Coronavirus Job Retention scheme
All UK employers can apply to HMRC for support to help pay employees that would otherwise have been laid off during this crisis. They will remain employed and classed as a “furloughed worker”. As an employer you can apply for a grant of up to 80% of their wage up to a cap of £2,500 per month, minimum 3 months. You could choose to fund the differences between this payment and the salary, but you do not have to. More details will be released in the next few days.
Shortly there will be an online portal available for those that need to use this scheme, where you can submit employee and pay information to HMRC.
Who can be furloughed
- To be eligible for the scheme employees must have been employed before 1st March, therefore anyone employed after this date is unlikely to be eligible. On that basis if you do not have sufficient work for your new recruit then you will need to issue a notice to them in accordance with the contract- this will usually only be 1 week but do check your contract.
- The minimum period of furlough is 3 weeks though it is still unclear if staff can be furloughed more than once, we think it is unlikely.
- If an employee is sick of self-isolating they should get SSP, and can be furloughed after the period of SSP has ended.
- Employees who are shielding in line with public health guidance, such as pregnant employees, or those with serious underlying health conditions, can be placed on furlough.
- If you made staff redundant after 1st March, they will be eligible for the Job Retention Scheme grant, and therefore you can consider re-employing them and furloughing them, but that will be a business decision.
Employee rights and restrictions whilst on furlough
- Staff are currently not allowed under this scheme to undertake any work for their employer while on furlough but can undertake training or volunteering without generating revenue. As you will have seen we are lobbying hard to see if a partial furlough scheme could operate alongside these measures, to allow staff to continue to work some reduced hours.
- If an employee has 2 jobs, they can be furloughed for each separately, the cap applies to each employer individually.
- Employees have the same right when furloughed as they did before. This includes Sick Pay, maternity rights, parental rights and other unfair dismissal rights.
- It’s likely that redundancy consultation processes could be carried our whilst staff are on furlough but normal protections and consultation processes apply. The principle is that if you need to reduce staffing levels, you will be able to make staff redundant after the furlough has ended.
Self-employment Income Support Scheme
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.You are entitled to this scheme if you are self-employed or a member of a partnership and have lost income during this pandemic.
These following rules will also apply:
- Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
- Traded in the tax year 2019-20
- Are trading when you apply, or would be except for COVID-19
- Intend to continue to trade in the tax year 2020-21
- Have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.
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. This means that you do not need to apply for this scheme, HMRC will be in contact with you to invite you to apply online. Please refrain from calling HMRC as you can understand they are very busy during this period and will only delay there workings.
Business Interruption Loan Scheme (BILS)
BILS has been set-up to support businesses financially via banks and other institutions, loans will be interest free for 12 months and are designed to help businesses continue during COVID-19.
VAT and Income Tax payments
Businesses will not need to make a payment for VAT during the period of 20th March – 30th June. The company does not need to apply for this, it is automatic. If you wish to defer payment then you will have until the end of the tax year 2021 to make this payment, please note that no interest will be charged and the return will still need to be filed.
If you are self-employed, income tax payments that were due in July 2020 are deferred until January 2021.
Statutory Sick Pay relief package
Small and medium sized businesses and employers will be able to reclaim statutory sick pay for those with employees off due to coronavirus. There are rules to this:
- The refund will be for up to 2 weeks for only those that are off due to coronavirus
- There will no longer be the 3 waiting days before SSP payments start
- Employers with fewer than 250 people
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP sick note.
If employees are caring for people in the same household and therefore have been advised to do a household quarantine, then they are too also entitled to SSP.
Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance. To find out more about Universal Credit please visit this page which covers 'Coronavirus and claiming benefits'.
Business rates holiday & small business grant funding
If your business if based in the UK and is in the retail, hospitality and/or leisure sector then you will be eligible for a business rates holiday. You don’t need to apply for this it will be included in your April bill. Click on the link to estimate the business rate charge you will no longer have to pay.
Grants of £25,000 per property will be available for properties with rateable values of between
£15,001 and £51,000. Your local authority will contact you directly to arrange this.
Mortgages & rent
On Tuesday 17 March, banks agreed with the Chancellor that they will offer 'forbearance' (tolerance and help) on mortgages. This means they all should offer those struggling a three-month 'holiday', allowing customers a temporary break from having to make mortgage payments during this time. Please note this isn’t compulsory, you will need to check with your mortgage provider.
You will still be charged interest, but it’s added to the total cost and you get short time respite. You won’t have to pay it straight away it’ll be added on to the total cost of your mortgage and factored into repayments when you start making them.
If you can’t pay your rent - The government has announced a ban on evictions - your landlord can’t start court action for at least 3 months. You should explain the situation to your landlord straight away - they might give you more time to pay.
The government has also increased housing allowance to cover 30% of market rents.
Increase to working Tax Credits
Working Tax Credits payments will be increased by £1,045 to £3,040 per year from 6 April 2020 until 5 April 2021. The amount a claimant or household will benefit from will depend on their circumstances, including their level of household income. But the increase could mean up to an extra £20 each week. If you already claim these credits you won’t need to do anything, these will automatically be paid to you from April.
Click on this link from GOV.UK which gives 'Guidance to Employers and Businesses about COVID-19'.