Following the government announcements our team in Charity Business Services has provided information below that may be of assistance to your organisation.
Job Retention Scheme
Recent changes to the Job Retention Scheme:
From 1 July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked. From this date, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June.
From 1 August 2020, you will be asked to contribute towards the cost of your furloughed employees’ wages.
- On the 1st of each month for the next three months key changes come in around what you can claim and what you need to pay your employees.
- Instead of a minimum three week furlough period it is now one week, but each claim has to be made up to the month end date, not the tax month.
- The most recent announcement is the introduction of the job retention bonus - which states that any employer who brings furloughed workers back and continuously employs them up to the end of January 2021 will receive a one off payment of £1,000 for each employee.
- The employees must be earning above the lower earnings limit, which is £520 per month on average between 1st November 2020 and the 31st January 2021
More information will be released soon, and payments are expected to be paid in February 2021.
Find out more information on how the Coronavirus Job Retention Scheme is changing.
What is the Job Retention Scheme?
The Job Retention Scheme only applies to employees who have to be laid off or would be made redundant during this situation. Employers will need to check employment contracts to make sure there is reference to the employees being ‘furloughed’, if it does not state this then the contract may need to be changed and the employees communicated with.
- Employees who are ‘furloughed’ would not be doing any work for the organisation at this time, they are in effect on ‘gardening leave’ so this does not apply if employees are working from home.
- Any employer with a UK payroll and a UK bank account will be able to claim, but you must have been on your employer’s PAYE payroll before or on 19 March 2020 and notified to HMRC on an RTI submission on or before 19 March 2020.
- If you 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 your employer prior to 19 March 2020, you can also qualify for the scheme if your employer re-employs you and puts you on furlough.
- You can be on any type of contract, including a zero-hour contract or a temporary contract. You can be furloughed under the scheme if you are a foreign national.
- There is guidance on how to calculate the reclaim for hourly paid staff; it is the higher of either the same month’s pay this time last year or the average pay over the 2019-20 tax year. If they have not been employed for 12 months then it is the average pay over the time they have been employed.
- The 80% can be reclaimed back to the 1 March and is expected to continue for at least three months (to be extended if necessary), but is capped at £2,500 per month per employee.
- The portal is due to open on the 20 April with HMRC making payments within 6 working days, but this is not guaranteed as there will be unprecedented demand for the service. HMRC will require the details of the employees who have been furloughed as well as their earnings.
- Employers can top up the salary by the remaining 20% if they choose.
Read the detailed guidance: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
Furloughed Leave for more than 20 employees
The government has published further information on furloughed leave, indicating if 20 employees or more are due to be furloughed, then employers may need to engage collective consultation processes. As the government guidance makes specific reference to this there is an increased risk that employees could claim a protective award for failure to consult where 20 or more dismissals were contemplated. Where 20 or more employees are involved employers are also legally required to complete and submit an HR1 form to notify the state.
Payroll Processing – Furloughed Employees
There is a recommendation that any employees who are being furloughed should be paid on a separate line on their payslips. This allows clarity for the employee as well as assistance when making a claim through the portal. If you could please ensure you let us know if you are furloughing your employees, who it affects and from what date as well as if you intend to pay the 80% or 100%. This will ensure we have the correct information and calculations. The Job Retention Scheme covers employes on all types of contract; part-time, full-time, flexible or zero hours. Employer national insurance and auto enrolment pension scheme contributions can be claimed for through this scheme. If an employer pays the top up of 20%, then the associated Employers NI and pension must be paid by the employer and cannot be reclaimed.
Income received by an organisation under this scheme must be included in the calculation of taxable profits for income tax and corporation tax purposes. Employment costs can be deducted as normal when calculating taxable profits for income and corporation tax purposes.
Wrigleys Solicitors has published extensive guidance on employment law and furloughed leave https://www.wrigleys.co.uk/news/covid-19/
Statutory Sick Pay (SSP)
As previously mentioned in earlier correspondence, employees who are self-isolating or are off due to the Coronavirus will be entitled to SSP from day 1 of the absence, and employers can reclaim 14 days of the SSP costs from HMRC. There is still no guidance about how this reclaim will happen, so we advise employers to request any employee calling in sick due to the Coronavirus also request the employee to email the details over. Employees can also obtain a digital self-isolation note from https://111.nhs.uk/isolation-note/ to pass to employers as evidence. If any employees are not eligible to be paid SSP through the payroll they can make a claim for Universal Credit, or Employment Support Allowance.
Emergency Volunteer Leave
There is a new statutory right for workers to take emergency volunteer leave to help support essential health and social care service, under the Coronavirus Act 2020. This gives employees the right to take unpaid leave (a compensation fund may compensate volunteers for loss of earnings) in blocks of two, three or four weeks. There are a number of associated requirements with this right please let us know if you require further information.
Support for Retail, Leisure and Hospitality Businesses
The government have announced there will be cash grants for businesses in the retail, hospitality and leisure sectors of up to £25,000 per property dependant on their rateable value. Properties that will benefit will be wholly or mainly being used:
- As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- For assembly and leisure
- As hotels, guest and boarding premises and self-catering accommodation
Your local authority will write to you if you are eligible for this grant, if you have any queries you will need to contact your local authority directly.
There will also be a business rates holiday for this sector for the 2020/21 tax year, again the local authority may need to re-issue your council tax bill and this will be done as soon as possible.
Support for nursery businesses that pay business rates
There will be a business rates holiday for nurseries for the 2020-21 tax year. Properties that will benefit will be:
- Occupied by providers on Ofsted’s Early Years Register
- Wholly or mainly used for the provision of the Early Years Foundation Stage
The local authority will apply this to your next council tax bill.
Support for businesses that pay little or no business rates
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates due to small business rates relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Most of the North East local authorities now have the online application active on their websites. If you have not been contacted directly and feel you are eligible head over to your local authority website and complete the application form.
Coronavirus Business Interruption Loan Scheme
A new temporary scheme delivered by the British Business Bank will launch this week to support small and medium sized businesses to access bank lending and overdrafts.
- The government will provide lenders with a guarantee of 80% on each loan to give lenders confidence to continue to provide finance to SMEs.
- Businesses can access the first 12 months of that finance interest free, as the government will cover the first 12 months of interest payments
- There are 40 accredited providers in all, all the major banks will offer the scheme once it has launched
- You are eligible if
- Your business is UK based and your turnover is no more than £45 million per year
- Your business meets other British Business Bank eligibility criteria
- To access this Scheme you should talk to your bank or finance provider
Support for businesses through deferring VAT and income tax payments
- VAT payments will be deferred for 3 months, this will apply from the 20 March 2020 until 30 June 2020.
- This is an automatic offer with no applications required.
- Businesses will not need to make a VAT payment during this period.
- Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period
- VAT refunds and reclaims will be paid by the government as normal
Support for businesses paying tax: Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time to Pay Service. These arrangement are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you have missed a tax payment or you might miss your next payments due to COVID-19 please call HMRC’s dedicated helpline on 0800 0159 559. If you are worried about future payments please call them nearer the time
Further information for employers, employees and businesses can be found at the following sites:
Please note Charity Business Services currently has limited capacity to reply to customers individually but will do our best to come back to you as soon as we can.