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Coronavirus Job Retention Scheme (CJRS) from 1 September
From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
Employers will still need to pay furloughed employees 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in September, employers are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
Employers will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from their own funds.
Furlough Scheme Summary
The Coronavirus Job Retention Scheme will close on 31 October 2020.
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:
there are no changes to grant levels in June
for June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work
for August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough
for September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
for October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
Second Self Employment Income Support Scheme (SEISS) 14/08/2020
The SEISS scheme will open for claims on 17 August and HMRC will contact "customers" and give a date to make a claim. You can claim any time between the allocated date and the 19 October 2020.
The eligibility criteria for the second grant is exactly the same as the first grant – so self-employed people who were eligible for the first SEISS grant will be eligible for the second grant, so long as their business has been adversely affected since 14 July 2020.
This typically means that their business has experienced lower income and / or higher costs because of coronavirus (COVID-19) since 14 July.
There is no minimum threshold over which a business’s income, costs or activity need to have changed by, but you will be asked to keep appropriate records as evidence of how the business has been adversely affected.
The second taxable grant is worth 70% of average monthly trading profits, a reduction from the 80% available under the first grant. This will be paid out in a single instalment and will be based on three months’ worth of trading profits and capped at a maximum of £6,570.
HMRC Employer Bulletin (August 2020, issue 85) 13/08/2020
HMRC Employer Bulletin (August 2020, issue 85) which includes all of the latest COVID-19 updates to help you continue to meet your payroll obligations to HMRC and to claim any relevant grants and rebates during this challenging time. Also includes the latest update on the Coronavirus Job Retention Scheme and what you need to know from 1 August onwards, as well as a reminder on the Loan Charge and an update on the end of VAT payment deferrals.
UK VAT change announcement 08/07/2020
In the Chancellor’s summer statement today, he shared the government's plans to change UK VAT from 20% to 5% for the hospitality and tourism sectors.
This change will come into effect from Wednesday 15 July 2020 and run through until 12 January 2021.
Businesses that buy and sell food, provide accommodation or manage attractions will need to update their software for these changes in VAT.
Furlough Employees and Holidays / Annual Leave
Employees on furlough, the employer can make you take annual leave during furlough. However; you're owed your full holiday pay for those days taken as annual leave.
Employment body ACAS link:
Employer will need to give you notice, generally of at least twice the amount of time you're being asked to take as leave. So if your employer says you need to take a week's leave, it has to tell you at least two weeks before (unless your contract specifies a different notice period).
Both Government and ACAS say that while employees are on annual leave, they'll need to be paid FULL holiday pay.
If the employee's usual holiday pay would be worth more than their wage during furlough, the employer will need to top up wages so that the employee is receiving their usual holiday pay for the period on annual leave.
Employers can claim through the job retention scheme for furloughed workers whilst they are on annual leave.
UK GDP slumps over 20% in April as full impact of Covid-19 is felt
GDP slumped by 20.4% in April 2020, following a fall of 5.8% in March 2020, according to the latest figures from the Office for National Statistics.
These figures reflect many businesses closing down and workers being placed on furlough.
As businesses start to slowly reopen, in what will be a very difficult, and different, business climate. Accountants are well placed to offer advice and assistance, such as looking at the business future cash position, profitability etc.
Please do not hesitate to contact us if you require any advice or assistance; or whether we can adapt services to fit your business needs; or to discuss new services that your business requires.
Leicester city centre changes to prepare for the return of shoppers
The business secretary, Alok Sharma, confirmed on 9th June that non-essential shops in England can open from Monday (15/06/2020), saying the move will “allow high streets up and down the country to spring back to life”.
Leicester City Council has taken steps so people can more easily get about while keeping a 2m distance from each other.
The Leicester Transport Recovery Plan can be viewed here:
Changes to the Coronavirus Job Retention Scheme (CJRS)
Outlined below are important dates that may impact you in the coming weeks.
Important dates – what you need to know now
The scheme will close to anyone who hasn’t been furloughed for 3 weeks by 30 June, so you will only be able to claim for employees after that if they have been furloughed for a full three-week period at any time before the end of June.
So, if you intend to furlough an employee who hasn’t been furloughed before, you will need to agree that with them and start their period of furlough on or before 10 June – this is the last day on which someone who has never been furloughed before can start a period of furlough and qualify for the scheme – this ensures the minimum three-week period is complete by 30 June.
You will then have until 31 July to make a claim for any periods of furlough up until 30 June – this applies to both employees furloughed for the first time and those you have previously furloughed and claimed for.
The future of the scheme
The rules of the scheme are changing from 1 July.
On 12 June, HMRC will publish full guidance on all the scheme changes on GOV.UK – search for 'Coronavirus Job Retention Scheme' to find this – webinars offering more support on the changes will also be available to book online from 12 June.
HMRC request that you do not call them for more information, as everything you need to know about the scheme changes will be published online on GOV.UK.
From 1 July, you’ll have the flexibility to bring previously furloughed employees back to work part time, you can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a scheme grant to cover any of their normal hours they are still furloughed for.
Also, for periods starting on or after the 1 July, the maximum number of employees you can claim for in any period cannot be higher than the maximum number you have claimed for in a previous period. For example, if your highest single claim for periods up to 30 June was for 100 people, you can’t claim for more than this number in later periods.
From 1 August, you will need to contribute towards the wage costs of your furloughed employees until the scheme ends on 31 October.
Making changes to your claims if you have over-claimed
If you’ve made an error in a CJRS claim that means you received too much money, you must pay this back to HMRC.
HMRC have updated the application system so you can tell them if you have over-claimed in a previous claim – when you apply you’ll be asked if you need to reduce the amount to take account of a previous error. Your new claim amount will be reduced to reflect this. You should then keep a record of this adjustment for six years.
If you have made an error in a CJRS claim and do not plan to submit further claims, HMRC are working on a process that will allow you to let them know about your error and pay back any amounts that you have over-claimed. HMRC will update guidance and keep you informed when this is available.
Protect yourself from scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to firstname.lastname@example.org and texts to 60599.
Coronavirus (COVID-19) – Self-Employment Income Support Scheme (SEISS)
HMRC webinar covers the aim of the scheme, who can apply, how much may be claimed, applying for the scheme, what happens after applications are made, and other support available.
Coronavirus Job Retention Scheme – How to make a claim
HMRC webinar guides you through making a claim, including the essential information you need, what to do before you make your claim, calculating and processing your claim.
Coronavirus COVID-19 Statutory Sick Pay Rebate Scheme
HMRC webinar providing an overview of the scheme, looks at who can claim, when to start paying SSP, employees you can claim for, making a claim, keeping records, and more.
Construction Industry Scheme VAT domestic reverse charge
The introduction of the Construction Industry Scheme VAT domestic reverse charge will be postponed yet again, this time until 1 March 2021. When this scheme does start, there will be an additional requirement that the end client in the supply chain makes a notification of its status in writing.
This pushes the scheme back five months from the previous start date of 1 October 2020. It is the second time the new regime has been delayed, having initially been scheduled to come into force last October.
Bounce Back loan scheme
Loans of between £2,000 and £50,000 will be available interest-free for the first 12 months with a low rate of interest being charged thereafter. The amount of borrowing businesses are able to access under the scheme will be 25% of turnover, up to a maximum of £50,000. The loans will be 100% guaranteed by the Government and be repayable over a period of up to six years.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to larger businesses affected by coronavirus (COVID-19).
Capital Gains Tax – Payment for property disposals
From 6 April 2020, any UK resident disposing of a UK residential property and any non-UK resident disposing of UK residential and non-residential property must report and pay the Capital Gains Tax within 30 days from completion using a new online service accessible from GOV.UK.