(update as at 27 March 2020)
Based upon the current announcements by the government, we detail below the information currently available for employers and businesses. Full details of the guidance can be found on the following website links. These websites are updated regularly, following government announcements.
H M Revenue & Customs have a business support website for frequently asked questions and the link for this is as follows.
SICK PAY FOR EMPLOYEES
This is available to employers with less than 250 employees, as determined by the number of employees they employed as at the 28 February 2020. The new measures introduced are effective from the 13 March 2020. Employers will be able to claim up to two weeks Statutory Sick Pay (SSP) per employee as a result of COVID-19, and should maintain records of staff absences, although staff will not be required to provide a fit note (Sometimes referred to as a sick note) from their GP. An alternative fit note will be available through NHS 111 shortly
The payment to staff will be available from the first day and there will be no waiting period.
A scheme for refunding SSP payments to employers, is yet to be put in place.
Further guidance on SSP can be found on the following website link.
Those not eligible for Sick Pay such as employees earning below the Lower earnings Limit of £118 per week, can now make a claim for Universal Credit or Contributory Employment and Support allowance. This is also available to the self-employed.
Guidance was detailed in the Budget 2020 and can be found on the following website link.
Details regarding SSP have been expanded and applies to those who follow advice to stay at home, even if they are not sick themselves. If evidence is required to cover self-isolation or household isolation beyond the first 7 days of absence, then employees can get an isolation note from NHS 111 online.
JOB RETENTION SCHEME
If a business is unable to operate or has no work for its employees due to the coronavirus, then providing the employee agrees, he will become a furloughed employee. The government will fund grants to employers up to 80% of the furloughed employees monthly wage cost, up to £2,500 a month, plus the associated Employers National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, provided they keep the worker employed. The scheme will cover wages backdated to 1 March 2020. During this period the employee cannot undertake any work. The workers will still retain all employment rights during this period. The employees wages will still be liable to Income tax and national insurance, as well as automatic enrolment contributions.
If your employee does not wish to go on furlough, then redundancy or termination of employment can follow.
Eligibility for the scheme
Any UK organisation with employees can apply, including
- Recruitment agencies (agency workers paid through PAYE)
- Public authorities
You must have created and started a PAYE payroll scheme on or before the 28 February 2020 and have a UK bank account.
Employers can use a portal to claim for 80% of furloughed employees usually monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic employer pension contributions on that wage. Fees, commission and bonuses should not be included. This portal is still being designed by H M Revenue & Customs.
An employer can choose to top up an employees salary beyond this but is not obliged to under this scheme.
The following link, details an indication of how the scheme will work.
Full and part time employees
The employees actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.
Employees whose pay varies
If the employee has been employed for a full twelve months prior to the claim, you can claim the higher of either:
- The same months earnings from the previous year
- Average monthly earnings from the 2019/20 tax year.
If employed for less than twelve months, you can claim for an average of their monthly earnings since they started work. If they started in February 2020, use a pro-rata for their earnings so far to claim.
The position on whether this can be claimed by a company run by a single director is unclear and there is conflicting reports in the professional press upon this. As you need to apply for the grant and HM Revenue & Customs will review it before paying it, then at this stage, it is worth making the claim.
Employer National Insurance and Pension Contributions
All employers remain liable for associated Employer national Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees. This will be covered by a grant also, but the automatic enrolment contributions are limited to 3%.
Guidance has yet to be published regarding the claims for Employers National Insurance Contributions and minimum automatic enrolment employer pension contributions.
National Living wage/National Minimum Wage
Furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below the National Living Wage/National Minimum Wage.
To make a claim
The scheme is expected to be up and running by the end of April and the following details will be required.
- Your ePAYE reference number
- The number of employees being furloughed
- The claim period (start and end date)
- Amount claimed (per the minimum length of furloughing of 3 weeks)
- Your bank account number and sort code
- Your contact name
- Your telephone number.
You will only be able to submit one claim every three weeks, which is the minimum length an employee can be furloughed for.
Full details on the guidance can be found on the following links.
LAY-OFFS AND SHORT TIME WORKING
As an employer you can ask your staff to stay at home or take unpaid leave if there's not enough work. This is an area fraught with difficulty and would suggest you take legal advice before proceeding down this avenue. Further guidance can be found on the following website links:
If you have taken out a tax fee protection insurance policy with us you may be eligible to receive complimentary expert telephone advice on employment law, HR and health and safety matters:
Support for self-employed through the Self employment Income Support Scheme (SEIS)
The scheme will support self employed individuals, including members of a partnership, who have lost income due to Coronavirus.
The scheme will allow you to receive a taxable grant worth up to 80% of your trading profits up to a maximum of £2,500 per month for the next three months. The grant if you are found to be eligible will be paid directly into your bank account, in one instalment and it is anticipated this will be in June.
H M Revenue & Customs will contact you if you are eligible for the scheme and then invite you to apply online through the GOV.UK site.
To be eligible, you must have
- Submitted your self-assessment tax return for the year ended 5 April 2019. If you have not filed this, H M Revenue & Customs will allow late returns filed before the 23 April.
- Have traded in the current tax year 2019-20.
- Are trading when you apply, or would be except for Covid-19.
- Intend to trade in the tax year 2020/21.
- Have lost trading/partnership profits due to Covid-19.
- Your self-employed trading profits must be less than £50,000 and more than half of your income from self-employment. This is determined by one of the following conditions being true.
- having trading profits/partnership trading profits in 2018/19 of less than £50,000 and these profits constitute more than half of your total taxable income.
- Having average trading profits/partnership trading profits in 2016/17, 2017/18 and 2018/19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
If you started trading between 2016-19, HM Revenue & Customs will only use those years for which you filed a self-assessment tax return.
If successful, the grant will need to be disclosed on any claim for tax credits.
Details can be found on the following links.
Previous advice for the self-employed has been noted below.
You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
To support you with the economic impact of the outbreak and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.
It was announced in the budget support would be available, but it was announced on the 17 March 2020, this would be extended further. It is proposed there will be a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
A business rates holiday will be introduced for nurseries in England for the 2020 to 2021 tax year.
No action needs to be taken, as the local authority will reissue your bill automatically.
You can calculate the amount you will not have to pay, by following the attached link.
The guidance issued to the local authorities can be found via the following link.
Dorset Council has issued advice regarding business rates bills and the link is as follows.
SMALL BUSINESS GRANT FUND AND THE RETAIL, HOSPITALITY AND LEISURE GRANT FUND
Under the Small Business Grant Fund (SBGF) all businesses in England in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000 in line with the eligibility criteria as set out in paragraphs 15-21.
Under the Retail, Hospitality and Leisure Grant (RHLG) businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000 will be eligible for the following cash grants per property.
Eligible businesses in these sectors with a property that has a rateable value of up to £15,000 will receive a grant of £10,000, in line with the eligibility criteria as set out in paragraphs 22-27.
Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000, in line with the eligibility criteria as set out in paragraphs 22-27.
Businesses with a rateable value of £51,000 or over are not eligible for this scheme.
The eligibility criteria can be found on the following link.
To find your local authority, use the following link.
Guidance has been issued to the local authorities on administering the scheme as follows and pages 3 detail the person entitled to the grant and on pages 7 to 9 the information the authority will need to obtain.
SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS) FORMERLY KNOWN AS THE ENTERPRISE FINANCE GUARANTEE (EFG)
This will be available to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lenders normal requirements. CBILS will provide the lender with a government backed 80% guarantee.
Loans of up to £5 million will be supported and businesses will be able to access the first 12 months of that finance interest free, as the government will cover the first 12 months of interest payments.
However, the borrower, always remain liable for 100% of the debt.
To be eligible the small business must be
- UK based.
- Turnover of less than £45 million.
- Operate within an eligible Industrial sector.
- Have a borrowing proposal which if it were not for the current pandemic, would be considered viable by the lender.
Guidance on the British Business Bank can be found on the following website link:
SUPPORT FOR LARGER FIRMS THROUGH THE COVID-19 CORPORATE FINANCING FACILITY
Under the new Covid- 19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. All UK businesses are eligible. The scheme will be available in the week beginning the 23 March 2020. More information can be found at the following link.
IF YOU CANNOT MAKE TAX PAYMENTS
Self-Assessment tax payments
Income tax self-assessment payments due on the 31 July 2020, will be deferred until the 31 January 2021. This is automatic and no applications are required. No penalties or interest will be charged in the deferral period.
If you normally pay by direct debit, you should cancel this with your bank if you are unable to pay. Please do so in enough time, so that HMRC do not attempt to automatically collect.
All UK businesses can defer the payment of vat, and the deferral period that currently applies is from the 20 March 2020 until the 30 June 2020. This is automatic and no applications are required. Businesses will have until the 5 April 2021 to settle any liabilities that have accumulated during the deferral period.
If you normally pay by direct debit, you should cancel this with your bank if you are unable to pay. Please do so in enough time, so that HMRC do not attempt to automatically collect on receipt of your vat return form.
There is a new tax helpline available to business about paying their tax due. The number is 0800 0159 559. The opening hours are Monday to Friday 8am to 8pm and Saturday 8am to 4pm. The service will not be available on Bank Holidays. H M Revenue & Customs will discuss your specific circumstances, but you will need to hand the following.
- Your reference number
- The amount of the tax bill you're finding it difficult to pay and the reasons why.
- What you have done to try to get the money to pay the bill.
- How much you can pay immediately and how long you may need to pay the rest.
- Your bank account details.
Further detailed guidance can be found on the following website link.
Most commercial policies will not cover a pandemic or unspecified disease, such as Covid-19.
However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms of your policy). Businesses are therefore advised to check their policies.
If businesses have policies with cover for “unspecified notifiable diseases” then a claim may be able to be made. The government guidance is on the following link.
PROTECTION FROM EVICTION FOR COMMERCIAL CLIENTS
Commercial tenants in England, Wales and Northern Ireland who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until the 30 June.
This is not a rental holiday; commercial tenants will still be liable for the rent.
THE FOLLOWING BUSINESSES MUST REMAIN CLOSED
On the 23 March, the government provided guidance on businesses and premises which must close and supports the governments stance on staying at home. Details can be found on the following link.
GUIDANCE FOR UK BUSINESSES TRADING INTERNATIONALLY
Advice for UK businesses that export or deliver goods and services abroad has been issued. The Department for International Trade can support businesses by providing assistance with Customs authorities to ensure smooth clearance of their products and offering advice on intellectual property and other issues with business continuity. Details can be found on the following link.
COMPANIES HOUSE FILING EXTENSION
Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties. Companies will need to apply. Details can be found on the following link.