The Coronavirus Job Retention Scheme (CJRS) was launched in March…
An update so far....
We’re continuing to get more info each day on the support announced by the government. Here’s the latest…
Statutory Sick Pay (SSP) claim
We have a full blog on this but here’s a brief recap, and some more up to date info!
- You can claim SSP from day 1 of sickness for Covid-19 sickness only: this includes anyone who has been told to self-isolate. The SSP claim is only for two weeks for employers, the employee can claim SSP as normal for the period of their sickness but the employer can’t reclaim any more than the original 2 weeks. You need to keep an eye on employment contracts though because if it states you get 6 weeks at full pay etc you MUST abide by this.
- Fit notes are all that is required for the leave, no sick note is required to qualify for SSP – unlike usual rules.
- Payroll software’s aren’t yet updated to pay sick pay from day one, so it has been suggested to enter the leave 3 days earlier so your day 4 starts the SSP (and is day 1 of sick leave). Software providers are looking to bring in updates but it’s not ready yet.
- Directors are not currently covered for this (or furlough) if they don’t hold an employment contract BUT Tax Faculty think that Directors may be able to claim SSP as they are on payroll and earn over the £118 per week needed to qualify. There’s currently a document being written which will be released in the next few days to cover this and we’ll share it too.
- If you, or your team aren’t eligible for SSP i.e. earning under £118 per week, then you need to claim ESA (Employee Support Allowance). To claim you need to claim through the job centre as normal. This again will be backdated to day 1 of sickness not day 8 which currently applies and you won’t be requested to attend an appointment at the job centre to process the claim.
- The reclaim element of SSP is available to all businesses with fewer than 250 employees on payroll as at 28 February 2020. The claim covers all employees on sick leave with Covid 19/self isolation but can’t be claimed for any other illness. We are uncertain how the claim will work at present – likely through a portal but you need to keep records of absence dates for each employee or now.
- All businesses are eligible to apply for this, the portal is in progress – HMRC have appointed staff from outside and internal departments to make this a priority.
- The portal is likely to request staff details and pay rates (likely this may be taken through RTI instead of manual upload). HMRC will then cover 80% of the payments the employer has made, no need for the employer to top this up to 100%.
- No work can be done at all, there were examples of people having phones transferred to them, answering emails, making payments for wages etc – they are all classed as working (even though small) so anyone doing that CAN’T be classed as being furloughed.
- The payment reclaim covers to £2,500 per employee per month, the legislation is saying that the 80% covers the cost to the employer, we believe that this now includes Employers NI and Employers Pension contributions.
- Directors are still a grey area, under company law a sole director can’t abdicate his duties to run the company, so this would be classed as working and can’t fall under furlough. Tax Faculty is pushing for this to be a priority area to be looked at by the government but its currently still up in the air.
- When putting a furlough payment onto payslips don’t put this in as hours paid as this may show less than NMW on the payslip, this should be added as a flat payment on the payslip. Bonuses, shift allowances and commissions aren’t covered in furlough its just basic working hours.
- Furlough payments will NOT need to be repaid by the employer this is a government scheme and they are covering all costs.
- If your business is looking to close i.e. making staff redundant and staff members are self-isolating, it would be worth claiming two weeks SSP, then furlough for the remaining weeks until closure. This can’t be done if the business will survive.
- The furlough payment will be classed as state aid but looking to be approved state aid and not de minimus.
- Agents can submit the claims on clients behalf.
- VAT returns due for payment on 7th April (Feb return), 7th May (Mar return), 7th June (May return) are the ones that are deferred, its to be one return per VAT registered entity. The liability for these are then due no later than 5th April 2021.
- Direct Debits can’t be stopped by HMRC, so if you want to take advantage of the deferment you need to cancel the DD before the payment is due. If the DD isn’t cancelled payment WILL be collected and there will be no refunds issued for this.
- Once DD’s are cancelled agents no longer have access to set DD’s back up, you’d need to do this yourself: the advice currently is to leave the DD cancelled until further notice as there’s a chance the deferment period may be extended if the situation continues or gets worse.
- You don’t have to take the deferment so if you want to pay your VAT bill then you can.
- VAT already on a payment plan will need to be updated by calling HMRC and agreeing a new plan.
- VAT returns need to be submitted on time, interest and penalties will still be issued unless you can cover a reasonable excuse.
- VAT refunds will be issued as normal.
- Self-Assessment is currently still only relating to the self-employed: it’s not looking likely that that will be extended further but if Directors do have July payments due it will be worth arranging a time to pay with HMRC, if that is in place no interest or penalties will be issued. If payments are just late they will be.
- HMRC have employed an extra 5000 employees to work on the time to pay line.
- Help for the self-employed has been put as a lower priority, this is because they assume most self-employed workers have another source of income (not sure where they get that theory) so they are working on the basis that they will be covered in one of the other reliefs and giving them additional help is unfair. This is still an area being looked at, but expect a change in coming days.
- Business rates holiday, looking at hospitality, nurseries etc. Rates bills should already have been issued by local authorities to cover the companies where this is applicable.
- Cash grants: looks to be open to all businesses, again the local authority will contact you direct, this is free and doesn’t need to be paid back.
- No help at the moment for businesses where there registered office and working environment is their home.
- CBIL loan, the government will cover the interest payments for the first 12 months.
HMRC have now added their help notices to the featured page on their home page: if you click the link, select Businesses and Other Organisations, then What the Government is doing to support businesses – this gives you a link to the help for businesses and employees and is being updated all the time so worth keeping an eye on it.
As always, if you’ve got questions feel free to ask the Blu Sky team.