People Matters Update 23rd March
This bulletin concentrates on the changes this week to support you and your staff at these difficult times, so we all come out of this with businesses, employed and hopefully not to financially affected.
The Coronavirus Job Retention Scheme
This means the government will guarantee a proportion of the salaries of millions of people, if you, the employers keep them on your payrolls rather than laying them off.
The idea of the scheme is that the government will pay up to 80 per cent of wages for people who are subject to PAYE, i.e. not self-employed, and are at risk of being laid off due to the C-19 pandemic.
As an employer, you will be able to apply to HMRC for payments of up to £2,500 per worker per month.
The scheme will initially be open for three months, but it will be extended if required. Claims will be backdated to 1 March 2020 and is open to staff employed by you on 28th February.
They are aiming to have the scheme up and running before the end of April.
To claim under the scheme, you will need to:
- Designate your affected staff as ‘furloughed workers’. This means that they will need to be told this is happening in advance. It’s classed as changing their employment status and therefore it is subject to employment law so it may be subject to consultation and negotiation;
- The employer will then submit information to HMRC telling them which staff have been “furloughed” and their earnings, through a new online portal. HMRC will soon advise on what other details will be needed.
- HMRC will reimburse 80% of “furloughed workers” wage costs, up to a cap of £2,500 per month.
As we have said, the systems are not set up yet. However, if you need short-term cash flow support, you could benefit from the VAT deferral and you might also be eligible to apply for a Coronavirus Business Interruption Loan.
There will be support for renters, tax relief for those of you who are self-employed and increases in universal credit payments to help ease the load.
As and when we hear more, we will keep you advised.
The next quarter of VAT payments will be deferred so you don’t need to make VAT payments until the end of June 2020. You will then have until the end of the 2020-21 tax year to pay anything from the deferral period
You don’t need to apply for it, the deferral applies automatically. Speak to your accountant for better advice.
Income Tax payments
Under the Self-Assessment system any Income Tax payments due in July 2020 will be pushed back to January 2021 and Self-Assessment payments due on 31 July 2020 are being pushed back to 31st January 2021. This is also automatic and no penalties or interest for late payment will be made during the deferral period.
Self-employed people can now access full universal credit at a rate, which is the same as statutory sick pay.
Cash grants and Business Rates
- No rates will be payable for the 2020-2021 tax year for businesses in retail, hospitality or leisure.
- If you fall into those sectors and your rateable value is between £15,000 and £51,000k, you will also receive a grant of up to £25,000 per property.
- Business that get small business rates relief, including those above will receive a grant of £10,000.
Coronavirus Business Interruption Loan Scheme
- From Monday the Coronavirus Business Interruption Scheme commences delivered by lenders that partner with the British Business Bank, this includes all the major High Street Banks.
- Grants are available for businesses with turnover of no more than £45 million and you obtain up to £5 million. You are still liable for 100% of the loan, but there is no interest for the first year.
Mortgage and rent holidays
Mortgage holders can apply for a three- month payment holiday. You will still owe the amounts that you don’t pay, and interest will continue to be charged on the amount they owe, it’s basically tagged on at the end of your mortgage.
Tenants who rent their properties can apply for a three-month payment holiday from their landlord and no one can be evicted from their home or have their home repossessed over the next three months.
Businesses that have insurance cover for both pandemics and government-ordered closure should be covered. Advice to avoid pubs, theatres, etc., is enough to make a claim if all other the terms and conditions are met. You should check the terms and conditions of your policies because they differ so much – seek better advice from our insurance broker.
Statutory Sick Pay (SSP)
- If you’re a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate – your accountant will advise whether that is a good thing to do.
- If you do, the government will refund your company £94 per week for 2 weeks.
- The government is also refunding SSP for staff of businesses with less than 250 employees for up to 14 days.
If you need us please e-mail us at email@example.com and we will be happy to help, we are finding it easier to call you back than receive calls at the moment.
Stay safe everyone, we are off to self-isolate.
Niel, Yvonne, Sam, Jen and Alex
We are People Matters, because your people matter.