PIXIE PAYROLL Blog

The last few months have been so confusing & unsettling and with so much news coming at us all the time, sometimes it can be hard to remember where we are. So for this month’s blog, we thought a summary of the current situation with regard to Coronavirus support schemes would be useful.

Job Retention Scheme (Furlough)

This is now up and running and as many as 8.4 million employees have had 80% of their salary (up to £2,500) paid by the government. Although the scheme will run until October, it is expected that some employees will be able to start returning to work as businesses reopen in the coming weeks and The Chancellor has indicated that, from August, he would like businesses to start paying more of their employees’ salaries and the scheme will soon close for new applications.

Self-employed Income Support Scheme

This is now open for the self-employed to claim 80% of their average monthly profits over the last 3 years and 2.3 million people have claimed so far. To be eligible, a tax return for 2018/9 has to have been submitted and the majority of income must have been derived from self-employed work. The grant is paid in a lump sum and although there has been some discussion about the scheme being extended, there is no firm information yet.

Business support

There are 3 key schemes currently in operation to support businesses of all sizes through the crisis.

Two grant schemes are administered by local authorities and are aimed at small to medium sized businesses. The Business Grant is for businesses that pay Business Rates and here in Cornwall, the Council has written to all businesses who are eligible and invited them to apply. The Small Business Support Grant is for businesses that haven’t already received support but still need help. This page on the Cornwall Council website has some useful information and link on these schemes.

Larger businesses can apply for a Large Business Interruption Loan through their bank or other approved lender. Very large businesses – those turning over more than £250 million -can apply for up to £200 million. Those turning over more than £45 million but less that £250 million can apply for up to £25 million. These are clearly huge sums, are loans rather than grants, and are a specialist support vehicle for large businesses and employers. More information on the loan scheme can be found here.

Getting back to normal

Whilst getting completely back to normal may take some time, if ever, there are signs that something like normal life might be returning. In England, we can now travel further for exercise and we can meet up with people outside our household in the open air. It is expected that there will be a further relaxation of these rules soon. Some schools will be reopening for some year groups from 1^st June and that day will also see open air markets and car showrooms reopen. All other non-essential retailers can reopen from 15^th June providing social distancing measures are in place.

All of this means people will be returning to work which will impact on the management of the businesses’ payroll scheme so if you are an employer who is planning to reopen, get in touch and we can help you through the process.

Sadly, it might be the case that not all businesses are able to reopen and not employees will have kept their jobs. We can also help businesses manage the redundancy process in the most efficient way possible to minimise the stress for all concerned.

The last few weeks have seen us having to adjust to new ways of living and working that we’re still getting used to. We know from speaking to our clients that managing a team of employees who are either working from home or who have had to go on furlough can be really tough.

So for our blog this month, we thought we’d look at the different ways you can keep in touch with your employees and the rules around furloughed staff.

Not many of us had heard of Zoom before the lockdown started but now it seems like everyone’s using it; it was even used in Parliament this week for Prime Minister’s Questions. If you have employees who are still working but who are working from home, holding regular remote meetings are really important. They can obviously help with the day to day running of the business but they’re also good for supporting peoples’ mental health

Keeping in touch with your employees who are working from home is really important and video conferencing a really good tool for holding remote meetings for both small and large teams. Staying in touch is obviously really important to keep the business running but it can also be vital for peoples’ mental health – staying in touch, keeping the office banter going and talking about each other’s lockdown experience is beneficial to all.

Zoom isn’t the only tool that’s good for this; you can try Skype, Group Facetime or WhatsApp or Google Meet.

In between the conference calls, you can have more ad hoc contact by setting up a WhatsApp group chat or Facebook Messenger chat or even a closed group on Facebook.

If you have put your employees into the Coronavirus Job Retention Scheme, i.e. furlough then the rules say they can’t do any work for you at all. But that doesn’t mean you can’t keep in touch with them and in fact, regularly checking in with them is really important.

Each person will react differently to being furloughed. Some will see it as a great opportunity to spend more time with the family and get those jobs done around the house. Others will become incredibly anxious about the future and may even believe furlough is the first step to redundancy.

Staff in the first group may not need that much contact; perhaps just a weekly email to let them know how things are going and the plans that you’re putting in place for reopening the business. Staff in the second group will need more; at the very least a weekly phone call or video call and it would be worth being on the look-out for clues that they need more mental health support.

These are unprecedented times but it looks like we have a way to go yet until life can get back to normal. In fact, it might change the way we work for good, so getting to grips with virtual working tools now will stand your business in good stead for the future.

A new tax year has begun.

In amongst all the chaos and uncertainty of coronavirus, we’ve moved into a new tax year almost unnoticed. So here’s a quick summary of the new minimum wage rates that now apply.

Personal allowances and thresholds haven’t changed this year so the starting point for taxation remains at £12,500 and the higher rate threshold is still £50,000. Bear in mind these are the current rates for England & Wales, there is a slightly different taxation regime in Scotland which we covered in our September blog here.

The National Living Wage for everyone over 25 years has increased to £8.72 per hour. This means that someone working 40 hours per week will see an increase of just over £1,000 per year in their wages.

The National Minimum wage applies to everyone under 25 and the rates are:

Year	21 to 24	18 to 20	Under 18	Apprentice
Rate applicable for 2020/21 tax year	£8.20	£6.45	£4.55	£4.15

Get in touch if you need any help with the new rates or support in running your payroll during these difficult times.

As I write this, the Chancellor Rishi Sunak is still speaking so we think some of the details will need to be clarified but he has just announced the long-awaited details of his support for the self-employed during this coronavirus crisis.

Anyone who submitted a self-employed tax return for the 2018/2019 tax year and whose trading profits were less than £50,000 will be able to claim a taxable grant of 80% of their average monthly profits over the last three years up to a maximum of £2,500. They must have made a majority of their income from self-employment and following a question from the press, if someone hasn’t been self-employed for that long, the figure will be calculated based on profits for however long they have been trading.

Anyone who has become self-employed recently so didn’t submit a 2018/2019 tax return aren’t going to be included in the scheme and so will have to reply on the measures around Universal Credit as previously announced. Anyone who should have submitted a return before the deadline in January now have four weeks to get their return in to be included in the scheme.

Self- employed people are allowed to continue doing business as well as being able to claim. HMRC will be getting in touch will all those who are eligible, and payments are anticipated in June, backdated to now, so they will get a lump sum payment in a few months time.

As always, please get in touch if you have any questions but do bear with us as we are dealing with lots of queries from employers putting employees on furlough as well as individuals not sure what to do in the current situation.

Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

Eligibility

All UK businesses are eligible.

How to access the scheme

You will need to:

• designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
• submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Support for businesses through deferring VAT and Income Tax payments

We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility

All UK businesses are eligible.

How to access the scheme

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 to 2021 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.

Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Support for businesses who are paying sick pay to employees

We will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

• this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
• employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
• employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
• employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
• eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
• the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

Eligibility

You are eligible for the scheme if:

• your business is UK based
• your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

Support for retail, hospitality and leisure businesses that pay business rates

Business rates holiday for retail, hospitality and leisure businesses

We will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Eligibility

You are eligible for the business rates holiday if:

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the expanded retail discount guidance.

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000.

Eligibility

You are eligible for the grant if:

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are 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

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Support for nursery businesses that pay business rates

We will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Eligibility

You are eligible for the business rates holiday if:

• your business is based in England

Properties that will benefit from the relief will be hereditaments:

• occupied by providers on Ofsted’s Early Years Register
• wholly or mainly used for the provision of the Early Years Foundation Stage

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the nursery discount guidance.

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 because of small business rate relief (SBBR), 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.

Eligibility

You are eligible if:

• your business is based in England
• you are a small business and already receive SBBR and/or RRR
• you are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.

The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

This scheme is being delivered through commercial lenders, backed by the British Business Bank.

Eligibility

You are eligible for the scheme if:

• your business is UK based, with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria

How to access the scheme

The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.

All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

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.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

Eligibility

All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.

How to access the scheme

The scheme will be available early in week beginning 23 March 2020.

We will provide information on how to access the scheme here shortly.

More information is available from the Bank of England.

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 arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Eligibility

You are eligible if your business:

• pays tax to the UK government
• has outstanding tax liabilities

How to access the scheme

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

If you’re worried about a future payment, please call us nearer the time.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.