Good afternoon. Since the start of the lockdown in mid-March we’ve covered most business-related support in detail in our newsletters. Links to those can be found here, so we'll keep today's newsletter brief - just to catch-up on what’s happened this week.
Coronavirus Job Retention Scheme (CJRS)
The opening date for the application portal is now the beginning of next week (20th April) and we are ready to start entering details to claim furlough payments on behalf of clients.
The big news is that the government changed the 28th February cut-off date for employees to be eligible for the scheme if furloughed.
The guidance now says: You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
This means that the cut-off has been moved by three weeks AS LONG AS HMRC HAD RECEIVED AN RTI (Real Time Information) RETURN BEFORE 19TH MARCH, SHOWING THAT THE NEW EMPLOYEE HAD STARTED. This change will bring into the system some new starters that were previously excluded purely by accident of timing.
Company Directors (and Company Secretaries):
The CJRS rules for Directors have been updated for Directors being furloughed and states:
Quoted from here: Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose. Directors should not do any work to generate commercial revenue or provides services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).
So Directors can be furloughed, providing they only carry out statutory duties such as filing accounts and the Confirmation Statement etc. at Companies House. Answering general customer or supplier phone calls or emails, for example, are NOT considered statutory duties.
Some other clarification regarding who can and cannot be furloughed:
Apprentices can be furloughed in the same way as other employees and they can continue to train while they are furloughed.
Reduced hours employees cannot be furlough. They cannot work at all to be eligible for furloughing.
Self-isolating or ill employees are not considered to be furloughed but are eligible for Statutory Sick Pay. If, however, employers want to furlough employees for business reasons and they are currently off sick, they can do this. The employee should no longer receive sick pay and would be classified as a furloughed employee. If an employee becomes sick whilst furloughed, they can remain furloughed.
Shielding employees: Employees who are unable to work because they are shielding in line with public health guidance (or who need to stay home with someone who is shielding) can be furloughed.
Caring responsibilities: Employees unable to work because they have caring responsibilities (e.g. need to look after children) resulting from coronavirus can be furloughed.
Remember the paperwork:
Finally with CJRS, please remember the paperwork! The guidance is very clear stating: To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.
Sample letters can be found on the ACAS website here
Coronavirus Self Employed Income Support Scheme
The current timescale is HMRC will issue calculations of the potential payment and what sounds like an invitation to apply for payment under the scheme by the end of May. Payments will start to be made in June.
Please note the following:
You are only eligible if you:
have submitted your Self- Assessment tax return for the tax year to 5th April 2019
traded in the tax year to 5th April 2020
are trading when you reply to HMRC, or would be except for coronavirus
intend to continue to trade in the tax year 2020 to 2021
have lost trading profits due to coronavirus
The calculation will involve taking account of profits AND losses for the last three years and averaging them (look under How much you’ll get here).We feel it may work out unduly harsh for those who have started a business from scratch and incurred losses initially and for those who have invested heavily in equipment and claimed tax relief for the investment.
For anyone looking at Universal Credits the government has a calculator here that we understand has been updated to take into account the Coronavirus measures. This should help anyone to work out their eligibility.