COVID-19

RHJ Coronavirus updates

31st March 2020 COVID-19 Update - Business Rates Relief Grants and Holidays

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.

27th March 2020 COVID-19 Update - Government Support Package for Self-Employed

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:

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.

26th March 2020 COVID-19 Update - Communicating with us

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.

25th March 2020 COVID-19 Update - Paying Employees

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.

24th March 2020 RHJ Coronavirus update - VAT & Income Tax

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

Check for updates here

VAT - The FAQs

What does the announcement mean?

It means that there are no VAT payments to HMRC from 20 March 2020 – 30 June 2020

Do I still have to file a VAT return?

All VAT returns must be filed by the due date so for example the quarter 1 February 2020 – 30 April 2020 is due to be filed no later than 7 June 2020, however the VAT owing is not paid until after 30 June 2020

Can I still reclaim VAT?

Yes you will reclaim VAT if you are on the standard VAT scheme as normal and this is deducted from your sales VAT on the VAT return to produce a VAT pay owing.

Do VAT refunds get paid?

All VAT refunds from a VAT return are paid by HMRC according to the normal conditions.

What happens after 30 June 2020 (the VAT deferral period)

All businesses have until 5 April 2021 to pay any VAT that was deferred, there is no late payment interest charged during this time.

Do I have to apply to HMRC?

No this is automatic, so no application required.

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.

Income Tax - The FAQs

What does the announcement mean?

If you have a 2nd payment on account due no later than 31 July 2020 this is now deferred and payable no later than 31 January 2021.

Do I have to apply to HMRC?

No this is automatic, so no application required.

Will I be charged interest?

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

Time to pay - What does it mean?

If you have outstanding tax liabilities and pay tax to the Government you can ask for this arrangement.

How do I 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.

What if RHJ file the tax return for 6 April 2019 - 5 April 2020? Will this affect any future payments on account?

Yes we recommend having the tax returns for the period filed ASAP and it may possibly reduce the future payments on account including the 2nd payment on account due.

20th March 2020

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

Emergency interim advice note on FURLOUGH LEAVE

Introduction

On Friday afternoon the Chancellor announced further measures to add to the package to help businesses. One of these elements which has caused a lot of discussion for all is something called Furlough leave

What is understood is that employers might claim back up to 80% of employee wages under the Job Retention Scheme.

This will allow all UK employers to access financial support to continue paying part of their employee’s salary for those employees who otherwise might have been let go in the crisis. This is the wording from the Government guidance.

All UK businesses are going to be eligible so that includes companies and sole traders employing people LLPs partnerships, charities etc.

How will it work?

At the moment there are more questions than answers but we will keep you as up to date about what this means for you as soon as we can.

This is what the Government says about how the scheme works. First of all it says:

“You’ll need to designate affected employees as Furloughed workers and notify your employees of this change” Change is subject to existing employment law and depending on the employment contract may need negotiation”.

HMRC will reimburse up to 80% of Furloughed workers wage costs up to a cap of £2,500 per month.

What you will need to do:

If looking to take advantage of the scheme you will need to designate affected employees as Furloughed workers and notify them of this change.

subject to employment law and you may have to negotiate it”.

This is a key factor.

Changing employee’s status remains subject to existing employment law and depending on their contract may be subject to negotiation.

We know that HMRC are setting up a portal for claims. As yet it is not available. We along with the rest of the country will be listening for updates from the Government and will keep you updated on key matters as often as we can.

Please keep checking this link for updates:

This link includes details of the statutory sick pay scheme and all the other support available for businesses.

How do employers claim?

Once employees have been designated as Furloughed workers, the next thing to do and, this is from the guidance: “you will need to submit information to HMRC about the workers that have been Furloughed and about their earnings through a new online portal”. The portal is yet to be set up. It will likely require major programming probably to set it up.

How much can be claimed?

It goes on to say that HMRC will reimburse up to 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 reimbursing employers – existing systems are not set up to facilitate payment to employers.

So HMRC will reimburse up to 80% of Furloughed workers wage costs up to a cap of £2,500. It’s not clear if that’s the maximum wage and workers get 80% of that (i.e. £2,000) OR whether the £2,500 is the 80% figure i.e. with workers earning £3,125 (and the employer gets 80% of that which is £2,500). We’ll find out soon when the government gives more guidance.

£2,500 per month is broadly £30,000 p.a which is just a little more than the national median salary.

What other conditions are there?

The government has also produced guidance for employees which says that to qualify for the scheme: ”you should not undertake work for your employer while you are furloughed, this will allow your employer to claim a grant of up to 80% of your wage for all employment costs up to a cap of £2,500 per month”. So, this suggests that the £2,500 will end up in the employees pocket and that it will likely cover pension contributions, national insurance contributions made by employers and so on. Again, we await the detail. Importantly it seems they shouldn’t do work.

What about the other 20% of pay or pay above the £2,500 figure?

The employer’s guide is not clear on whether the employer has to top up pay by 20% to top it up to the normal level. But the guide for employees says “you will remain employed while Furloughed, your employer can choose to fund the differences between this payment and your salary but does not have to” so that is pretty clear, the employer can say “you’ll get 80% of pay the government is reimbursing us for but we’re not going to pay you the other 20% because you’re not working”.

The significance is that if an employer chooses to withhold 20% of normal wages they must have a contractual right to do so or they will have to have the employee’s agreement to do so – so employees are very likely to agree the offer if the alternative is redundancy or just not being paid.

What other issues might arise?

There are a few points about this. Again, a lot of it we just don’t know the detail of at the moment.

What happens if some employees think they’d like to take 80% of wages for doing nothing rather than going to work to earn the extra 20% ? This is unlikely to be a problem because without the employee’s agreement Furlough leave isn’t going to happen.

So, an employee cannot demand from an employer that they will stay at home and want 80%, they have to have been offered the chance to do it by the employer. Of course this is not going to solve the problem of the people who are still at work and look around and see the colleague who was working next to them who might have been laid off or made redundant and for that reason might have been a less capable worker as they are the ones who may have been dismissed due to redundancy, sitting at home and getting 80% of their salary when the better employee might still be working at work to get 100%. This is likely to cause problems and we’ll have to see how this plays out.

An employee on Furlough leave remains on the books. This means that their continuous service will be extended. In turn, subject to eligibility criteria, this may mean that if in future the employer finds themselves in a position where employment may need to be terminated then the level of statutory redundancy pay may be slightly higher and notice pay more expensive if longer service translates for that employee into a longer notice period.

Is it open to abuse?

Yes it is. You could easily see that some struggling businesses might claim they’ve sent their employee’s home on Furlough pay and therefore recover 80% of the salary from the government yet actually have that employee working in some fashion. Some employees might not know that they’ve been designated by employers as on Furlough leave on the new government portal that’s coming up. The employers (wrongly) might not tell them.

So, there’s likely to be abuse and we don’t know yet what steps the government will put in to prevent that abuse. We’ll have to wait and see.

This note will likely be superseded by Government guidance when it comes out likely early this coming week.

It is not intended as full advice and it’s content is likely to be time limited and superseded by regulations very soon. Please get in touch for specific advice relating to your organisation.

Last updated: 21/3/2020

  • Where employers lay staff off, they 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.  You can lay staff off if this is in your employment contract.  If not, you need to seek agreement.  I can help with that.
  • In due course you will need to 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.
  • There may be a time lag between making these payments and reclaiming the money from the government.  That will put extra pressure on cash.  Employers could delay payments to staff until the claim is received.
  • This link also includes details of the statutory sick pay scheme and all the other support available for businesses.

If you would like further information about staffing issues please don’t hesitate to get in touch.

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