In these unprecedented times, we have been receiving a high volume of calls from our clients asking for advice. As a result, we have put together this guide as a way to update everyone with the latest news and guidelines.

Please also refer to our News pages by following this link.

All information on this Summary will be regularly updated in line with Government advice as it is published.

Grants for Ambitious Technologies to build UK resilience following Coronavirus outbreak

There is government funding of £20 million available to businesses who develop new ways of working and help build the UK’s resilience to the long-term impact of coronavirus.

Grants of up to £50,000 will be available to technology and research focussed businesses to develop new ways of working that help to  build resilience in industries such as delivery services, food manufacturing, retail and transport, as well as support people at home in circumstances like those during the coronavirus outbreak.

This could include the following:

  • new technology allowing retailers to respond better to sudden spikes of consumer demand and improve deliveries across the UK
  • new services for families to connect with and remotely monitor their elderly or vulnerable relatives, giving people peace of mind that their loved ones are receiving the services they require such as food deliveries, doctors’ appointments and paying bills
  • creating education tools which seamlessly integrate the classroom with children at home, allowing teachers to remotely set tasks and support vulnerable children.

If you think your business would be eligible, please see the following link to make a new application.

https://www.apply-for-innovation-funding.service.gov.uk/covid19/overview.html?_ga=2.156269179.1357463797.1586182122-27815192.1577113352

Last Updated: 08 April 2020

Guidance on dealing with Furloughed Workers on Sage Payroll

At the moment, until we receive further information from Sage, the best way to deal with furloughed workers is to set up a new pay element as follows:

SETTING UP NEW PAY ELEMENT:

  • Click Company, then click Pay Elements
  • Click the Payments tab, then click New
  • In the Status drop-down list, select Variable
  • In Description enter Furlough
  • In the ‘This Payment is subject to’ section, select the PAYE and National Insurance check boxes and others as applicable
  • Select all other applicable check boxes then click ok

ADD THE PAY ELEMENT TO EMPLOYEES:

  • On the Employee list, click the relevant employees
  • On the menu bar, click Tasks then click Global Changes
  • Click Payments, then Add Payment
  • Select the Furlough payment then click ok
  • Click Yes then click ok

PAYING THE EMPLOYEE

You will need to calculate the employees pay, which is the lower of either 80% of their gross salary as at 28 February 2020 or £2,500 per month.

If the employees pay varies from period to period you can claim the higher of either the same months earnings for the previous year or the average monthly earnings for the 2019/20 tax year. 

If you are paying weekly you will need to calculate the figures on a weekly basis, the maximum weekly amount equivalent to the £2,500 will be £576.92.  Then you prepare the payroll in the usual way selecting the furlough pay element for those employees affected and manually putting the amount they are being paid.

  • On the toolbar, click Payroll then click Enter payments
  • On the furloughed employee Click add payment, on the drop down menu select Furlough
  • Enter Hours, if salaried enter the hours as 0.8 then tab to Rate and keep this at the usual rate.  However, if they are variable enter 1 as the Hours and put in the amount you have manually calculated
  • If you are making the employees pay up to 100% then you will need to enter 0.20 in their normal pay element, if not making their pay up please put nil
  • Ensure all other amounts are nil and then Click Save
  • The employees pay should now show as Furlough on their payslip and if you are making their pay up it will show 20% of their usual pay.

It is important to note that you can only furlough employees that were on the payroll as at 29 February 2020.

Please ensure you keep all of your workings to support the figures.

Last Updated: 02 April 2020

Job Retention Scheme

The Coronavirus Job Retention Scheme is a new temporary scheme open to all UK employers for at least three months starting from 1st March 2020. Employers can use a portal to claim 80% of furloughed employees’ usual monthly wages costs up to £2,500 a month, plus the Employer National Insurance contributions and minimum automatic enrolment pension contributions on that wage.

Kelly Cummings our Payroll Manager has spoken to several of our payroll clients and will assist them with making a claim, but here is a summary of what we know so far. Please note we are still waiting for further details.

Who can claim?

  • The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28th February 2020 and have a UK bank account.
  • Businesses, Charities, Recruitment Agencies and Public Authorities can all apply
  • Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme.

Which employees can you claim for?

  • Furloughed employees must have been on your payroll on 28th February 2020
  • When on furlough an employee can not undertake work for or on behalf of the organisation
  • While on furlough, the employees wage will be subject to usual income tax and other deductions
  • If a client is still working on reduced hours, they will not be eligible for this scheme
  • Please note employees hired after 28th February cannot be furloughed or claimed for with this scheme
  • If your employee is on unpaid leave before 28th February, they cannot be furloughed
  • Employees on Statutory Sick Pay (SSP) will get SSP, but after can be furloughed
  • Employees who are shielding in line with public health guidance can be placed on furlough

What do employers need to do?

  • Employers should discuss with their staff and make any changes to the employment contract by agreement
  • Employers should write to their employee confirming that they have been furloughed and keep a record of this communication
  • Employers may need to seek legal advice on the process as changes to employment
  • contracts may be needed.

For Employment Law advice we suggest you take specialist advice.  A useful link from one of our contacts is below:

What can you claim?

  • Employers will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month. An employer can choose to top up an employee’s salary beyond this, but this is not compulsory.
  • Please note you can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for.

Crowthers will continue to monitor the details of the scheme and will update in due course.

Last Updated: 27 March 2020

Self-employment Income Support Scheme

A new scheme was announced Thursday 26th March to help the self -employed.

The scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2500 per month for the next 3 months.

Who is eligible for the scheme?

  • You have submitted your 2019 Tax Return
  • You traded as self-employed in the year ended 6th April 2019 to 5th April 2020
  • You are trading when you apply or would have been except for COVID-19
  • You intend to continue to trade
  • You 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 from self -employment.

In order to qualify one of the following conditions needs to apply:

  • You have trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits are more than half of your taxable income.
  • If you average trading profits/partnership trading profits in 2016-17, 2017-18 and 2018-19 and the averaged profit is less than £50,000 and these profits are more than half of the average taxable income in the same period.

Please note if you are late filing your 2019 Tax Return you will have until 23rd April 2020 to file.

How much will you get?

If you are eligible for the scheme you will receive a taxable grant which will be 80% of the average profits from the tax years 2016-2017, 2017-2018 and 2018-2019.

It will be up to a maximum of £2,500 per month for 3 months and the grant will be paid directly into your bank account, in one instalment.

How do I apply?

Please note you are not able to apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.  Crowthers can of course assist with these applications when appropriate.

The grant will not be paid until the start of June at the earliest.

If you have any queries for the Crowthers team at this stage, please do not hesitate to contact us.

Last Updated: 31 March 2020

VAT

HMRC have agreed to defer Value Added Tax (VAT) payments for 3 months and all UK businesses are eligible. 

The deferral will apply from 20 March 2020 until 30 June 2020 and this is an automatic offer with no applications required. 

Businesses will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. 

Please note the following:

Several clients have asked what happens if they are unable to file VAT returns on time because of Covid-19?

We expect such circumstances to count as a “reasonable excuse” for late filing, but the guidance is not clear at the moment.

Last Updated: 26 March 2020

Income Tax

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

This is an automatic offer with no applications required. Please note the following:  

  • 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 individuals who have outstanding tax liabilities.  

If you need to speak to HMRC regarding a tax payment, we recommend that you call HMRC direct on 0800 015 9559.

Last Updated: 26 March 2020

Retail, Hospitality and Leisure Businesses

For retail, hospitality and leisure businesses there have been various measures introduced: 

Business Rates Holiday    

This will be introduced for the 2020 to 2021 tax year. You are eligible if your business is based in England and your business is in this sector. There is no action needed by you as this will apply to your next council tax bill in April 2020.

There is a business rates calculator online that you can use to estate the business rate charge you are no longer expected to pay.  

Please see the following link:

 https://www.gov.uk/calculate-your-business-rates

Please note local authorities may be in the process of reissuing bills.

Cash grants

Please note the following:

  • Businesses with a property that has a rateable value of £15,000 and under will receive a grant of £10,000. 
  • Businesses with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000. 
  • You do not need to do anything and your local authority will write to you if you are eligible, but any queries should be directed to your local authority 
  • Please follow this link to find your local authority: https://www.gov.uk/find-local-council

Several clients have queried if they will be eligible if they do not pay business rates because of small business rate relief.  They will be entitled to a grant of £10,000 to help with ongoing costs.

Please follow the below link for further information:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/876893/small-business-grant-fund-retail-guidance-vers-3.pdf

Last Updated: 02 April 2020

Business Interruption Loan Scheme

This is a temporary scheme set up to support businesses with access to loans, overdrafts, invoice finance and asset finance for up to 6 years.

The government will cover the first 12 months of interest payments. 

There are 40 accredited lenders able to offer the scheme including all the major banks. 

It is important your business meets the eligibility criteria. The link is as follows:

To apply you should talk to your bank as soon as possible to discuss your business plan.  There may also be the option to ask for a repayment holiday with exiting loans.  

For more information on the scheme please see the following link:

Last Updated: 26 March 2020

Companies House and Filing Deadlines

You should, if you are able, continue to file your accounts online, but if your accounts will be later because of COVID-19 you can apply for an automatic and immediate 3 month extension to file your accounts. 

Please note you must apply before your filing deadline date.

You can do this online by following the below link: 

https://beta.companieshouse.gov.uk/extensions?_ga=2.146329780.1639197876.1585129996-1637025097.1577738477

Alternatively, phone Crowthers for assistance with this.

Last Updated: 26 March 2020

Job Retention Scheme – Furlough Guidance

Please follow the below link for a thorough indication of how the Coronavirus Job Retention Scheme will work:

https://www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-job-retention-scheme-furlough-guidance

Last Updated: 26 March 2020

We are trying to provide information to our clients as these new schemes are being announced and so we hope the above library will provide a good starting point. We shall endeavour to update these links as new detailed provisions emerge.

Sophie Howard FCA