidelines to self quarantine or because of caring responsibilities? 

 

There is no automatic right to work remotely but you may find it less disruptive to have the work completed remotely than to deal with an absence that may result if you decline the request. Many roles can be completed remotely with a laptop and a phone. A key consideration is whether providing a work laptop and/or a work mobile is better than asking people to use their own, Company equipment may be better from a security and data protection perspective but IT specialists may be able to reduce the risk of using  private equipment by installing specialist software. 

 

Time management for remote working can be an issue, especially for more junior staff and so if someone is new to remote working you may want to issue guidelines on check in times, availability by phone / skype (or other media) and updating logs / records.

 

Are your files / systems accessible remotely and kept on shared drives or the cloud? Ensuring access arrangements are fit for purpose may be a priority for you.

 

2. An employee refuses to come to work although they have no particular risk of infection and no-one else in the workplace has been diagnosed.

 

Some roles cannot be carried out remotely and you can insist that employees come into work as refusing to attend without being sick is unauthorised absence. Usually it is better to reach an accommodation by allowing leave but this pandemic may be present in London for months and long term absence may be a risk to the business and so your response should be considered and consistent.

 

3. In the event the Government restricts travel / public transport.

 

Like  'snow days' remote working is usually the best approach but shorter working days may be an option.  

 

4. What happens if someone has visited a high risk area (defined by Govt) and has returned?

 

Follow Government advice and don't allow the individual back into the workplace, they may decide to self quarantine in any event. Sickness absence reporting rules apply.

 

5. Should you pay for related absences from work?

 

If someone cannot work remotely and is self quarantined because they visited a high risk area privately there is no obligation to pay. You may wish to continue full pay for morale reasons if few employees are affected.

 

If the visit was on company business you should consider continuing full pay for the period of absence.

 

Absence due to caring responsibilities (such as a school closure) may be unavoidable and your usual absence rules apply. If you allow remote working it is worth being clear about expectations of work to be completed and availability for contact because distractions from work are extremely likely - guidance should be provided sensitively. 

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More information can be found at https://www.acas.org.uk/coronavirus 

The Government are warning that it is no longer 'if' but 'when' the Coronavirus becomes an epidemic. 

As the number of people testing positive for the virus exceeds the 200 mark, we are told to be prepared for the next phase in the Government's plan, the delay phase.

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What this will mean for your business is something that we are still trying to understand. The Government have confirmed that it will announce new legislation to help the Country work through this challenging time. Chancellor Sunak has vowed to help businesses with targeted measures to get them to the other side.

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As always, if you have any specific concerns about how this may affect your business, please reach out to Fahreen and Shafiq

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