Guidance for Clients: COVID-19
We have put together the following guide, which we will continue to update over the coming days and weeks. Where more information is available on each topic, we have provided a link to a longer and more details article.
This guide covers:
- The Coronavirus Job Retention Scheme (CJRS)
- The Self-Employed Income Support Scheme
- Deferring Valued Added Tax (VAT) & Tax Payments
- Coronavirus Business Support Scheme
- Extension of Filing Company Accounts
- Payroll Guidance
- Cash Management
- The Coronavirus Business Interruption Loan Scheme
- Unlocking Cashflow through Proactive VAT Management
- Year-End Stocktakes
- IR35 Delayed
- Charities & Not-for-Profits Support
- Statutory Sick Pay Relief Package
- Other Measures to Support Businesses and Individuals
- Bank of England Interest Rates & Quantitative Easing
- Gender Pay Gap Reporting Suspended
The Coronavirus Job Retention Scheme (CJRS)
The CJRS is focussed around encouraging employers to “furlough” staff rather than laying them off. The term “furlough” isn’t well known in the UK but it is widely understood in (for example) the US economy. It refers to an involuntary temporary leave of absence which is imposed due to the special needs of the company or employer.
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Both the Chancellor’s statement and HMRC’s guidance are a little ambiguous but we understand this to be a grant of up to £2,500 a month per employee.
The Self-Employed Income Support Scheme
The Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP, has announced more measures designed to help the self-employed through the coronavirus crisis.
The key announcement:
Self-employed Income Support Scheme – the Government will pay self-employed people a taxable grant worth 80% of average monthly profits over the past three years up to £2,500 a month.
Deferring Valued Added Tax (VAT) & Tax Payments
The VAT deferral will apply from 20 March 2020 until 30 June 2020. This is an automatic deferral with no applications required.
The deferral for income tax self-assessment applies to the second payment on account for 2019/20 due on 31 July 2020 which is deferred until 31 January 2021. This is an automatic offer and no application is required.
Coronavirus Business Support Fund
Last week, Fiona Hyslop, The Cabinet Secretary for Economy in Scotland, announced actions being taken by the Scottish Government to support businesses. We’ve summarised these support packages in this article.
- A full year’s 100% non-domestic rates relief for retail, hospitality and tourism
- £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
- £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
- 1.6% relief for all properties, effectively freezing the poundage rate next year
- Halting the introduction of the Visitor Levy Bill
Extension of Filing Company Accounts
In response to the Coronavirus, the Government have announced that the filing deadline for company accounts can be extended with prior agreement by 3 months.
Under the measures, any company that applies for an extension to file their results citing COVID-19 will automatically and immediately be granted an additional three-months but you must apply before your filing deadline.
Companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension.
We have prepared this guidance to help reduce the impact that may be caused by your current payroll process being disrupted. We’ve highlighted the common areas of concern in clients’ payroll processes and the actions that can be taken to help mitigate them.
The Coronavirus (COVID-19) pandemic has had an unprecedented impact on the global economy. Businesses are facing uncertain times and the government has responded by announcing a series of welcome support measures. However, businesses cannot simply rely on government support and must be pro-active in navigating their way through the current situation.
There are four key areas that you must focus on: short-term cashflow, stakeholder management, medium-term funding, restructuring & director’s responsibilities.
The Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) was announced by the Chancellor in the budget and has been extended since to provide greater support to business during these difficult times. The scheme is now live and the key features and how to apply can be found in this article.
Unlocking Cashflow through Proactive VAT Management
Effectively managing cashflow has scarcely been more important to businesses across the UK than in the current COVID-19 pandemic. It is important to optimise your cashflow position as much as possible and take advantage of VAT reliefs that are available.
In these unprecedented and uncertain times, the preparation of year-end accounts will not be high on many people’s list of things to worry about; but considering some things now, before the year-end, may prove to be invaluable in the future when drawing up your year-end financial statements.
This article addresses year-end stocktakes and is particularly important as 31 March 2020 is upon us. We recognise that similar issues will still exist at the end of April and possibly beyond.
It has now been confirmed that the new “off-payroll” (IR35) rules have been delayed until 6 April 2021, as part of the package of measures to help businesses deal with COVID-19.
Charities & Not-for-Profits Support
In the current situation, some parts of the third sector will be called upon to support people impacted by the Coronavirus (COVID-19). This will increase the demand on services at a time when income could be reducing.
Such a vital infrastructure needs support when it is most under pressure and additional funding will provide strength to support communities now to help immediate needs. We have highlighted some of the support which has been outlined so far, but we will update this with more information as we receive it.
Statutory Sick Pay Relief Package
In response to the coronavirus outbreak, new Regulations known as The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2000 came into force on 13 March 2020. These will remain in force for a period of 8 months.
The government will bring forward legislation to allow small and medium-sized businesses (SMEs) and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19.
- Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020.
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
- Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force.
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
Other Measures to Support Businesses and Individuals
- Mortgage lenders will provide three-month mortgage holidays for those that are in financial difficulty. It is important to note that borrowers will have to make up the payments at a later date and when you resume payments the amount will be adjusted to be slightly higher because the missed interest payments will be added to the loan.
- There will be an increase in the standard Universal Credit of £20 a week, with the same rise for those still on the working tax credit scheme.
- £1bn has been set aside to help those struggling to pay rent, through increases in housing benefit and Universal Credit.
Bank of England Interest Rates & Quantitative Easing
The Bank of England has cut interest rates to the record low of 0.1%. The Bank also plans to restart Quantitative Easing by buying another £200bn of bonds, mostly government bonds known as gilts. This is in addition to the £445bn of bonds the bank already owns. The goal here is to improve conditions in the gilt market. By buying bonds and providing ready cash the Bank can increase the total amount of cash in the system, hopefully making it run more smoothly.
Gender Pay Gap Reporting Suspended
The Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) have suspended enforcement of gender pay gap reporting deadlines for reporting year of 2019/20. The decision means there will be no expectation on employers to report their data.
More information can be found on the GOV.UK website here.
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