I wanted to update you with the recent government announcements over the weekend. I have shelved all my routine work to deal with clients who are worried about the next 3/6 months and how they will get through this period. So, if you have any questions or concerns please e-mail or phone me at the office.
Please be aware with these announcements we do not have any detailed or technical briefings yet. But we can still start to plan, and I especially need to hear from clients who have or are going to reduce employees’ hours or have or want to make some staff redundant.
There grants/cash for business that are employers and/or have premises but there isn’t anything yet for the one-person Ltd company or sole traders.
I don’t know how the Government Salary scheme will work for directors yet so please bear with me and from what I understand the Government are apparently in discussion on how to help sole traders. We might hear more about this today.
Summary
- HMRC have announced that they will cover 80% of your employee’s salaries if they are not required due to the COVID-19 virus outbreak. This could be because they can’t work or that your turnover has reduced significantly.
- VAT payments due between the 20th March and the 30th June can be deferred.
- Income tax payments due on the 31st July can be deferred to the 31st January 2021 for the self-employed.
- Grants for business with premises that’s claim small rates relief or in the hospitality and leisure industry with rateable value below £52,000.
Government Job Retention Scheme
Where Chippendale and Clark produce your payroll, we will deal with this scheme for you and the administration behind it included in your normal payroll fee. Please contact me if you need to reduce staffing Levels. This scheme will be open for 3 months initially.
If you need to use this scheme C&C will send you a spreadsheet so that you can declare which of your employees will not be working. We will then fulfil your obligation by writing to each of those employees explaining that they are now unable to do any work for the company and their employment rights. We will then make the claims as necessary.
There are no details yet but I expect directors to be excluded from this scheme. The amount paid is also going to be based on February’s payroll run from what we understand. But I could be wrong!
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).
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.
Delayed VAT Payments
Where it is necessary VAT payments can be delayed. If your business has the cash, I recommend that you pay your VAT in full and only use this scheme as necessary.
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 delayed payment
Chippendale and clark will send out reminders to pay as normal for the 31st July. Only those clients who are self employed can take advantage of this scheme. Please note if you run your business through a limited company you are not self-employed.
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.
Grants
I have covered this before but because we have had lots of questions, I just want to update you all.
These will be available through the Wiltshire Council and they are apparently going to write to all those who are eligible in April. So please be patient and as soon as I hear anything, I will let you know.
Business Interruption Loans
We should be hearing more detail on these today, so if you need to access emergency funding please contact me as we need to prepare cash flows, and contingency plans for the bank.
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