COVID-19 Update

Friday, June 5, 2020

We hope you are continuing to keep well. We thought we would give you an update on the current situation and what is available to help you and your business as we start to come out of lockdown….


UPDATE 4th June 2020


For those of you who were not entitled to receive any other grant scheme but qualify as a small business please see the section below on the Covid-19 Discretionary Grant Fund to see whether you are eligible to apply.
 

Employers- Coronavirus Job Retention Scheme


There are three changes to the job retention scheme:

1.  From 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.

2.  From 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.

3.  The scheme will close to new entrants from 30‌‌ June.

1. Part time furloughing

From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August (the scheme ends completely on 31 October 2020).

From 1 July claims are restricted to employers currently using the scheme for employees who they have previously furloughed before 10 June. This means that the only employees who can be furloughed are those who have already completed a full three-week furlough period before 30 June (i.e. starting on or before 10 June). There is a further deadline of 31 July to make any claims for the period prior to the end of June.

Employers will decide the hours and shift patterns their employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, it will need to be reported and claimed for a minimum period of a week. Claims can be for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked and Sadler Davies & Co will require this information to make the calculations.

More details will be announced on 12th June.

If employees are unable to return to work (shielding, childcare issues), or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

2. Employer contributions

In June and July nothing changes regarding the amount the employer can claim (80%) and employers NI and pension can be claimed.  The government will continue pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work.

From August, the government grant provided through the job retention scheme will be slowly tapered with employers paying the employers NI and pension from August onwards.

The main change from 1st August, is that employers will have to pay employers NI and pension.  The government will continue to pay 80% of wages up to a cap of £2,500.

Employers must pay employees for the hours they work at their previously agreed rate (or National Living/Living Wage rate which increased in April). Employers funding of the employers’ NICs and pension contributions applies to both the hours not worked and hours worked if any.

In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500 in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay employer NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.  The cap on the furlough grant will be proportional to the hours not worked.

3. Important dates

It is important to note that the scheme will close to new entrants from 30‌‌ June.

From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June.

This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌ June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June.

In summary:

 
 

March to July

30 June

1 July

1 August

September

October

Furlough wages: government contribution

Government pays 80% of furloughed workers’ wages up to a cap of £2,500

 

Government pays 80% of furloughed workers’ wages up to a cap of £2,500

Government pays 80% of furloughed workers’ wages up to a cap of £2,500

Government pays 70% of wages up to a cap of £2,187.50.

Government pays 60% of wages up to a cap of £1,875. Employers will pay ERs NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

Furlough wages: employer contribution

       

Employer pays 10% of wages (to make up to 80%)

Employer pays 20% of wages (to make up to 80%)

ERs NICS & pensions

Government pays

   

Employer pays

   

Other key changes

 

The scheme will close to new entrants

Part-time work possible whilst furloughed

     

Minimum claim period

3 weeks

 

1 week

     
 

Self-Employment Income Support Scheme


The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July.

Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £7,500 in total).

It's really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves.  HMRC will calculate the amount of self-employment support individuals will receive.

More information about the second SEISS grant will be available on GOV.‌‌UK on 12‌‌ June.


COVID-19: Discretionary Grant Fund

A Discretionary Grant Fund is available for small and micro-businesses that are adversely affected by the Coronavirus and are not eligible for other grant schemes.

The grant amount is discretionary and may be up to £25,000, £10,000 or any amount under £10,000.

The grant is assessed and administered by Local Authorities. A business is potentially eligible for this fund if it:
  • Is based in England.
  • Has fewer than 50 employees.
  • Has fixed building costs such as rent.
  • Was trading on 11 March 2020.
  • Has been adversely impacted by the Coronavirus.
  • Is not eligible for the Small Business Grant Fund or the Retail,
Hospitality and Leisure Grant Fund.

Priority applications are given to:
  • Small businesses in shared offices or other flexible workspaces, such as units in industrial parks or business incubators.
  • Regular market traders.
  • Bed and breakfasts paying council tax instead of business rates.
  • Charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief.
You cannot apply if:
  • Your business is in administration, insolvent or has received a striking-off notice.
  • If you’re already claiming under another government grant scheme, although you may also claim for the Coronavirus Job Retention Scheme or Self-Employed Income Support Scheme.
How to apply
This grant opened on 29 May 2020. It closes at 9 am on 15 June 2020.

Go to your local council’s website https://www.gov.uk/find-local-council to apply.


HMRC – Be aware of scams


Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV.‌‌UK for information on how to recognise genuine HMRC contact.

You can also forward suspicious emails claiming to be from HMRC to [email protected] and texts to 60599.


HMRC – Be aware of penalties


New legislation has been published for consultation on the 'Taxation of coronavirus (COVID-19) support payments'.  Whilst this in consultation we wanted to draw your attention to it and do want to point out that there are harsh penalties for those who make fraudulent claims on any of the grant and support schemes provided by the Government during this pandemic.

Keep well & Stay safe.
 

Current Working Arrangements

Current Working Arrangements for Sadler Davies & Co. The health and safety of our staff and our clients is the highest priority to us so in line with the current guidance from the Government, we have taken the decision to close our office until further notice and/or guidance is received from the Government. The office will be manned by one member of staff who will be answering calls and dealing with the day to day administration activities that cannot be done outside of the office. We will do our best to ensure that our clients are not inconvenienced by this and would like to reassure you we have arrangements in place to ensure everything still runs as smoothly as possible. 

Due to this closure, we are closed for all client meetings, but you can drop off records and anything else that you need to into our office. We would ask you to contact the office prior to coming to the office to ensure the staff member is available to receive the documents and if you could please leave these at the front door and call 01322 271617, a member of staff will come and collect the records, in line with the government recommendations of social distancing. Clients have already been using our online Openspace system and we would encourage the use of this and/or any other application to store and transfer records electronically especially during this time. We also ask clients to be conscious of submission deadlines and ask that information is sent to us promptly in order for us to be able to be in the best position to submit returns to HMRC and advise you accordingly. Client meetings can be held over the phone or via a virtual platform and one of our staff will contact you to discuss this when the time arises.