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Covid-19 Advice


Here is the up to date government Covid-19 advice.

Here is some General Coronavirus Advice

The government has greenlit £617m worth of funding to help co-working space tenants and market traders ineligible for coronavirus business rates grant.21/05/20
HMRC – Business Covid support finder

In brief:

The government has heeded criticism that certain businesses were not able to access any support and were falling through the cracks. They have subsequently made £617m worth of funding available, in an attempt to rectify this.

The grant is for businesses that have fixed property related costs and is entirely at the discretion of the local authority based on economic need.

The details

The funding is being handled by the local authorities for them to distribute to small businesses who have previously fallen outside grant eligibility. The funding is to cover instances where businesses do not directly pay business rates, making them ineligible for either the small business grants fund or the retail, hospitality, and leisure grants, or for instances where council tax is paid instead of business rates.

  • This grant is primarily aimed at businesses in shared spaces, regular market traders and small charity properties
  • It will also benefit bed and breakfasts that pay council tax rather than business rates
  • There will be three levels of grant payments ranging from £10,000 to £25,000
  • Local authorities can opt to pay less than £10,000 and decisions will take into account local economic factors
  • You must be able to demonstrate that you have seen a significant drop in income due to Coronavirus restriction measures. The specifics of the ‘significant’ criteria are yet to be determined
  • Businesses eligible for other grant schemes will not be eligible for this one
  • This funding is aimed primarily at small (less than 50 employees) businesses with ongoing fixed property-related costs
  • Applications should be made directly through your local authority

Contact details of local councils in England

Future Funds19/05/20
The Future Fund – announced by the Chancellor of the Exchequer on 20th April – will open for applications from Wednesday 20th May.

The Future Fund uses an online platform for applications, which today publishes its set of standard terms and eligibility criteria for borrowers, investors and solicitors to view in advance of opening for applications from Wednesday.

The new Future Fund will support innovative UK companies with good potential, that are essential in ensuring the UK retains its world leading position in science, innovation and technology. These companies typically rely on equity investment and are currently affected by Covid-19.

Until now these companies have been unable to access other government business support programmes because they are either pre-revenue or pre-profit. The financing supports companies facing a significantly extended length of time between funding rounds, due to the impact of the current economic situation.

Developed by government and delivered by the British Business Bank, the Future Fund will help these companies through the current period of economic disruption and recovery, so they are able to continue their growth trajectory and reach their full economic potential.

How it works:

  • Open for applications from Wednesday 20th May.
  • Scheme operates on a commercial basis to deliver an initial commitment of £250m of new government funding.
  • Financing will be unlocked by additional third-party investment on a match funded basis.
  • Applications submitted via an online platform based on a set of standard terms and eligibility criteria.

Eligibility criteria:

  • Companies must be UK-incorporated and if part of a corporate group, only the parent company is eligible.
  • Companies in receipt of the loans will be required to have previously raised at least £250k in equity investment from third party investors in the last five years.
  • Only eligible companies that can attract at least 50% of third-party investment will receive funding.
  • Companies cannot have any of their shares traded on a regulated market, multilateral trading facility or other listing venue.
  • The company must have been incorporated on or before 31st December 2019.
  • At least one of the following must be true for the company:

    • Half or more employees are UK based;
    • Half or more revenues are from UK sales.

For more information on the Future Fund eligibility criteria and applications process, see attached factsheet. Or visit the Future Fund webpages here.

The Future Fund online platform will be open for applications from Wednesday 20th May.

I do hope the above guidance and attached information on the Future Fund is helpful and we will continue to share information with you as and when it becomes available.

Download the Future Fund Factsheet here.

Claim a grant through the Self-Employment Income Support Scheme07/05/20

ACT NOW

The online portal to make a claim under the Self Employment Income Support Scheme (SESS) will open on Wednesday 13th May.

You will need to check that you are eligible NOW using the link below.
You will then be given a date from which you can apply.

Check Now

In brief:

The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits (based on the last 3 tax years) up to a maximum of £2,500 per month, capped at £7,500 in total. This will be paid out in a single instalment.

The details

  • If you receive the grant, you can still continue to work, or take on another role including voluntary work
  • The grant is subject to Income Tax and self employment National Insurance contributions.
You can claim if any of the following applies to you:
You are self-employed or a member of a partnership and:
  1. you traded in the tax year 2018/2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
  2. you traded in the tax year 2019/2020 and you are still trading when you apply, or would be except for COVID-19.
  3. you intend to continue to trade in the tax year 2020/2021.
  4. you carry on a trade which has been adversely affected by coronavirus

Some reasons your business may have been adversely affected by Coronavirus can include, but are not limited to:

  • you’re unable to work because you are shielding / are self-isolating / are on sick leave because of coronavirus / have caring responsibilities because of coronavirus; or
  • you’ve had to scale down or temporarily stop trading because your supply chain has been interrupted / you have fewer or no customers or clients / your staff are unable to come in to work

You must receive at least half of your total income through self employment and have annual trading profits of no more than £50,000.

Check if you’re eligible to claim

You can use the online tool to find out if you’re eligible to make a claim. CLICK HERE to check your eligibility.

We can help you if you need us too.

You will need:

  • Your Self Assessment Unique Taxpayer Reference (UTR) number
  • NI number

How to claim

The online service will be available on Wednesday 13th May.

You will need the following in order to be able to make a claim:

  • Your UTR number
  • Your NI number
  • A Government Gateway user ID and password (if you do not have one you can create this when you check your eligibility to make a claim)
  • Bank account and sort code.

After you’ve claimed

  • You will be told instantly if your grant is approved
  • It will be paid directly paid into your bank account within 6 working days.

You must keep a copy of all records including (amount claimed / claim reference number / as well as the evidence that supported your claim regarding your business being affected by covid-19.

Additionally, you will be required to report the grant claim on your self assessment tax return, eligibility for universal credit and any tax credit claims.

Bounce Back Loans06/05/20
Following the recent announcement of the Bounce Back scheme by Rushi Sunak, further guidance has now been issued. Below we highlight the key features.

If you are having concerns about your cash flow position, or are thinking ahead to your future cash flow position, a Bounce Bank Loan can be a very quick and affordable solution, ensuring you can meet your obligations and continue to trade. Accessible, affordable and flexible support.

Is this the right solution for your business?

The scheme is aimed at small and medium-sized businesses that have been impacted by Coronavirus (COVID-19), it offers access to loans of up to £50,000 but the amount is capped at 25% of your 2019 total turnover.

  • Now available via a growing list of accredited providers – full list on the British Business Bank website
  • Will benefit thousands of businesses, and are ideal for small firms and start ups
  • Companies that are both historically and currently loss making are eligible
  • Apply via accredited lenders, by completing a simple and quick online form
  • The interest rates are set at a low fixed flat rate of 2.5%
  • No interest or capital repayments due in the first 12 months (interest for the first 12 months is covered by the government)
  • The government will provide lenders with a 100% guarantee and cover the cost of any setup fees
  • Six year term and no early repayment fees
  • Expected 48 hour turnaround from start to finish
  • You’re responsible for repaying 100% of the loan by the end of the term

** Please note that any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this generous new scheme.

Claim back Statutory Sick Pay paid to employees due to Coronavirus05/05/20
The online service you’ll use to reclaim SSP is not available yet. HMRC will announce when the service is available and this guidance will be updated.

In brief

  • The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees
  • The repayment will cover up to 2 weeks SSP, starting from the first day of sickness, if an employee is unable to work because they either: have coronavirus or cannot work because they are self-isolating at home or are shielding in line with public health guidance

The period of sickness must have started on or after:

  • 13 March 2020 if your employee had coronavirus or was self isolating because of coronavirus
  • 16 April 2020 if your employee was shielding because of coronavirus.

The amount you can reclaim will be £95.85 a week.

  • Employees are not required to give you a doctor’s note for you to make a claim.
  • It covers contracts including: full-time employees / part-time employees / employees on agency contracts / employees on flexible or zero-hour contracts

NB. If you’re an employer who pays more than the current rate of SSP you can only claim the current rate amount.

To be eligible as an employer, you must meet the following criteria:
  • The employee you are claiming for is eligible for sick pay due to coronavirus
  • You need to have had a PAYE payroll scheme that was created and started on or before 28 February 2020
  • You have fewer than 250 employees (on 28 February 2020)

NB. There is a limit of €800,000 of state aid under the EU Commission temporary framework. Please click here for further clarification.

You must keep records of all the statutory sick payments that you want to claim from HMRC, including:

  • The reason why an employee could not work
  • Start and end dates of periods an employee didn’t work
  • National Insurance numbers of the employees

NB. You are required to keep these records for at least 3 years following any claim you submit.

Bounce Back Loans28/04/20
Following continued concern that the banking sector has been slow to process CBIL’s, with only c16,000 being approved to date and amounting to £2.8bn, Rishi Sunak has today announced a further option for SME’s.

In summary, the new Bounce Back Loans are aimed at the UK’s smallest businesses and will provide them access to loans of up to 25% of their turnover (a max. of £50,000) within 24 hours of applying.

The new Bounce Back Loans will be 100% guaranteed by the Treasury, meaning the government will take on all the default risk. They will be available from Monday 4th May at 9am.

This announcement was only made at 4pm this afternoon and the details are at this stage limited, we will continue to update you as developments occur.

In summary

  • Maximum loan amount of 25% of turnover or £50k, whichever is lower
  • No repayments are required for the first 12 months
  • No requirement for bank eligibility
  • Simple 2 page on-line application form
  • 100% government guarantee
  • Available from 9am on Monday 4th May 2020
  • Loans will then be available within 24 hrs of approval

As ever, we are here to assist you in any way we can. Please get in touch with your Account Manager if you would like to discuss your options.

Faqs For Smes: Coronavirus Business Interruption Loan Scheme (CBILS)21/04/20

QAre businesses with private equity investment eligible under the CBIL Scheme, subject to them meeting the CBILS eligibility criteria?

If a business has a private equity investor, even where that investor holds a majority or controlling stake, they can still be eligible for CBILS.

When assessing the £45m turnover eligibility threshold, the business will be considered separately to the private equity investor, and its other investments. If the business’s turnover is below that threshold, they can be eligible for the CBILS, provided they meet the other eligibility criteria.

To determine the maximum amount available to a business under CBILS, the business is treated as standalone from its private equity investor, and the other businesses it may have invested in. Therefore the £5m maximum loan size applies to that business only.

QCan companies that have received support from the Enterprise Investment Scheme (EIS) apply for CBILS?

Companies that have received funding through EIS are in principle eligible for support from CBILS, provided that they satisfy the other criteria.

QAre financial services firms eligible for CBILS?

In principle they are eligible, including non-bank financial institutions, (secured and unsecured lenders); FCA-regulated financial intermediaries (such as credit brokers, finance houses, equipment renting/leasing businesses, financial intermediation firms); and firms that offer independent financial advice/services on financial matters (for instance accountants, auditors, mortgage brokers).

However, deposit-taking banks, b¬uilding societies and insurers writing contracts of insurance as principal are not eligible for CBILS.

QAre membership organisations eligible for CBILS?

Business, employer, professional, religious or political membership organisations or trade unions are in principle eligible.

QAre housing associations eligible for CBILS?

Housing associations which are partly or mainly grant-funded will not be eligible.

QAre public-sector organisations eligible for CBILS?

If the organisation is classified as a public-sector organisation by the Office of National Statistics, it is not eligible for CBILS.

QIf a company with UK employees exports over 80% of its services, does this class as a UK business activity?

Yes, it does. This would be a UK trading activity even if the company’s income comes wholly or mainly from exporting.

QAre exporters eligible?

Export businesses are in principle eligible and welcome into the scheme. [For loans under £30,000, the loan cannot be used for certain activities outside of the UK. A borrower may self-certify the loan isn’t going to be used for these purposes.]

QIs an SME based overseas eligible?

An SME which is foreign-owned is in principle eligible to apply for CBILS, provided it is trading in the UK (not just selling into the UK and has the core of its business operations in the UK); and uses the CBIL Facility to support its business activity in the UK. The same is true for an SME which has UK ownership but is registered abroad.

USEFUL DEFINITIONS:

QWhat kinds of businesses are eligible for the CBIL scheme?

Business with turnover of £45m or less are eligible under CBILS. AN SME can also be a sole trader or a partnership, as well as a limited company, under the CBILS definition.

QWhat is ‘turnover’ for the purpose of checking eligibility for CBILS?

If it is a sole enterprise it is the turnover of the applicant only, as shown in the latest set of accounts. For applicants acting as part of a group, that have partners or linked enterprises, the turnover assessment should take the latest turnover of the applicant, as shown in their accounts, together with the turnover of any linked enterprises, any partners of any linked enterprises, any enterprises linked to any of the applicant’s partners and any enterprise linked to the applicant’s linked companies.

QWhat is a “sole enterprise”?

A sole business (for the purposes of CBILS) is one that holds no more than 25% of the capital or voting rights (whichever is higher) in one or more other businesses; and/or other businesses hold no more than 25% of the capital or voting rights (whichever is higher) in them; or it is not linked to another business according to the criteria for ‘linked enterprises’.

In addition, certain investors may individually have a stake of up to 50% in the business and it may still be considered a sole business[1] : public investment corporations, venture capital companies[2] and business angels[3] (provided the investment is less than €1.25m), universities and non-profit-making research centres, institutional investors, (including regional development funds)[4],or autonomous local authorities (with an annual budget of less than €10m and fewer than 5,000 inhabitants).

QWhat is a “linked” businesses?

Linked businesses form a group by controlling the majority of voting rights of an enterprise, either directly or indirectly; or being able to exercise dominant influence over an enterprise.

Enterprises are linked when one holds a majority of the shareholders’ or members’ voting rights in another; or can appoint or remove a majority of the other’s administrative, management or supervisory body; or there is a contract between them enabling one to exercise a dominant influence over the other; or one can exercise sole control over a majority of shareholders’ or members’ voting rights in another. A typical example is a wholly owned subsidiary.

An enterprise is indirectly linked to a business if it is directly linked to an enterprise that is linked directly to the business.

QWhat is a “partner” business?

A “partner” business is an enterprise that has certain financial partnership with another, without one exercising effective direct or indirect control over the other. They are not sole enterprises or linked enterprises.

This is the case where both hold 25% or more of the capital or voting rights in each other; and are not linked to other enterprises. Among other things, their voting rights in each other do not exceed 50%.

TURNOVER AND INCOME GENERATION:

QDoes CBILS require that eligible companies generate a certain percentage of annual turnover from trading activities?

An eligible SME must generating more than 50% of its income from trading – the sale of goods or services. CBILS is not designed to support shell companies.

QIs a company that derives income from property eligible for CBILS?

If it derives more than 50% of its income from commercial activity that generates turnover, whether or not this is with the intention of making a profit. This includes real estate SMEs that derive income from property, (including real estate investment companies).

WHO CAN APPLY?

QIs a CBIL Facility available to existing customers of participating lenders or can an SME who is not an existing customer still apply?

CBILS is open to all eligible borrowers – a business does not need to be an existing customer of the lender you are approaching.

UNDERSTANDING WHAT IS MEANT BY A BUSINESS IN DIFFICULTY

QWhat businesses meet the ‘business in difficulty’ criteria?

A ‘business in difficulty’ is one that, as at 31 December 2019, had:

  • accumulated losses of more than half of its subscribed share capital for limited companies, or for unlimited liability companies, its capital; or
  • started, or had fulfilled the criteria to be put into, collective insolvency proceedings;
  • previously received rescue aid that was yet to be reimbursed (or, in the case of a guarantee, terminated); or
  • received restructuring aid, and was still under a restructuring plan; or
  • (where it not meet the SME criteria) has fallen below solvency ratios for the previous two years.

QWhat does the accumulated losses criteria for a ‘business in difficulty’ mean?

The CBILS definition of a “business in difficulty” includes businesses that have accumulated losses, that are greater than half of their subscribed share capital, as at 31 December 2019.

For a limited liability company this means having accumulated losses greater than half of its capital, if deducting accumulated losses from the company’s reserves leads to a negative amount that exceeds half of the company’s subscribed share capital.

These criteria do not apply to SMEs that, on 31 December 2019, had existed for less than three years. That means that certain fast-growth businesses may not be eligible for the scheme (unless they are less than three years old).

QWhat are ‘collective insolvency proceedings’?

These are as defined by the Commission Regulation (EU) 2015/848 of 20 May 2015, rather than the definition of “insolvency proceedings” in the Insolvency Act 1986. This means:

  • Winding-up by, or subject to the supervision of, a court;
  • Creditors’ voluntary winding-up (with confirmation by the court);
  • Administration;
  • Voluntary arrangements under insolvency legislation; or
  • Bankruptcy or sequestration

The “voluntary arrangements” above include company and individual voluntary arrangements.

Receiverships, members’ voluntary liquidations and schemes of arrangement (under Part 26 of the Companies Act 2006) are not included.

QWhat does ‘fulfils the criteria under its domestic law’ mean in collective insolvency proceedings?

There is no official guidance from the European Commission on what this means, but if a borrower is the subject of any of the proceedings listed above, or is not subject to any insolvency proceedings, but meets the criteria above, the borrower should be categorised as a “business in difficulty”.

QWhat defines rescue aid or restructuring aid?

Rescue or restructuring aid is normally the subject of a specific State aid approval from the European Commission. For the avoidance of doubt, aid provided under the Enterprise Finance Guarantee Scheme is not rescue or restructuring aid.

QWhat criteria must a company that is not an SME (because it has 250 or more employees) meet to not be considered as “in difficulty”?

For the two years prior to 31 December 2019 the book debt to equity ratio was greater than 7,5; and its EBITDA interest coverage ratio was below 1.0. A business must meet both to be classed as ‘in difficulty’. SMEs are not required to meet these solvency ratios.

QWhich companies can be classed as SMEs for the ‘business in difficulty’ definition?

This can include self-employed people; family businesses; and partnerships or associations regularly engaged in an economic activity. A micro, small or medium-sized if it employs fewer than 250 people and has an annual turnover of no more than £45 million.

QShould the tests for a ‘business in difficulty’ be on an individual or group basis?

You should calculate these on a group basis.

QAre there any exceptions to the accumulated losses test?

The accumulated losses test does not apply if the business is an SME that, on 31 December 2019, had existed for less than three years; or is a trust or unincorporated association.

QAre there any exceptions, to a business having to be a ‘business in difficulty’?

For facilities under £30,000, the ‘business in difficulty’ test does not apply as a facility of this level is considered to involve a de minimis amount of State aid.

QHow do the business in difficulty test apply to a charity or non-profit organisation?

If a charity or non-profit organisation provides goods and services and is a limited liability company or an unlimited liability company, the test should be applied as with other companies. Where it undertakes its activity through a subsidiary, the tests should be applied on a group basis. If it is a trust or unincorporated association, the accumulated losses test does not apply.

Download the CLBILS Factsheet here

Plan A / Plan B06/04/20
With a raft of support measures being rolled out by the government and banks, we would anticipate some initial delays due to the volume of claims and applications to be handled. So, whilst you may be eligible to access the support, it is important to anticipate a possible delay.

We have prepared a few action points we would like you to consider. At all stages, it is important to fully understand which, if any, options are available to you. You may not need to act on them, but it will serve you well to be very prepared and able to act quickly.

At all times, please keep communicating with us.

Cashflow

The fundamental requirement for any business, will be your understanding of your cashflow situation. Technology allows us to operate in real time to give you a clear understanding of your cash flow position.

Do you use software such as Fluidly for your cashflow projections? It is a free cashflow forecasting tool, is compatible with Xero and QuickBooks Online. It is free for up to 3 months forecast or £30 per month for up to 12 months with our partner discount. We can invite you to Fluidly if we have access to your Xero or QuickBooks Online subscriptions.

If Fluidly isn’t suitable, we recommend you speak to your software provider to see whether you have a cashflow forecasting module available for the software that you currently use.

If you need more advanced forecasting functionality, then speak to us about forecasting tools that we have partnerships with or to speak to us about template spreadsheets for cashflow forecasting for one-off forecasts.

It has never been more important to have a full 360 of your cashflow position.

Q. What is your cashflow position?

Coronavirus Business Interruption Loan Scheme

Q. Have you contacted you bank regarding Coronavirus Business Interruption Loan Scheme?

Bank Overdraft

Q. Have you contacted your bank to ask, in principle, your ability to increase your overdraft should you require it?

Job Retention Scheme

Employers can claim for 80% of furloughed employees’ usual monthly wages, up to £2,500 a month plus national insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

Q. Are you planning on furloughing any of your staff?

You will be required to contact HMRC regarding the staff you are Furloughing.

Q. Have you considered how you will cover any potential shortfall of the furlough in case there is a delay in receiving the benefit from HMRC.

Useful number

HMRC coronavirus helpline details updated. The telephone number for HMRC’s coronavirus (COVID-19) helpline is 0800 024 1222.

Make sure you have your UTR (unique tax reference), Company registered office and address to hand.

Suppliers

Q. Are you liaising with suppliers? Are there any gaps in your supply chain?

Time to Pay Scheme

Q. Are you planning to take advantage of the TTP scheme? Have you contacted HMRC?

Support for businesses that pay little or no business rates (businesses that already pay little or no business rates through the SBBR (Small Business Rates Relief) and RRR (Retail Rate Relief) schemes)

Q. If so, have you applied for a one-off grant of £10,000?

Does your business fall within the retail, hospitality and leisure industries?

Business rates have been abolished for this year, and a £25,000 grant is available to certain businesses operating in small premises (with a rateable value between £15,000 and £51,000).

This can be accessed through your local authority, please login and register.

Are you self-employed?

If so, you may now be eligible for Universal Credit for self-employed (equivalent rate to Statutory Sick Pay). Additionally, Universal Credit has also been expanded by an extra £1,000 a year.

Q. Read more here >>> and apply if you qualify. Have you applied?

Are you a commercial tenant?

Have you spoken with your landlord? The government has announced that no business will be forced out of its premises if it misses a rent payment in the next three months, however it is always best to communicate.

Q. Have you spoken with your landlord?

Do you have a mortgage?

Q. Have you spoken to your lender?

VAT Delays

Whilst VAT payments are delayed – it is still important to continue to submit in order to ensure continuously UpToDate figures. This is an automatic scheme and no application is required.

Insurance

Are you able to claim on your insurance against Covid-19?

Q. Have you checked your policy with your insurer/broker?

Minimising overheads

Q. Are there currently any overheads or subscriptions you don’t need / can renegotiate?

Update to the Job Retention Scheme28/03/20

The Government released updated guidance yesterday evening (26th March) in relation to the Job Retention Scheme and “furloughing” employees. Here we explain how this will impact you and your employees in more detail together with detail on those unanswered questions which we have all been asking about.

If you wish to see our previous FAQs on this matter, please click the link below:

FAQ’s on Job Retention Scheme

Has there been further guidance on who can claim under the scheme?

We previously mentioned that any employer in the UK can claim:

  • UK Businesses (any size)
  • charities
  • recruitment agents (agency workers paid through PAYE) and
  • public authorities

However, those claiming must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

Has there been any additional guidance around which employees will qualify?

  • Furloughed employees must have been on your PAYE payroll on 28th February 2020
  • Any contract type qualifies, including full time, part time, agency contracts and those on flexible or zero contract hours

What can you claim back?

Employers can only claim for employees on the payroll as at 28 February 2020 and claim back the lower of:

  1. 80% of usual monthly wage costs or
  2. £2,500 per employee

Plus:

  1. Associated employer NIC costs and
  2. Minimum auto enrolment employer pension contributions
  • Employers must pay the employee at least the amount of the HMRC grant but can choose to top up salaries if they wish
  • Fees, commission and bonuses cannot be included in the calculation

Is the reimbursement from HMRC a grant or a loan from the Government?

  • The amount received will be a grant and does not need to be paid back to HMRC
  • The amount received will be treated as income in your annual accounts

On what basis is the 80% salary calculated for those on a fixed salary?

The 80% calculation is based on the employee’s gross salary as at 28 February 2020

How is the 80% calculated for those with irregular earnings?

  • If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, the employer can claim for the higher of either:
    1. The same month’s earning from the previous year
    2. Average monthly earnings from the 2019-20 tax year
  • If the employee has been employed for less than a year, the employer can claim for an average of their monthly earnings since they started work
  • If the employee started employment in February 2020, their earnings so far should be pro-rated

I am an owner managed business, drawing NIC minimum salary plus dividends, can I claim through the scheme?

  • Yes, but your salary will be based on the amount paid under PAYE on 28 February 2020 and
  • You will need to meet the criteria to be able to join the scheme (i.e. you must not do any work in relation to servicing the business or generating revenue)

What happens if I have already made redundancies?

  • Any employees made redundant since 28 February 2020 can qualify as long as they are re-engaged by their former employer

If I have placed employees on unpaid leave can these qualify?

  • No, employees on unpaid leave cannot be furloughed unless that unpaid leave started after 28 February

My employee has more than one job, how do I treat these?

Each employment will be treated separately for these purposes and so the grant will apply to each employer individually

Can employees on reduced hours qualify?

  • The employer cannot access the scheme for any employees still working
  • It will be necessary to furlough these employees and for them to not work in order to obtain access to the scheme

Is it possible to reduce the employee’s salary without notification?

  • No, as an employer you will need to agree with the employee the reduced amount
  • We would recommend that you seek legal or HR specialist advice in relation to this

When my employees are furloughed is there a need to put this in writing?

  • Yes absolutely, you must confirm the employee’s new status in writing
  • This is an eligibility requirement for accessing the scheme and has been stated specifically in HMRC guidance
  • A record must be kept of this correspondence

Can I rotate furlough leave between my staff?

  • The guidance states that employees must be furloughed for a minimum of three weeks
  • It would appear that it is possible to rotate furlough leave between staff subject to the minimum three week period

How does an employer make a claim to HMRC for reimbursement?

To claim, the employer will need to submit:

  • The employer’s ePAYE reference number
  • The number of employees being furloughed
  • The claim period (start and end date)
  • The amount claimed
  • The employer’s bank account number and sort code (UK bank account)
  • A contact phone number
  • Employers can only submit one claim at least every three weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated to 1 March 2020 if applicable
  • Reimbursement is made via BACS payment

My business is in administration who makes the claim?

  • It will be the administrator that will be able to access the Job Retention Scheme

How can LB Group assist me with the Job Retention Scheme?

  • We can provide generic advice to your business and staff
  • We are not employment law specialists so anything in relation to contract law or employment law will need to be discussed with a specialist. We can recommend lawyers and HR specialists in this area
  • We can assist you with any calculations needed
  • Once the portal is up and running we can assist you with your applications to secure the grants for your business and agree a fee quote for doing this based on the level of support you need
Self Employment Income Support Scheme27/03/20
Amidst continual requests from the self employed sector, the government have tonight announced how they plan to support this vast sector of our UK work force.

A Guide to the Coronavirus Self Employment Income Support Scheme

  • The Self Employed will receive a taxable grant worth 80% of that persons average monthly profit, for the last three years. This therefore levels the playing field with the Job Retention Scheme for employees
  • It is a maximum of £2,500 per month, initially it will be available for a three month period but it may be extended, if the government feel it is required
  • It will be paid directly to your bank account, in one instalment
  • You CANNOT apply for this scheme yet, and notably, you will be contacted by HMRC if you are eligible
  • The phrase the Chancellor used to describe this support, was that it is a “taxable grant”. We believe this means it will form part of the self employed individuals taxable income for 2020-21, but will clarify when the full details become clear
  • HMRC will use the average trading profits from tax returns in 2016-17, 2017-18 and 2018-19 to determine the size of the grant
  • Access to funds expected by June, although no promises made
  • This scheme also applies to members of partnerships
  • Further information and details of the scheme will be shared shortly by HMRC

Who can apply?

Either one of these statements will be correct:
  • You have 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
  • You have 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
Additionally:
  • You have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 and traded in the tax year 2019-20
  • You are still trading when you apply (or would be except for COVID-19)
  • You intend to continue to trade in the tax year 2020-21
  • You have lost trading/partnership trading profits due to COVID-19

Who does not qualify?

Those who pay themselves a salary and dividends through their own limited company are not covered by the scheme but will be covered for their PAYE salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

Important

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 (please note that 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).

If you claim tax credits you’ll need to include the grant in your claim as income.

Job Retention Scheme25/03/20
The Chancellor, Rishi Sunak MP announced the Coronavirus Job Retention Scheme on 20 March. Under the scheme, any employer can obtain a grant to cover 80% of the salary of employees who would otherwise have been laid off, up to a cap of £2,500 a month.

The scheme will be backdated to 1 March 2020 and open initially for three months unless extended.

Here is a detailed list of frequently asked questions and answers to help guide you through what this means for your business. At present there are a lot of unanswered questions, so we eagerly await further information as to how this works.

A Guide to the Coronavirus Job Retention Scheme

How does my business qualify for the scheme?

Any employer in the Country will qualify for the scheme, whether small, large, charitable or non-profit.

What type of employees are covered under the scheme?

The scheme will apply to all those on PAYE including zero contract staff.

What do I need to do as an employer?

To obtain the grants, you as the employer will need to:

  • Designate affected employees as “furloughed” and notify them of the change.
  • Consider whether you need to consult with representatives or trade unions.
  • Agree the changes with your employees
  • Confirm the employee’s new status in writing.
  • Submit information to HMRC about your furloughed employees and their earnings through a new online portal, which is yet to be established.

What does “Furlough” (pronounced FUR-LOH) or “Furloughed” mean?

The employee must remain on the payroll rather than dismissed for redundancy. It is not clear whether anything can be done for those already dismissed as redundant or given notice of redundancy. We are awaiting further guidance on this.

Can my furloughed employee continue to work?
  • No. The furloughed individual remains as an employee but is provided with no work and must not work.
What happens if my employees are on Statutory Sick Pay (SSP) who we have designated to Furlough?
  • SSP comes first and then furlough follows subject to the conditions and processes mentioned above.
Does it apply to employees who are taking leave due to school closures?
  • Probably not, if work is available for them to do. We will check this as further details of the scheme are released.
Can my employees request that they are placed on furlough leave?
  • Yes, but you, as the employer, do not have to agree.
  • It is the employer’s decision whether to place employees on furlough leave or make them redundant.
How much will I need to pay my furloughed employees?
  • You can pay 80% of salary, subject to agreement with your employee, with a reimbursement from HMRC up to the cap and
  • You can choose to top up their salary to 100%, if you wish.
Do I need to be aware of any issues in making an employee furloughed?
  • Care is needed over existing employment law, and you will need to take legal advice.
  • If an employee is on a fixed salary you will not be able to simply inform the employee that they are now furloughed and only entitled to 80% of their salary.
  • As an employer you will need to either top up their salary or negotiate a reduction with them. It is expected that most employees will accept a reduction on the basis that the alternative is possible redundancy.

What about employees without a fixed salary?

  • There is no guidance on how this will work at present. Likewise, for staff who have no guaranteed earnings (casual and zero contract hours) or those that have no contractual right to pay in the event of a downturn. We await further guidance on this.

What does the £2,500 cover?

  • The guidance states the employers will be reimbursed 80% of furloughed workers wage costs up to a cap of £2,500. It is unclear whether the reimbursement covers anything other than basic salary. However, “all employment costs” would suggest additional costs such as pension contributions or other benefits.
  • It is unclear at this stage whether the £2,500 is gross or net of tax and NIC. We wait for further confirmation on this point from HMRC.
How will my employees receive their money?
  • They will receive wages through your normal payroll arrangements, subject to the usual deductions. You, as their employer, will then be reimbursed via HMRC.
How quickly will grants be available?
  • Grants should be available “within weeks” and the scheme will be up and running by the end of April. HMRC has to design the portal.
How can we afford to pay our people in the meantime?
  • The government has made clear that the intention of the scheme is to save jobs and ensure employees retain an income.
  • Zero interest loans are available through the Business Interruption Loan Scheme. VAT has also been deferred and grants are available for certain sectors, which should help with cashflow.
How can LB Group assist me with the Job Retention Scheme?
  • We can provide generic advice on the information we know so far but until the detail of the scheme is released there are still so many unanswered questions.
  • We are not employment law specialists so anything in relation to contract law or employment law will need to be discussed with a specialist. We can recommend lawyers and HR specialists in this area.
  • Once the portal is up and running we can assist you with your applications to secure the grants for your business and agree a fee quote for doing this based on the level of support you need.
Commercial Tenant Protection23/03/20
The government has announced that commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.

Measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.

Further information can be found on the government’s website.

Support for Workers20/03/20
To protect jobs

The key points to observe from the announcements today are:

  • The Coronavirus Job Retention Scheme, in place by 01/03/2020
  • All employers will be eligible
  • Employers are able to contact HMRC directly for a grant
  • Grants are available at 80% of employees salary for a retained worker up to a limit of £2,500 per month
  • The grant will be back dated to 01/03/2020
  • Covers anyone under PAYE scheme
  • In place for at least 3 months initially, although this may be extended
  • The aim is to have it operating by April, further clarification is however required.
Strengthening the Safety Network20/03/20
  • Increase of Universal Credit for next 12 months by £1k per annum
  • Working tax credits increased by £1k per annum
  • Self employed able to access in full Universal Credit
  • Next Self Assessment payment deferred until January ‘21
  • 3 month mortgage deferral
  • Housing credits and allowances to cover 30% of commercial rent
VAT Payments17/03/20
  • Deferring of next quarters VAT payment to the end of June – to be repaid by the end of the financial year
Grants and reliefs for SMEs17/03/20
Following an update today with further pledges of funds to support businesses of all sizes, as well as some more sector specific support, we wanted to highlight a few of todays announcements that may provide an additional buffer for your business. Rishi Sunak has promised to:

  • Increase the grant to £10k from £3k for businesses who qualify for Small Business Rates Relief (businesses trading from properties with rateable value £15k)
  • Provide additional support to leisure and retail businesses. They will not be required to pay rates for 20/21 regardless of rateable value of the property
  • Give cash grants for retail and leisure businesses of up to £25k where the business has a rateable value below £51k

A further notable positive, was the 3 month mortgage holiday which has been promised, which will hopefully relieve some of your concerns regarding your staffs situation as well as your own.

IR35 postponement17/03/20
IR35 is being postponed for a year as part of a broad package of measures the Treasury has announced to protect the economy from the coronavirus outbreak.
Time to pay service16/03/20
TTP – Time to pay service to allow businesses and the self employed to defer tax payments The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice. Up to 2,000 experienced HMRC call handlers have been assigned to support businesses and individuals when needed.

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