April 2020

Woman hands with pile of toilet rolls, pandemic panic

From Next Monday, Small Businesses Will Now Have Access To Loans Of Up To £50,000

Chancellor Riski Sunak announced the launch of a new ‘bounce back’ emergency loan scheme for small businesses, which will offer 100% guarantees on emergency loans.

The government will pay interest on the loans, that are worth 25% of the businesses’ turnover, in the first 12 months.

It comes after the Chancellor stated last week stated that there would be no change to the 80% government guarantee for the Coronavirus Business Interruption Loan Scheme (CBILS).

Rather than modify the existing CBILS, the chancellor has now introduced the new measure in an effort to offer further support to SMEs amid the ongoing pandemic.

Wages For Furloughed Employees Are Now Being Paid Through The Coronavirus Job Retention Scheme.

Payments for claims made on Monday 20 April will be in employers’ bank accounts by tomorrow (28‌‌ April).

If You Have Already Made A Claim

Don’t worry if you haven’t received payment yet – it takes six working days from when you claimed. Please don’t call HMRC to chase payment as they won’t be able to update you before the six working days have ended.

You don’t need to do anything to receive payment. It will automatically be sent to the bank account you nominated in your claim.

Please retain all records and calculations for your claims in case HMRC need to contact you about them in future, as HMRC continue to check claims made through the scheme.

If You Have Not Yet Made A Claim

You can still claim online for a grant for 80% of your furloughed employees’ salaries, up to a maximum of £2,500 per employee, per month. You will receive the funds six working days after you claim, provided your claim matches records that HMRC hold for your PAYE scheme.

Please read all the available guidance before you apply. To find this, go to GOV‌.UK and search for ‘Coronavirus Job Retention Scheme’.

HMRC will check claims made through the scheme and will act to protect public money against anyone who makes a dishonest claim.

Please continue to keep your furloughed employees informed and ask them not to contact HMRC directly – HMRC will not be able to provide them with any information.

You can now claim online for a grant for 80% of your furloughed employees’ salaries, up to a maximum of £2,500 per employee, per month, through the Coronavirus Job Retention Scheme.

This scheme will be open until the end of June 2020.

Before You Make A Claim:

  • please read all the available guidance on GOV.UK before you apply
  • gather all the information and the precise calculations you need before you start your application– if you have a payroll provider, they will be able to help you with this
  • you can find out more in the calculation guidance where you can access a claim calculator – this will allow you to check your claim for most employees who are paid the same amount each pay period
  • access the simple step-by-step guide for additional help.

After You’ve Made A Claim:

  • keep a note or a print-out of your claim reference number – you won’t receive a confirmation SMS or email
  • retain all records and calculations for your claims, in case HMRC need to contact you about them
  • expect to receive the funds six working days after you apply, provided your claim matches records that HMRC hold for your PAYE scheme – please do not contact HMRC before this time
  • to receive payment by 30‌‌ April, you will need to complete an application by 22‌‌ April
  • please ask your furloughed employees not to contact HMRC directly – they will not be able to provide them with any information on individual claims.
    • Please only call HMRC if you can’t find what you need on GOV‌.UK – this will leave their lines open for those who need their help most.

 The eligibility date has changed from 28 February to 19 March 2020

  • employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.

How To Claim

  • the online claim service will be launched on GOV.UK on 20‌‌ April 2020– please do not try to access it before this date as it won’t be available
  • the only way to make a claim is online
  • you can make the claim yourself even if you usually use an agent
  • claims will be paid within 6 working days
  • HMRC cannot answer any queries from employees – you will need to raise these with your employer.

Information You Will Need Before You Make A Claim

  • a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
  • be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
  • the following information for each furloughed employee you will be claiming for:
  • Name.
  • National Insurance number.
  • Claim period and claim amount.
  • if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
  • if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.

If You Want An Agent To Act For You

Please note:

  • agents authorised to act for you on PAYE matters can make the claim on your behalf using their ID and password
  • you will need to tell your agent which UK bank account you want the grant to be paid into, in order to ensure funds are paid as quickly as possible to you.

You should retain all records and calculations in respect of your claims.

HMRC will assess eligibility for the grant based on total income and trading profits.

HMRC will use the figures provided on tax returns for the total trading income (turnover), then deduct any allowable business expenses and capital expenditure.

HMRC says it will not make deductions from trading profits for any losses carried forward from previous years, or for an individual’s personal allowance.

The guide provides examples of how to calculate total trading income in each of the tax years 2016/17, 2017/18 and 2018/19 and work out the average trading profit.

Total income is the total of income from earnings, trading profits, property income, dividends, savings income, pension income and miscellaneous income including social security income.

An example is provided showing that even if an applicant made a loss in the tax year 2018/19, they would still be eligible for the grant if their average trading profit for the three tax years met the criteria.

Guidance How HMRC works out total income and trading profits for the Self-employment Income Support Scheme

The funding includes £360m allocated directly from government departments to charities providing key services and supporting vulnerable people during the crisis. There is £370m for smaller charities, including through a grant to the National Lottery Community Fund, aimed at supporting local organisations delivering food, essential medicines and providing financial advice.

In addition, the government will match donations to the National Emergencies Trust as part of the BBC’s planned Big Night In fundraiser planned for 23 April, pledging a minimum of £20m.

If you’re eligible for the scheme, there are things that you can do now to be ready when the system is up and running later this month.

You’ll Need To Provide The Following To Make A Claim:

  1. PAYE reference number
  2. The bank account number and sort code you’d like HMRC to use.
  3. The name and phone number of the person in your business for HMRC to call with any questions.
  4. Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).
  5. The name and National Insurance number for each of your furloughed employees.
  6. The total amount being claimed for all employees and the total furlough period.

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf, so please speak to them now.

However, if you use a file-only agent (files your RTI return but doesn’t act for you in other matters), they won’t be able to make a claim for you and you’ll need the information listed above from them to make the claim yourself.

Please Do Not Try To Access The Online System Yet As It Is Not Available.

Over The Weekend HMRC Published An Update To The Coronavirus Job Retention Scheme. What Key Issues Does It Clarify?

  • Employees can start a new job when on furlough. The guidance does say it has to be allowed under the old employment contract but you can waive this requirement.
  • You can reclaim 80% of compulsory commission from HMRC plus basic salary. This only refers to commission from past sales as furloughed employees cannot be completing new sales when on furlough, i.e. That cannot be working for you.
  • The 80% does not include non-monetary benefits.
  • Company directors can be furloughed but only perform statutory duties for the company, not normal work.
  • Employees can be furloughed multiple times, i.e. They can be furloughed, brought back to work, then re-furloughed.
  • You must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep a record of that written notification for five years.

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.

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.

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

The repayment will cover up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either:

  • have coronavirus
  • cannot work because they are self-isolating at home

Employees do not have to give you a doctor’s fit note for you to make a claim.

Who Can Use The Scheme

The scheme can be used by employers if they:

  • are claiming for an employee who’s eligible for sick paydue to coronavirus
  • had a PAYE payroll scheme that was created and started on or before 28 February 2020
  • had fewer than 250 employees on 28 February 2020

The scheme covers all types of employment contracts, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

We will let you know when the scheme will end.

Connected Companies And Charities

Connected companies and charities can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020.

Records You Must Keep

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
  • details of each period when an employee could not work, including start and end dates
  • details of the SSP qualifying days when an employee could not work
  • National Insurance numbers of all employees who you have paid SSP to

You’ll have to keep these records for at least 3 years following your claim.

According to Sky News the above scheme has been extended to small and medium sized businesses which have experienced financial difficulty during the Covid-19 pandemic.

Changes:

  • Lenders will no longer be able to request personal guarantees for loans under £250,000.
  • Operational changes have been made so that loan approvals are speeded up
  • A Covid Large Business Interruption Loan Scheme has been set up; this covers companies with a turnover between £45m and £500m. They can apply for loans of up £25m.