Yesterday, delivering his Summer Economic Update in Parliament, the Chancellor Rishi Sunak announced a package of measures to support job retention, as well as the creation of new jobs. From the employers' point of view, there were 3 key announcements, plus more for the unemployed, as well as for the hospitality and entertainment sectors which were hit especially hard by the pandemic. 1. Jobs Retention Bonus Over 9 million UK workers were put on Furlough in the past few months under the Job Retention Scheme. Now, in an effort to encourage employers to hire back furloughed workers, the Government will provide a £1000 bonus for each employee that is brought back from Furlough, as long as they are paid at least £520 per month on average between November 2020 and January 2021. The bonus will be paid as a grant to employers. Different to grants under the JRS, these grants are meant to benefit the employer, and are not meant to cover the employee's wages. 2. Kickstart Scheme The Kickstart Scheme is designed to increase job creation for young individuals entering the workforce. The Scheme will pay employers directly, covering new workers' wages for six months, plus an amount to cover overheads. The requirements are as follows: • Eligible new workers must be 16 to 24 years old at risk of long-term unemployment; • The employer must prove that the jobs are being created additionally to the ones existing; • The jobs must be paid at least the National Minimum Wage, for at least 25 hours per week. According to the Chancellor, this means that for a 24-year-old the grant will be around £6,500. Employers can apply to be part of the scheme from next month, with the first Kickstarters in their new jobs this autumn. 3. Apprenticeships & Traineeships Bonuses For the next six months, employers will receive bonuses as an incentive to hire trainees and apprentices. The bonuses will amount respectively to: • £1,000 to take on new trainees; • £2,000 per apprentice under 25 years old; • £1,500 per apprentice over 25 years old. For Hospitality, Tourism & Leisure: 5% VAT on most services across the hospitality sector: In order to facilitate the recovery of these sectors, which were hit the hardest by the pandemic, the Chancellor announced a VAT cut from 20% to 5% on food, accommodation and attractions. This includes: • Eat-in or hot takeaway food from restaurants, cafes and pubs; • Accommodation in hotels, B&Bs, campsites and caravan sites; • Attractions like cinemas, theme parks and zoos. This will be effective from next Wednesday (15 July 2020) to 12 January 2021. - More info here. Eat Out to help out: Additionally, for the whole month of August, participating businesses will be able to offer 50% off meals, up to a maximum discount of £10 per head for everyone, including children, Monday to Wednesday. Businesses will need to register through a website open next Monday, and will be able to claim the discounts back each week in August, with the funds paid into their bank account within 5 days. - More info here . Other measures The Chancellor's plan also looked at helping those who lost their job find a new one as soon as possible. In order to do this, they are doubling the number of Work Coaches in Job Centres. The announcement also included • a £2bn Green Home Grant, which covers part of the renovation costs to make houses energy efficient; • a £1bn investment to improve the energy efficiency of public sector buildings; • over £5bn in infrastructure construction projects; • Nil Rate Band of Residential Stamp Duty increased from £125,000 to £500,000. We expect additional announcements to be released in the coming days, outlining details of how to receive some of the Grants and Bonuses announced today. As usual, we will keep you posted via email and on this blog with the latest developments. Read the Governments Blog article here.

There is now a litte (just a little) more information available about the Self Employed Income Support Scheme that has been put in place by the Government.

The online service you’ll use to claim should be available from Monday 20th April. And the really hot off the press news, as I have been sitting here getting this post in place a news flash has come through to say that this scheme has now been extended by 1 month, it was originally planned to run March, April & May but will now include June. If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay. This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus. The way to make a claim is online- the service should be simple to use and any support you need should be available from your Bookkeeper/Accountant (Agent). Please use the online support and do not contact HMRC unless it is absolutely necessary - any questions should be directed at your agent, representative or our Web chat service. Who can claim You must have: created and started a PAYE payroll scheme on or before 19 March 2020 enrolled for PAYE online a UK bank account Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities. Apprentices Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed. However, you must pay your Apprentices at least the Apprenticeship Minimum Wage/National Living Wage/National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage. Guidance is available for changes in apprenticeship learning arrangements because of COVID-19. Public sector organisations The government expects that the scheme will not be used by many public sector organisations, as most public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff. Individuals Individuals can furlough employees such as nannies provided they pay them through PAYE, and sent HMRC an RTI submission notifying a payment in respect of the employee on or before 19 March 2020. Administrators Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme. However, we would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business. Employees you can claim for You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough. Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa. To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation or any linked or associated organisation. This includes providing services or generating revenue. Employers are free to consider allocating any critical business tasks to staff that are not furloughed. While on furlough, the employee’s wage will be subject to usual income tax and other deductions. If you made employees redundant or they stopped working for you after 28 February If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme. This applies to employees that were made redundant or stopped working for you after 28 February, even if you do not re-employ them until after 19 March. This applies as long as the employee was on your payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020 If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme. If your employees are working reduced hours If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme. If your employee is on unpaid leave If an employee started unpaid leave after 28 February 2020, you can put them on furlough instead. If you put them on furlough then you should pay them at least 80% of their regular wages, up to the monthly cap of £2500. If an employee went on unpaid leave on or before 28 February, you cannot furlough them until the date on which it was agreed they would return from unpaid leave. If your employee is self-isolating or on sick leave If your employee is on sick leave or self-isolating as a result of Coronavirus, they’ll be able to get Statutory Sick Pay, subject to other eligibility conditions applying. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness, and there is a 3 week minimum furlough period. Short term illness/ self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees. You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill, needs to self-isolate or be shielded, then you might qualify for the SSP rebate scheme, enabling you to claim up to two weeks of SSP per employee. If your employee becomes sick while furloughed Furloughed employee retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill must be paid at least Statutory Sick Pay. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate. If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the furloughed scheme. Shielding Employees Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed. Employees with caring responsibilities Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed. If your employee has more than one job If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually. Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages. If your employee is on a fixed term contract Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them. Eligible individuals who are not employees As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE: office holders (including company directors), salaried members of Limited Liability Partnerships (LLPs), agency workers (including those employed by umbrella companies), and limb (b) workers. The guidance below sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Unless explicitly set out below, all other guidance is applicable to these cases, and should be followed. Office Holders Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP. Company Directors As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC). Salaried Members of Limited Liability Partnerships (LLPs) Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme. The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP. To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP. Agency Workers (including those employed by umbrella companies) Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies. Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients. Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not. Limb (b) Workers Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme. Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS), announced by the Chancellor on 26 March 2020. Read more information on the Self-Employed Income Support Scheme, including eligibility criteria and how to claim. Contingent workers in the public sector The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body. Read more information on contingent workers impacted by COVID-19. This guidance applies to agency workers paid through PAYE, as well as those paid through umbrella companies on PAYE and off-payroll workers supplying their services through a Personal Service Company (PSC). Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35) Public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, it may be appropriate to claim under the CJRS. Contractors who are deemed employees according to the off-payroll working rules might be eligible for this scheme. In this scenario, if the public sector organisation wished to furlough a contractor, they would have to confirm this with both the contractor’s Personal Service Company (PSC) and the fee-payer (as set out in the off-payroll working rules, usually the agency paying the contractor’s PSC). It should be formally agreed between these parties that the contractor is to do no work for the public sector organisation during their period of furlough. The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer NICs on that subsidised wage. The fee-payer would then pay at least the amount of wage-grant received to the PSC, and report the payment via PAYE using the contractor’s details, making the usual tax and National Insurance contributions (NICs) deductions for contracts in scope of the off-payroll rules. The PSC would then be required to report the amount it pays to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return. Where a contractor is continuing to receive payments from a public sector client (including through the CJRS or other any other scheme), income from this client should be excluded from any calculation of the reference pay for the purposes of the CJRS if the contractor also decides to furlough themselves as an employee or director of their own company. Employee transfers under TUPE and on a change in ownership A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership. Payroll Consolidation Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 19 March 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS. If your employee does volunteer work A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation. Your organisation can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance. If your employee undertakes training Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation. Furloughed employees should be encouraged to undertake training. Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. In most cases, the furlough payment of 80% of an employee’s regular wage, up to the value of £2,500, will provide sufficient monies to cover these training hours. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages (see National Minimum Wage Section for more details). If your employee is on maternity leave, adoption leave, paternity leave or shared parental leave The normal rules for maternity and other forms of parental leave and pay apply. You can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either: maternity pay adoption pay paternity pay shared parental pay Agreeing to furlough employees Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way. To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years. You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you. How much you can claim You’ll need to claim for: 80% of your employees’ wages (even for employee’s on National Minimum Wage) - up to a maximum of £2,500 per month. Do not claim for the worker’s previous salary. Employer National Insurance contributions that are paid on the subsidised furlough pay. Employer pension contributions that are paid on the subsidised furlough pay, up to the level of the minimum automatic enrolment employer contribution.The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings. Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution. You can choose to top up your employee’s salary, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up salary. Grants will be prorated if your employee is only furloughed for part of a pay period. Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status. The way you work out your employees’ wages is different depending on what type of contract they’re on, and when they started work. Full or part time employees on a salary Claim for the 80% of the employee’s salary, as in their last pay period prior to 19 March 2020. If, based on previous guidance, you have calculated your claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) you can choose to still use this calculation for your first claim. Employees whose pay varies If the employee has been employed for 12 months or more, you can claim the highest of either the: same month’s earning from the previous year average monthly earnings for the 2019-2020 tax year If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work until the date they are furloughed. If they have been employed for less than a month, work out a pro rata for their earnings so far, and claim for 80%. Past Overtime, Fees, Commission, Bonuses and non-cash payments You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded. Benefits in Kind and Salary Sacrifice Schemes The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. All the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme. Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly. Employer National Insurance and Pension Contributions You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too. You cannot claim for: additional National Insurance or pension contributions you make because you chose to top up your employee’s salary any pension contributions you make that are above the mandatory employer contribution Apprenticeship Levy and Student Loans Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these. National Minimum Wage Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW)/ Apprentices Minimum Wage (AMW) for the hours they are working or treated as working under minimum wage rules. This means that furloughed workers who are not working can be paid the lower of 80% of their salary or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage. However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time. Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact Acas. Returning from statutory leave Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave. In line with other employees, claims for full or part time employees furloughed on return from statutory leave should be calculated against their salary, before tax, not the pay they received whilst on statutory leave. Claims for those on variable pay, returning from statutory leave should be calculated using either the: same month’s earning from the previous year average monthly earnings for the 2019-2020 tax year. What you’ll need to make a claim Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment. To claim, you will need: your employer PAYE reference number the number of employees being furloughed National Insurance Numbers for the furloughed employees Names of the furloughed employees Payroll/employee number for the furloughed employees (optional) your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number the claim period (start and end date) amount claimed (per the minimum length of furloughing of 3 consecutive weeks) your bank account number and sort code your contact name your phone number You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim. If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system - this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional). If you have 100 or more furloughed staff you will be asked to upload a file with the information rather than input it directly into the system. We will accept the following file types: .xls .xlsx .csv .ods The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional). You should retain all records and calculations in respect of your claims. HMRC cannot provide your employees with details of claims you make on their behalf. Please help us by keeping your employees informed, answering any questions that they might have. Please ask them not to contact HMRC. If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. Your file only agent can assist you in obtaining the information you need to claim (which is listed above). We are making the claim process as straightforward as possible. If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into. Claim You should make your claim using the amounts in your payroll - either shortly before or during running payroll. Claims can be backdated until the 1 March where employees have already been furloughed. If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC. Minimum furlough periods Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks. After you’ve claimed HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account. You must pay the employee all the grant you receive for their gross pay in the form of money. Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500). Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment. When the government ends the scheme When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy). HMRC will process all claims made before the scheme ends. When your employees are on furlough You cannot ask your employee to do any work that: makes money for your organisation or any organisation linked or associated with your organisation provides services for your organisation or any organisation linked or associated with your organsation They can take part in volunteer work or training. Employee taxes Your employees will still pay the taxes they normally pay out of their wages. This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension. Employee rights Employees still have the same rights at work, including: Statutory Sick Pay maternity and other parental rights rights against unfair dismissal redundancy payments Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed. Working for a different employer If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough. For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C. Tax Treatment of the Coronavirus Job Retention Grant Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes. Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are not taxable on grants received under the scheme. Domestic staff are subject to Income Tax and National Insurance Contributions on their wages as normal.

This is just the first details of the scheme that has been announced this evening to support the Self Employed, this is just the bare bones of what is being set up and we do need to wait for more details. All Self Employed individuals who earn their money primarily from Self Employment and whose trading profits are below £50,000 will be eligible for this new scheme. Essentially the scheme will provide a taxable grant of up to 80% of the annual profit of your business based on the average profits for the business in the past 3 years up to a cap of up to £2500/month You will have needed to have submitted a Tax Return for year ending March 2019 to qualify and the Chancellor is allowing 4 weeks for those who have failed so far to submit to do so. The deadline was 31st January and so I anticipate that most people will have filed their returns, if you are in the category of not having filed them please do prioritise them now, I am available for a small number of new clients to assist with your accounts, should you need me then please do get in touch -once my order books are full I can ask some other Bookkeepers in my own networks if they have any capacity. The details of how this money will be released are not yet available and it may be early June before payments are received asn new systems shall need to be set up for this, but it will be backdated to 1st March and you can apply for Universal Credits and Business Interruption Loans. If you have less than 3 years of accounts the calculation will be based on the 1 or 2 years that you do have. If you have not been in self-employment over a year then you will need to be exploring options around Universal Credits etc is any other option will not be available I am unsure whether there will be any adjustment based on newer businesses who maybe lost money in their first year or two and only came into profit in the 2019 accounts, it would seem to me unfair to base their accounts on this basis but there may be little that can be done! For the record I am in this exact position so I am not being dismissive but the reality is that no one scheme can allow for every single evantuality and it's going to be a struggle to see how it can do without opening up to the realistic possibility of fraud. The Caveat to all of this is that the Chancellor has indicated that the taxes for the Self Employed may need to be reviewed in order to provide some parity with the Employed population, I personally do not think that this is unreasonable on the face of it and look forward to lots of debate and discussion with those who will want their cakes and to eat them.

Update (27th March 2020) the Government have released further information on how this scheme works, the brief version of this is: The Employees must be furloughed for a minimum of 3 weeks at a time. Because Furloughed workers are not working, the minimum wage does not apply. Amounts paid will include Employers NI & Pension Contributions as well as the Gross amount payable to the Employees, which will be subject to Tax & NI in the usual way. Employees on Sick or in Self Isolation should be paid using the SSP arrangements and the Furloughed when fit enough to return to work. However, in slight contradiction to the above, Employees who are shielding, in line with Gov't policy, can be placed on Furlough Employees can take part in Voluntary work, as long as this does not provide services that help towards revenue generation on behalf of the organisation. If workers are required to undertake Training during their period of Furlough it would be necessary to ensure that they are paid at or above the relevant Minimum wage for their age/category. The 80% is generally calculated on either the same months earnings from their previous year or the average monthly earnings for the 2019-20 tax year. If your Employee is on unpaid leave and was placed/went on unpaid leave before 28th February 2020 then they are not eligible to be Furloughed. The above is just a few of the bullet points from the Government document that they released last night, if you wish o read it in full you can find it here . Support for businesses and employees through the Coronavirus Job Retention Scheme. Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. Eligibility All UK businesses are eligible. How to access the scheme You will need to: designate affected employees as ‘furloughed workers,’ and notify your 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) Once these arrangements have been finalised rest assured I will put the info on here. To qualify for this, the employee must NOT wok for the employer while they are furloughed therefore it is important not to claim furlough for your salaries across the board if some of the staff are still required/needed to work during this period. HMRC will 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. Existing systems are not set up to facilitate payments to employers. It is at the discretion/capabilities of the employer as to whether they are able to make the relevant workers salaries up, to no more than their full salary (at the moment it isn't clear whether the calculations are more on a basic salary or whether it includes overtime payable, my suspicion is that it will be on basic only or an average over a period, e.g. 3 months. This scheme is backdated to 1st March and runs for 3 months in the first instance with the likelihood that it will be extended if required. The chancellor was clear that there is no upper limit/restriction on the amount of money he would make available for this. If your firm has a Business Interruption Scheme you would need to be very careful that you do not commit fraud by claiming both, it is a principle of all insurance that you declare any other source of money being sued to make up the income, it will almost certainly be the same for businesses wishing to claim this funding. If you are considering needing to take this step we have a Letter template that you can use for your workers you can find it here .

Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June. There is the option for the government to extend this period if needed. This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent. Eligibility All commercial tenants in England, Wales and Northern Ireland are eligible. How to access the scheme The change will come into force when the Coronavirus Bill receives Royal Assent. No action is required.

VAT Payment Deferral, for VAT registered Business the Government are introducing a VAT payment deferral 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. It is important to note that this money will be expected to be paid over as it has been collected on behalf of HMRC and, although it may be possible to enter into arrangements to repay over a period of time there may be fines and penalties for those who do not pay at the correct time unless other arrangements are agreed

At the start I want to say that, yes I am aware that the Government seem to be leaving those of us who are self employed out of things a little, to be honest, it doesn't worry me (and I am self employed myself) it also should not worry you, the reason? I firmly believe that the Government have been addressing issues in order of priority, it is my belief that within the next couple of weeks we will see real and substantial financial help offered to those of us who are self employed but their first priority was to keep businesses afloat and keep their employees assured that finance was in place to support them, just by the sheer numbers and the fact that there was real danger of good employees being left with no money and the benefits system being overwhelmed by the numbers of claimant involved. For us, any support is going to have to come through either local or Central government so securing the boundaries for the others was essential. But at the moment I shall outline what is already in place to support the Self Employed...

Funding and Finances for Businesses: Funding Rounds might be especially hard to successfully close, which means you might need to consider cash injections from other sources. We’ve outlined some options which can help you find funding more quickly than closing an equity investment round (which usually takes 4-6 months): 1. Director and shareholder loans The easiest and quickest way to inject funds into your business. Typically these are recorded as short term loans rather than equity, and they can be repaid once the company is in a better cash-flow position. Note: check your articles/shareholders agreement for any approvals required at board or shareholder level. 2. Operating cash flow New customers – can you negotiate payment in advance or at least payment in instalments? Existing customers – can you offer customers early payment discounts? Or consider invoice discounting or invoice factoring to get paid outstanding invoices quicker for a fee (typically 2-3% each time). We’ve set up a webpage with our partner Swoop that can match you with invoice financiers. HMRC Time To Pay – Businesses affected by the coronavirus that have outstanding tax bills they cannot pay because of the outbreak may be able to agree bespoke payment terms through the HMRC Coronavirus Helpline. At the moment HMRC can agree to defer the payments for PAYE and NICs with no penalties for late payments. However, the official line from HMRC is still that the interest charge of 3.25% will still accumulate on late payments. 3. Grants & credits £10,000 cash grant for SBRR eligible companies – Small Businesses that operate within premises with a rateable value under £15,000 are eligible benefit from Business Rate Relief. The Government is going to provide these companies with a £10,000 cash grant. This is primarily targeted brick and mortar retailers. more info on the Gov.UK COVID-19 page. Statutory Sick Pay Refund – For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee affected by the coronavirus will be refunded by the government in full. More info on Gov.uk, Se separate post on this matter. R&D Tax Credits – The average Innovative UK SME claims £45k p.a. back on qualifying R&D spend. We can help you submit a claim, get in touch with us for more information. Note, there are organisations that will advance R&D Tax Credit monies typically for an overall cost of 3-5% of the borrowed amount plus circa 1% pcm in interest. Innovate UK – Worth keeping an eye on the Innovate UK competitions page to see if there are grants that could be applied for. Note this is paid in arrears though so won’t alleviate immediate cash flow pressures. 4. Loans / Debt The Coronavirus Interruption Loan Scheme – Launched by the Government in response to the COVID-19 pandemic, the scheme will allow companies with a turnover up to £41m to borrow up to £1.2m. The Government will back 80% of any losses, allowing companies affected by the emergency to access extra liquidity in a time of need. The loans will be delivered by the British Business Bank “in a matter of weeks”. This is all we know at the moment, we will keep this page updated, and you can check updated information on the British Business Bank’s official website. SME Loan Search – We’ve set up a webpage with our partner Swoop that can match you with suitable debt products. The number of options for debt products available to SMEs has grown quite considerably recently. Start-up Loan Scheme – The government operates a start-up loan scheme where the business can borrow up to £100k (up to £25k per director, max 4 directors) as a business loan repayable over 4 years with an interest rate of 6%. There’s no personal guarantees, but if the business does not succeed, then any outstanding payments are repaid by the directors personally over the remaining term of the loan. If you think you are eligible, we recommend applying either through Outset Finance or Virgin Start-Ups. Revenue-Based Loans – Our partner Uncapped provides loans of £10k-£1m to businesses that process payments online with monthly turnover >£25k (e.g. ecommerce, subscription models, D2C, apps, SaaS… One flat fee (6%), no interest, no equity, no hidden charges and no personal guarantees. Check if you qualify. 5. Equity financing If you have pledges for investment, then we recommend you get the funds in now using an Advance Subscription Agreement. It’s a very straightforward 2-page letter, generally EIS/SEIS compliant for investors. Note, under an ASA it is common to offer a discount of 10% on the final investment share price.