Furloughing, Self Employed Grant, Miscellaneous Updates

Furloughing Employees

Placing an employee on ‘furlough’ is a way of temporarily sending home workers as there’s no work for them but they remain, inactive, employees of the employer, ready to be called up again at a later stage.

80% of average wage for 2019/20 with tax and national insurance (NI), statutory minimum pension deducted in the normal way as a wage would be. Employer NI and statutory pension contributions need to be made as well.

If higher, the employee may be paid 80% the wage for the same period last year (i.e. March 2020 = March 2019) instead of the average.

Maximum claim is £2,500 plus employer national insurance and statutory pension payments per employee per month.

Employee cannot work for employer during this time.

Employee can work for other employer, unless contract states otherwise.

Directors may be included if they are employees and cannot work for the company whilst furloughed. It has been mentioned that statutory director duties “may” be exempt. Dividends will NOT be covered.

Grant will be claimable and repayable to employer starting by the end of April, in three week chunks.

Approval from employee must be provided to the employer in order to furlough. An example letter is shown on this external site https://www.iod.com/services/information-and-advice/resources-and-factsheets/details/Directors-and-the-Coronavirus-Job-Retention-Scheme

You need to follow normal employment law.

Anyone on the payroll after the 28 February 2020 cannot be furloughed.

A PAYE scheme must exist in order to reclaim and the employee must be on it (casual wages cannot be claimed)

If an employee has been made redundant due to virus limiting business income, this can be withdrawn and the employee can be furloughed instead, thus being eligible for the grant.

Reduced or limited hours is not furloughing. The employee must be unable to work for a three week period.

Those on SSP cannot furlough until the SSP period is over. SMP/SPP is similar.

Self Employed Grant

A grant of 80% of averaged profits from 2016/17 – 2018/19 up to £2,500 per month, for three months will be paid in July 2020 in one lump sum.

If you have not traded for all of the period, the average will be for the period of trade. If you have ceased to trade, you cannot claim the grant.

The business should have intentions to continue to trade after the pandemic is over.

2018/19 tax return must have been submitted by 23 April 2020 (this was due in January 2020).

Those starting after 5 April 2019 (i.e. they don’t have a 2018/19 tax return) cannot claim the grant.

Applications will be made in June/July 2020 by invitation. HMRC will contact you and invite you to submit your application online.

If the average profits are more than £50,000, you will not be able to claim.

If average profits are less than 50% of your total average income (pension, wages, dividends etc) then you will not be able to claim.

The grant will be taxable (and national insurance charged) as income in the normal way.

You do not have to stop trading during this time – the grant does not require you to stop working as a result of the virus.

Miscelleneous Updates

Although VAT is not payable, a VAT Return must still be submitted as normal during the period.

There’s no automatic right for companies to pay or submit Corporation Tax late. The ‘time to pay’ rules should be followed.

Companies House has relaxed the submission rules, allowing companies to submit statutory information such as accounts three months after the normal deadline. This needs to be applied for and is not automatic.

Additional relaxation of company rules in relation to meetings etc. is being rolled out in order to meet social distancing measures.

The government has also extended the right to carry forward unused holiday entitlement for up to two years for all employees unable to claim during this period.

Companies will not be forced into liquidation / insolvency for the duration of the emergency period.

There are no specific grants announced for property rental businesses though a three month payment holiday for mortgages may be available from lenders.

Evictions will be forbidden as a result of the virus for the length of the emergency.

The Derbyshire County Council £500 grant scheme has been overwhelmed with claims and is on a temporary halt.

Updates on grants from Chesterfield Borough Council – sending out application letters in early April. https://www.chesterfield.co.uk/2020/03/chesterfield-borough-council-update-on-grants-and-business-rate-relief-process/?utm_source=Business+News+March+4&utm_campaign=Business+News+March+4&utm_medium=email

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