We were all watching our Prime Minister on Sunday evening eagerly awaiting the announcements and the supporting guidance as to how we will emerge from lockdown. Equally, we have been trawling government websites today to get the most up to date information following Rishi Sunak’s announcement in Parliament this afternoon.
We have pulled together what we know so far for you below.
Job Retention Scheme – Update expected soon
The Chancellor announced earlier today that the Job Retention Scheme (JRS) will continue until the end of October 2020.
As part of these announcements, he stated that:
- furloughed workers will continue to receive 80% of their current salary (up to £2,500 cap); and
- new “flexibility” will be introduced from August.
The published story on the government website (see here) states that “The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August”.
“From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff”.
Therefore, it appears “as you were” until the end of July 2020, at which point the JRS will significantly change.
We will, of course, provider further guidance when detailed guidance is released before the end of May 2020.
Job Retention Scheme – Beware of over claiming!
We are urging all businesses, who have claimed under the Job retention Scheme, to check their calculations on claims to ensure they have not included the cost of their Employer’s NIC, where that cost is already being covered by the Employment Allowance.
The Employment Allowance is a £4,000 deduction (£3,000 in previous years) that eligible business can make in the current tax year against their NIC bill. The allowance is front loaded so that it applies at the start of the year until such a point in the year it is fully used (or it expires at the end of the year).
You will need to make the Employment Allowance claim as normal and then exclude any NIC already covered by the Employment Allowance from your JRS claim.
Consequently, an eligible business should have claimed the Employment Allowance in relation to its NIC bill in April (then May, June etc), meaning that a claim for NIC under the Job Retention Scheme that doesn’t take into account the benefit of the Employment Allowance will represent an over claim.
An over claim could mean an unexpected future bill from HMRC to reclaim the overpayment at a time when businesses could possibly be fighting to recover from the impact of the Coronavirus.
As we understand it, over claims can be rectified by making relevant adjustments to subsequent Job Retention Scheme claims.
Grants to small businesses and retail, hospitality and leisure businesses – Discretionary ‘Top-Up’ Grant Funding
A discretionary fund has been announced that is designed to provide grant funding of the type previously announced for small businesses retail, hospitality and leisure businesses. The discretionary fund is to assist businesses who had previously not been eligible for these two grant schemes.
The government announcement can be found here.
The criteria for the government’s discretionary fund, for businesses that currently do not qualify for a business support grant, is still unknown. Additionally, the amount of discretionary fund allocated to each local authority is also yet to be confirmed – but is expected this week.
The government announcement states “This additional fund is aimed at small businesses with ongoing fixed property-related costs. We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.”
The Cornwall Council website (see here) states the following:
“We welcome the Government’s announcement of a discretionary fund for businesses that currently do not qualify for a business support grant. This is an issue affecting many businesses in Cornwall and one we have raised with the Chancellor of the Exchequer and Cornwall’s MPs.
Please be aware that we are currently waiting on information from the Government on the criteria for this fund and are unable to offer advice at this stage on whether or not a particular business will qualify. As soon as we have this information from Government we will work with business leaders, local groups and support organisations to set out details of the eligibility criteria and how to apply. We will also post information on our website and social media channels.”
We hope that this will address some obvious businesses that have so far not been eligible for these grants (e.g. furnished holiday let owners that have not been registered for business rates).
We are monitoring announcements from Cornwall Council for information on who will be eligible and how they can apply. As ever, as soon as we are aware of further details we will send a further email update and post on our website.
Self-Employment Income Support Scheme
If you are unsure if you are eligible for the Self-Employment Income Support Scheme you can check by using HMRC’s online checker here
To watch a HMRC video on the online checker click here
The online checker works in most cases, however, in some cases it hasn’t provided the correct answer – it is a useful tool, but be aware of this!
Please obviously feel free to ask your usual RRL contact if you have any queries regarding eligibility.
If you are eligible, you will be given a date between 13-18 May 2020 when you can apply.
You will be asked to provide your Government Gateway ID and password and to check your bank and contact details are up to date, so that HMRC can remind you when it is your turn to apply. If you do not have a Government Gateway, it would be wise to set one up now to make applying for grant a smoother process.
When you apply, HMRC will show how they have calculated your claim.
Please note that clients of RRL will not always have a Government Gateway as this is generally used by individuals or businesses who don’t have an accountant/tax agent.
There has been an increase in scam emails, calls and texts. If someone gets in touch with you claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, you should not respond. It is a scam.
Suspicious emails claiming to be from HMRC should be reported to HMRC by sending them to email@example.com. Texts should be sent to 60599.
We do hope that you continue to find this information useful and our commitment to communicating with you reassuring. We are working hard remotely to ensure a seamless service to our clients, existing and new. If we can help you with anything or offer any further help or guidance, please get in touch with your usual RRL team member who will be pleased to help. Our telephone contact details can be found here. We will respond to emails as usual.
We will provide further updates, as and when further announcements are made and more detail is released.