ADVICE/ACTION NEEDED REGARDING COVID-19

FOR EMPLOYERS AND EMPLOYEES

VAT REGISTERED BUSINESSES AND SELF ASSESSMENT

 

Firstly, we hope you, your colleagues and family are all keeping well.

 

Today, the world is looking a little different for us all, with many working in very different ways to what we normally would.

 

DHB Accountants will move to homeworking in response to new Government advice issued that urges us all to minimise social contact to help and delay the spread of coronavirus (COVID-19).

 

We want to assure you that the priority is to continue to provide a high level of service and support” and it is important at this time for us all to try to continue with “Business as Usual” as much as possible and support each other during this strange and challenging time.

 

For information recently released from the Government furloughing of employees - the furlough eligibility start date has now been extended to 19 March and not 28 February, for further information from HMRC click on the link below.

 

https://www.gov.uk/government/news/furlough-scheme-cut-off-date-extended-to-19-march

 

Also, as a Sage Accountant Partner, for further Coronavirus information, please click on the links below, which may also help.

 

Sage Coronavirus Hub;

https://www.sage.com/en-gb/coronavirus/

 

UK Government Funding Tool;

http://desktophelp.sage.co.uk/coronavirus-funding/

 

Employment Allowance;

https://ask.sage.co.uk/scripts/ask.cfg/php.exe/enduser/std_adp.php?p_faqid=46435&p_pv=0

STATUTORY SICK PAY – COVID-19

 

As employers are aware, employees can get £94.25 per week Statutory Sick Pay (SSP) if they are too ill to work.  It is paid by the employer for up to 28 weeks.

 

If employees are staying at home because of COVID-19 employees can now claim SSP.  This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.

 

Under the current SSP rules, the first 3 days are waiting days and are therefore not paid and SSP is paid at £18.85 per day thereafter, but new rules introduced from 13 March 2020 due to COVID-19, the government are legislating for SSP to be paid from day 1, rather than day 4, of an employees’ absence from work (only if the absence from work is due to sickness or need to stay at home due to COVID-19.

 

SUPPORT FOR BUSINESS WHO ARE PAYING SICK PAY TO EMPLOYEES

 

The government have brought 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:

 

·         The 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 eligible (size employer determined by number of people employed as of 28 February 2020)

·         Employers will be able to reclaim expenditure for employees who have claimed SSP as a result of COVID-19.

 

 

·         Employers need to maintain records of staff absences and payments of SSP.  Employees will not need to provide a sick note but if evidence is required by an employer those with symptoms of coronavirus can obtain an isolation note from NHS 111 online, the same applies to those employees who live with someone who has symptoms.

·         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.

 

The rebate scheme is the process of being developed.

 

WORKERS WHO ARE SELF-EMPLOYED OR NOT ELIGIBLE FOR SSP – FOR INFORMATION

 

If an worker is not eligible for SSP – either self-employed or earning below the Lower Earnings Limit of £118 per week and they have been advised to stay at home because of COVID-19, they can now easily make a claim for Universal Credit or new style Employment and Support Allowance, they will need to go to www.gov.ukfor more information on this.  If any worker is eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, obviously COVID-19 related.

 

 

FURLOUGHED WORKERS

 

Furloughed workers are where an employer cannot cover staff costs due to COVID-19 and may be able to access support to continue paying part of your wage, to avoid redundancies.

 

If the employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker.  This means that an employee is kept on an employer’s payroll rather than being laid off.

 

To qualify for this scheme an employee should not undertake work for them while they are furloughed.  This will allow the employer to claim a grant of up to 80% of an employee’s wage for all employment costs, up to a cap of £2,500 per month.

 

HOW TO ACCESS THE SCHEME FOR FURLOUGHED WORKERS

 

An employer will need to:

 

·         Designate affected employees as “furloughed workers” and notify 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 then 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 and once we know how the reimbursement system works, we will pass on to our clients.

 

 

SUPPORT FOR BUSINESSES THROUGH DEFERRING VAT AND INCOME TAX PAYMENTS

 

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

 

VAT

 

For VAT, the deferral will apply from 20 March 2020 to 30 June 2020 – All UK businesses are eligible.

 

This is an automatic offer with no applications required. 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 31 July 2020 will be deferred until the 31st January 2021.

 

Again, this is an automatic offer with no applications required.  No penalties or interest for late payment will be charged in the deferral period.

 

 

 

SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

 

The new Coronavirus Business Interruption Loan Scheme supports small and medium sized business 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 small to medium sized businesses.  This scheme is being delivered through commercial lenders, backed by the British Business Bank.

 

ELIGIBILITY

 

You are eligible for this scheme if:

·         Your business is UK based with a 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.  All major banks are offering the scheme.  If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow.

 

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.

 

INSURANCE

 

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17u 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 encourage 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.

Services
  • Audit, Accountancy & Assurance Services​

  • Management Accounting

  • Business Planning & Finance

  • Tax Planning & Advisory

  • Probate and Estate Administration

  • VAT

  • Payroll & PAYE

News

Pension: Minimum contributions increased on 6th April 2019. Are you up to date?

 

Minimum wage rates are changing, see the new rates here.

 

Publications

2020/2021 Payroll newsletter: What you need to know.

 

Copyright DHB Accountants Limited © 2011


Registered to carry on audit work in the UK and regulated for a range of investment business activities and licensed to carry out the reserved legal activity of non-contentious probate in England & Wales by the Institute of Chartered Accountants in England and Wales.

DHB Accountants is a trading style of DHB Accountants Ltd. Details about our audit registration can be viewed at www.auditregister.org.uk under reference C002816854 and details about the firms probate registration can be viewed at www.icaew.com/probate under the same reference.