COVID-19

HMRC have announced that their system for applying for the relief grants for furloughed workers opens on Monday 20th April.

They expect you to calculate the value of the average salary for the employees over the last 12 months.

If you are registered for PAYE you or your agent (RHJ if we process your payroll) can apply for you.

Employees do not apply.

From HMRC, they state:

How to claim
As you prepare to make a claim, please note:

• the online claim service will be launched on GOV.UK on 20 April 2020 – please do not try to access it before this date as it won’t be available
• the only way to make a claim is online – the service should be simple to use and any support you need available on GOV.UK; this will include help with calculating the amount you can claim
• you can make the claim yourself even if you usually use an agent
• claims will be paid within 6 working days; you should not contact us unless it is absolutely necessary – any queries should be directed to your agent, representative or our webchat service
• we cannot answer any queries from employees – they will need to raise these with you, as their employer, directly.

Information you will need before you make a claim
You will need to have the following before 20 April 2020:

• a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
• be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
• the following information for each furloughed employee you will be claiming for:

1. 1. Name.
   2. National Insurance number.
   3. Claim period and claim amount.
   4. PAYE/employee number (optional).

• if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
• if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.

If you want RHJ Accountants to apply for you

• You will need to tell us which UK bank account you want the grant to be paid into, in order to ensure funds are paid as quickly as possible to you.
• You should retain all records and calculations in respect of your claims.

Guidance on GOV.UK is being regularly updated via this link

Who can be furloughed?

Owner-managed businesses (Directors)
You will be furloughing yourself in the understanding is that you do no income generating work for the business. You can continue to run the business from a statutory perspective, for example preparing accounts and returns. Administration, operations and marketing are not permitted.

Employees
To claim you must designate employees as furloughed – paid leave while they cannot work.
Who it includes:

• Employees on any type of employment contract including zero-hours, flexible, part-time or fixed term
• Apprentices (make sure you follow the guidance on continuing apprentice training and NMW)
• Agency workers (including those employed by umbrella companies)
• Office holders (including company directors) – but only on their PAYE income
• Salaried members of Limited Liability Partnerships (LLPs).
• Limb (b) workers – ie those on PAYE not those who are self-employed
• Nannies and other domestic staff.

You do not need to furlough all of your employees.

You must furlough an employee for a minimum of 3 weeks.

Whilst furloughed staff can’t do any work for the employer that furloughed them, they can undertake training, work for other employers, work on a self-employed basis or as a volunteer.

Who can NOT be furloughed?

• Deemed employees – those subject to the off-payroll rules in the public sector. These individuals would have to claim based on the non-taxable salary extracted from their PSC.
• Workers engaged under a contract for services, ie sole traders being paid gross via an invoice. These individuals will have to claim under the self-employed support scheme.

Business Rates Relief Grants

• £10,000 for businesses in receipt of Small Business Rates Relief (SBRR) or Rural Rates Relief
• £10,000 for retail, hospitality or leisure businesses with a rateable value of £15,000 or less
• £25,000 for retail, hospitality or leisure businesses with a rateable value of between £15,000 and £51,000

** For anyone falling under the Sheffield local authority there is now an application process – follow the link https://www.sheffield.gov.uk

If you are outside of Sheffield or unsure, please use the link here to check which local authority you fall under https://www.gov.uk/find-local-council

Eligibility:

• One grant per business property
• Properties occupied for personal use are not eligible
• Retail, leisure and hospitality grants are only available to all businesses that receive the Expanded Retail Discount with a rateable value up to £51,000

Business rates holiday for retail, hospitality and leisure businesses
There will be 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 and be 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. Further guidance for local authorities is available in the expanded retail discount guidance.

Support for nursery businesses that pay business rates
There will be 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:

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

These measures are expected to support 95% of self-employed people (which includes partnerships).

What counts as self-employed?
A person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.

Are all self-employed people eligible?
It is available to you if you’re a self-employed individual or a member of a partnership and you meet all of these criteria:

• have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

What is the offer?
A new self-employed taxable grant to the value of up to 80% of trading profits, up to a maximum of £2,500 per month, for at least three months

• You’ll be able to claim these grants and continue to do business
• Your trading profits will be averaged up to last three years (2016-2019) depending on how long you have been in business
• To work out your average profit HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
• The scheme will be open for at least three months
• HMRC will contact eligible businesses – you can not apply for the scheme yet
• HMRC will invite you to apply online
• Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.
• You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
• It is open to all self-employed people who have submitted a Self Assessment for the 2018/19 tax year
• Those self-employed who are late submitting their 2018/19 Self Assessment have four weeks to submit

When will people receive money?
The scheme should be set up and making payments by early June 2020. HMRC will make payments directly into bank accounts. The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June 2020.

Can I keep working and receive the support

• Unlike the employee scheme, the self-employed can continue to work as they receive support.

Will I be taxed on this income?

• The grants will be taxable, and will need to be declared on tax returns by January 2022.
• Company owners who pay themselves a dividend are not covered.
• If you claim tax credits you’ll need to include the grant in your claim as income.

What if this does not apply to me?
The government is also providing the following additional help for the self-employed:

• deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
• grants for businesses that pay little or no business rates
• increased amounts of Universal Credit
• Business Interruption Loan Scheme

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.

HMRC will contact all individuals who are eligible and invite you to apply online and payments will only be made in June 2020 once you have been accepted.

If you are invited by HMRC and do not know your income please ask us and we can supply this information.

Important – Please remember that the grants will be taxable and will need to be declared on tax returns by January 2022. It will count as income and you will be taxed at the normal rates.

If you do not qualify as you’re a director please see our information on furlough leave which may benefit you, also note limited company accounts have no bearing on any grants for furlough or self-employed.

We at RHJ Accountants are here to support our clients in any way possible in accordance with HMRC. We understand these are unprecedented times and if we all stick together we will pull through. Please try to remain calm and let’s make sure we keep safe.

This week has been unprecedented for all of us. We know that every person, business owner or otherwise has been compromised by the COVID-19 outbreak in one way or another. We hope that all of you are safe and well. For those of you designated as key-workers, thank you for all that you are doing for the country.

We are managing enquiries as best we can while we all work remotely to enable us to continue with routine work and deadlines.

We will continue to share updates that we believe affect many groups but we can not make the calls we need to deliver solutions for everyone while we are receiving calls. We kindly ask that you email your accountant in the first instance who will reply by email or with a call, or if necessary, escalate the matter to the senior team for resolution.

We don’t want to create anxiety for you but we do need to be able to work on the solutions so that we can help as many people as possible.

From all of us, thank you for your understanding.

Update for the Self-Employed
The Government are expected to make a further announcement about support for people who are self employed tonight (Thursday 26th March). We will dedicate tomorrow’s email to their announcement and what it means. Please bear with us as we will need some time to process it and we may have to take time over the weekend to examine it to be able to answer all questions in enough depth .

Grants for businesses
Please note that the small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief will be allocated to you and you will be contacted by the Council if you are eligible. We do not yet know when this will be available other than the Government have said that local authorities will ‘receive the money in April’. We will update you if we hear more. Full details here.

RHJ Urgent notice to employers regarding payroll
Please note that payroll deadlines are still in place this week. You must email us with regards to payroll in order to close month end payments. We are working as usual to process all company payroll runs this week and support you where we can.

Update for the Self-Employed
As yet, no further detail has been released. The Government are expected to make a further announcement about support but have explained that the delay is due to what they describe as a very complex process. We will share what we can as soon as there is more information.

Salaries – 80% relief
Employers will be able to claim a grant of up to 80% of an employee’s pay up to a limit of £2,500 per month. The claim can be backdated to 1 March if employees have already been laid off.

To use the scheme employees must be designated as ‘furloughed workers,’ and be notified of this change. Although the language is new, that is the same as laying employees off. A business can do that if they have the right to do so in the employment contracts or, if not, with the agreement of the employees.

• In due course employers will need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
• The scheme is due to run until 31 May 2020 although this may be extended.
• There is no requirement for employers to pay the additional 20% to ensure that employees receive full pay.
• There will be a time lag between making these payments and reclaiming the money from the government. You can find information about the other support is available in the link.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

Red Owl are offering a support package for businesses – Click here to download the details

Sick notes and pay
Employees are required to get an isolation note if they have been told to stay at home. This link provides the note that is needed for payroll: https://111.nhs.uk/isolation-note/

Advice and support
If you have questions about absence, annual leave, redundancy, short-time working or lay off please get in touch with our HR provider Red Owl HR. As well as providing a fully outsourced HR service Red Owl HR offers ad-hoc advice and support to businesses who need help during these difficult times. Jo Roy’s contact details are jo.roy@redowlhr.com or you can call 07824 884 184.

Please find below

1. Information directly quoted from the Government advice
2. VAT – The FAQs we have been answering this week
3. Income Tax – The FAQs

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.

Source: Gov.uk

The VAT deferral period is given from the Government as a way to ease cashflow for business during these unprecedented times, the key thing to remember is you will have to pay this VAT owed.

Firstly, may we wish you all the best of health and hope that you are all safe in these strange times. While there is a lot of uncertainty around, I would like to assure you that we are continuing to operate and are on hand for your accounting throughout this period.

We are making some adjustments to the away we work however, the details of which are below.

RHJ takes the health and safety of its staff very seriously. We have issued health protection advice to all staff in line with current NHS guidance on COVID-19: Coronavirus which includes:

• appropriate infection control actions advice for staff on what to do should they become ill
• advice about self-isolation following contact with a confirmed coronavirus carrier or travel to a restricted area
• advice on work-related travel enforced remote working

to ensure that we can still provide a service to our clients.

Business continuity plan
The impact of the Coronavirus on employee sickness absence rates, public transport systems, suppliers and health services is complex and the Company’s response to this is outlined in full in our business continuity plan. We are confident that we will be able to continue to offer a full accountancy service to you during the pandemic.

Our staff have been advised on appropriate measures to take to ensure business continuity such as remote working and using Skype as an alternative for face to face meetings.

Our HR Consultancy, Red Owl HR have provided us with support on our business continuity plan and our response to client requests for information so that our business is protected and we have accurate information about the changing rights of workers at this time. If you need help managing staff issues you can contact Jo Roy on jo.roy@redowlhr.com for information.

Headlines and Government Updates – 19th March 2020

• IR35 reforms in the private sector delayed
• Statutory Sick Pay relief package for SMEs
• 12-month business rates holiday for all retail, hospitality and leisure businesses in England
• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank