We hope you had a good Easter and kept safe at home. As we have done at the start of previous weeks, we are summarising the measures the UK and Scottish governments have introduced so far, as a result of the COVID-19 outbreak.
Our subsequent updates may be less frequent than daily, but we will ensure that you are kept informed on new measures or any clarification of measures announced as the week progresses. If you need to refer back to any previous information, you will find all of our updates in the News section of our website.
We have received confirmation that the furlough scheme portal in relation to the COVID-19 Job Retention Scheme will go live on 20 April. Unfortunately, clarification in connection with the Self-Employed Income Support Scheme (SEISS) is still not forthcoming, with several areas remaining vague, including whether it relates to pre or post capital allowance profits.
COVID-19 Job Retention Scheme (CJRS)
The government has stepped in to help employers continue to pay part of the salaries of those employees who have been laid off due to the COVID-19 pandemic.
HMRC have been updating their IT systems to enable CJRS payments to employers. We have been informed that the HMRC furlough portal should be live on 20 April 2020 with the first payments being made 10 days later. We are expecting HMRC to issue further guidance later this week explaining how to use the system.
The scheme will initially be in place for three months, from 1 March 2020. HMRC will reimburse 80% of the wages costs relating to ‘furloughed’ employees up to a maximum of £2,500 a month. The following individuals are covered by CJRS:
- employees on any type of employment contract including zero-hours, flexible, part-time or fixed term
- agency workers (including those employed by umbrella companies)
- owner-managed businesses (including company directors) – but only on PAYE income
- salaried members of Limited Liability Partnerships (LLPs)
- nannies and other domestic staff.
What does furloughed mean? A furlough is “a temporary layoff from work”. People who get furloughed usually get to return to their job after a furlough. In today’s situation this means anyone asked to stop working during the COVID-19 pandemic but not made redundant.
Employees should not undertake work for their employer whilst on furloughed leave. Therefore, the option to work less hours is not available to furloughed employees. If as an owner-managed business you make a claim, you will be furloughing yourself. Therefore, as per the rules for employees, you must not undertake any income generating work whilst under furlough.
PAYE software also will require updating before employers can automatically add ‘furloughed’ employees to their payroll systems.
In order to access this scheme, an employer will need to do the following:
- Employees will need to be officially designated as ‘furloughed’ employees and those employees will need to be notified of this change. Don’t forget that changing the status of an employee is subject to existing employment law and any employment contracts in place.
- When available, employers will need to submit information in relation to their ‘furloughed’ employees through a new HMRC online portal. As soon as we have details of this portal we will let you know.
Our team have already been contacting clients for whom we manage payroll, to collate the necessary information we require to make the claims on behalf of your employees. If you have any concerns or questions about CJRS we would encourage you to contact us and we will be happy to help.
Further guidance can be found here on the HMRC website, last updated on 9 April, and here on the ICAEW website (Institute of Chartered Accountants in England & Wales), which includes useful examples and was last updated on 6 April.
It has been confirmed that IR35 contractors that work for public sector organisations will now also be eligible for the 80% furlough scheme.
Support for the Self-employed (SEISS)
Full details on the Self-employment Income Support Scheme (SEISS) can be found here on the GOV.UK website, which was last updated today, 14 April.
Self-assessment tax payments due on 31 July 2020 by self-employed individuals will be deferred until 31 January 2021. You do not need to apply to claim this deferral, it will be automatically applied. In addition, no penalties or interest for late payment will be due in the deferral period. This deferral includes all self-assessment tax returns, not just the self-employed.
We understand that HMRC is aiming to contact all those who are self-employed and eligible to claim under SEISS, by mid-May. Payments under the scheme should be paid by early June 2020.
If you are self-employed, you can also access full universal credit at a rate equivalent to statutory sick pay.
The planned changes to the IR35 off-payroll working rules have been deferred by a year to April 2021. Existing off-payroll working rules will continue for a further year.
COVID-19 Government Statutory Sick Pay and How to Apply for it
The government will meet the cost of COVID-19 statutory sick pay (SSP) for small businesses with up to 250 employees (as at 28 February 2020) for 14 days.
SSP will now be available for eligible individuals who:
- have coronavirus
- have coronavirus symptoms, for example a high temperature or new continuous cough
- have someone in their household that has coronavirus symptoms
- have been told to self-isolate by a doctor or NHS 111
SSP will be payable from day one instead of day four for affected individuals. COVID-19 statutory sick pay is expected to be in the form of a refund.
The weekly allowance for SSP increased from £94.25 to £95.85 on 6 April.
Last Friday HMRC published new online guidance which includes information about who can use the scheme and the records employers must keep. These details can be found here on the GOV.UK website.
Individuals displaying symptoms of coronavirus or living with someone symptomatic of COVID-19 can get an isolation note from the NHS website or, if you are registered with a GP in England the NHS mobile phone app. These notes can be used by employees where their employers require evidence.
Carrying over annual leave
Employees who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry up to a maximum of four weeks into the next two leave years. For example, if an employee:
- is self-isolating or too sick to take holiday before the end of their leave year
- has had to continue working and could not take paid holiday
If an employee has been furloughed and cannot reasonably use their holiday entitlement, they may also be able to carry over holiday.
More details on the temporary law can be found here on the GOV.UK website.
Emergency Volunteer Leave
Employees will be entitled to take emergency volunteer leave to help support essential health and social care services.
An outline of the conditions for emergency volunteer leave include:
- it will only be available to workers who have been certified by their local authority, the NHS Commissioning Board or Department of Health to act as an emergency volunteer
- emergency volunteer leave can be in blocks of two, three or four weeks. Workers can take only one period of leave in each “volunteering period”, which is, at present, a 16-week volunteering period
- employees will need to give three working days’ notice and provide their employer with a certificate confirming their approval as an emergency volunteer
- there is no provision for employers to refuse leave with the following exemptions: workers employed or engaged by businesses with fewer than ten staff, Crown employees, parliamentary staff and employees in police service
- any volunteer leave will be unpaid but a compensation fund may offset volunteers for loss of earnings, travel and subsistence (details of this are still to be announced)
- employees will remain bound by their existing terms of employment (other than those relating to pay) and will have a statutory right to return to the same job on the same terms.
Business Rates Holidays and Cash Grants
Any business within the retail, hospitality and leisure sectors will not have to pay business rates for the 2020/21 tax year.
In addition, for all businesses in England and Scotland in receipt of small business rate relief or rural rate relief, a one-off small business grant of £10,000 is available.
Within the retail, hospitality and leisure sectors in England, grant funding of up to £25,000 per property for businesses with a rateable value of less than £51,000 is available.
Eligible businesses in these sectors with a property that has a rateable value of up to and including £15,000 will receive a grant of £10,000. Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000.
In Scotland businesses with a rateable value between £18,000 and up to and including £51,000 will be able to apply for a one-off grant of £25,000.
You need to apply to your local authority for the cash grants. The links you need are:
This benefit now includes self-catering accommodation and caravans in Scotland. There is a restriction of one grant per ratepayer and applicants will have to provide evidence that:
- the property is each ratepayer’s primary source of earnings eg. one third or more; and
- the property is let for 140 days or more in the financial year 2019-20
The applications are being managed by local authorities and each authority is being given the flexibility to decide how the income criteria can be evidenced. Further details can be found on the ASSC website.
Charities which would have meet the criteria for both grant funding and rates relief but whose bill for 11 March had been reduced to nil by a local discretionary award will also be eligible for the RHLG fund. Properties likely to qualify include charity shops, museums, galleries, historic houses, sport charity facilities, theatres, public halls, and clubhouses, clubs and institutions. More details can be found on the Charity Tax Group website.
Business Rates Holidays – Nurseries (England only)
Nurseries in England will not have to pay business rates for the 2020/21 tax year. Properties that will benefit from the relief will be those that are:
- occupied by providers on Ofsted’s Early Years Register
- wholly or mainly used for the provision of the Early Years Foundation Stage.
No applications are required and the rate holiday will be automatic and administered by your local authority.
Support for Seafood Fishing and Seafood Processing Industry – (Scotland only)
The Scottish seafood sector is to receive a package of more than £5 million in financial support during the COVID-19 outbreak.
An initial payment of 50% of two months’ average earnings will be made to owners of all full time Scottish registered fishing vessels of 12 metres length and under.
Marine Scotland will be writing to all vessels and relevant representative Associations with more details. If you have any immediate queries you can email email@example.com.
Further clarification of the scheme is as follows:
- full time is defined as where a vessel has recorded landings of £20,000 or more. This is the same limit that has been applied in previous schemesvessels that are under 12 metres in length and were registered in Scotland on the 18 March 2020
- earnings are defined as recorded landing income from sales notes from 2019. This data is submitted to Marine Scotland by buyers
- monthly payments are based on monthly average 2019 sales income
- wrasse catching vessels will not be included in this initial scheme.
Support has also been announced for seafood processors in Scotland with shellfish and seafood processing businesses receiving immediate priority for consideration from the £10 million Scottish Seafood Business Resilience Fund. The fund is providing grants and loans to businesses suffering as a result of the shutdown of international markets and the food service industry across the UK during the COVID-19 outbreak.
Funding is aimed at meeting a businesses’ fixed costs until they are able to return to normal production. The application form for the Seafood Business Resilience Fund can be found here on the GOV.SCOT website.
1.6% Non-Domestic rates relief – (Scotland only)
From 1 April 2020, a 1.6% non-domestic rates relief will apply for all properties across Scotland (this effectively reverses the planned inflationary increase for the year). This will automatically be applied on your council tax bill.
Business Interruption Loans (CBILS) – for SME’s
The Coronavirus Business Interruption Loan Scheme (CBILS) will be delivered by the British Business Bank, allowing SMEs to access bank lending and overdrafts through more than 40 accredited lenders across the UK, with interest rates similar to current bank lending.
The government will provide lenders with a guarantee of 80% on each loan.
CBILS is available to all UK-based business with a turnover up to £45 million and will support loans of up to £5m per business. No interest will be charged for the first 12 months as government will cover the first 12 months of interest payments.
Following intervention by the Chancellor, approved lenders have been instructed to change their approach and advised that all other sources of lending do not need to be explored before a business can now access this scheme. In addition, the need for a personal guarantee has also been removed on loans under £250K.
Therefore, if you have already applied for CBILS and been turned down, our advice would be to contact your bank again.
It should be noted that the business borrower will always remain 100% liable for the debt.
There is a new scheme being worked on for larger companies with turnover between £45m and £500m and as soon as we are made aware of further details we will let you know.
More details can be found on the British Business Bank website.
Business Interruption Loans (CCFF)
The Covid Corporate Financing Facility (CCFF), which is co-ordinated by HM Treasury and Bank of England, will provide funding to all UK businesses by purchasing commercial paper of up to one-year maturity, issued by firms that make a material contribution to the UK economy. Commercial paper, also called CP, is an instrument used for obtaining short-term funding.
This scheme is aimed at businesses who are unable to meet the criteria required to qualify for the CBILS. This should help businesses across a range of sectors pay wages and suppliers, whilst they are experiencing disruption to their cash flows.
This will be administered by the Bank of England and further details can be found on the Bank of England website.
There will be an automatic deferral of VAT payments due in the period from 20 March 2020 until 30 June 2020. The deferral is available to all VAT registered UK businesses. The deferral will be automatic – you do not need to apply for it.
IMPORTANT: if you pay your VAT by Direct Debit you must contact your bank to cancel that Direct Debit to avoid the payments being taken. This needs to be done before the Direct Debit is due to be collected.
The following conditions apply:
- VAT returns must still be submitted as normal
- VAT repayments and refunds will be made as normal
- the VAT deferred must be paid by the end of the 20/21 tax year, which will be 31 March 2021, 30 April 2021, or 31 May 2021 depending on the VAT periods used by your business.
Business Insolvency Changes
Changes are being made to the UK insolvency regime to assist businesses avoid having to file for bankruptcy if they are unable to meet their debts due to the impact of COVID-19.
These include a temporary suspension of the rules that usually make it an offence for a company director to continue to trade if they know their business is unable to avoid liquidation. This will allow directors to continue to pay staff and suppliers in order to keep the business going without being personally liable.
Any business that is undergoing a rescue or restructuring process will also be protected from creditors putting them into administration and will be able to continue buying essential supplies, such as energy, raw materials or broadband.
These changes are backdated to 1 March 2020.
Renters and Landlords Protection
Under new laws, landlords will not be able to start new possession proceedings to evict tenants for at least three months.
In addition, mortgage borrowers can apply for a three-month payment holiday from their lender. This applies to both residential and buy to let mortgages, providing relief to landlords whose tenants are experiencing difficulties due to the ongoing COVID-19 situation.
It will be expected that landlords and tenants will work together to establish affordable repayment plans, taking into consideration tenants’ individual circumstances, at the end of the period.
Protection from Eviction for Commercial Tenants
Within England, there are also measures that apply to commercial tenants. No business will automatically forfeit their lease and be forced out of their premises if they miss a rental payment up until 30 June 2020. As such, commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. The government have indicated that they may extend this period if needed.
It is important to highlight that this measure is not the same as a rental holiday. Commercial tenants are being protected from eviction if they are unable to pay rent but will still be liable for their rent.
In Scotland, the notice period before a commercial lease can be terminated for non-payment of rent has been extended, as part of the Coronavirus (Scotland) Act. It requires landlords to give at least 14 weeks’ written notice to tenants before terminating a commercial lease for non-payment of rent, rather than 14 days. It applies to all commercial property leases, including those where a warning notice has already been issued and has not already expired.
As a result, landlords will effectively be prohibited from evicting tenants for non-payment of rent until July, at the earliest.
If you have not already done so, you should check your business insurance policies to see if business interruption cover for pandemics is in place.
Confirmation has been provided that government advice to avoid pubs, clubs and theatres etc. is sufficient for businesses to claim on their insurance should they have appropriate business interruption cover for pandemics. Full details can be found in our previous update.
Charity Support Package
The Chancellor has announced that UK charities will be able to access a £750 million package of support to ensure they can continue their vital work during the COVID-19 outbreak.
£360 million of the funding will come direct from government departments to support:
- hospices to help increase capacity
- St John Ambulance to support the NHS
- victims charities, including domestic abuse
- vulnerable children charities, to enable continuation of service on behalf of local authorities
- Citizens Advice to increase the number of staff.
£370 million will be available for smaller charities, including through a grant to the National Lottery Community Fund. This aims to support organisations in local communities, for example those delivering food, essential medicines and providing financial advice.
The government has also committed to match donations to the National Emergencies Trust as part of the BBC’s Big Night In fundraiser later this month, pledging a minimum of £20 million.
Government departments are now working to identify priority recipients, with the aim to be able to distribute funding in the coming weeks. The application system for the National Lottery Community Fund grant pot is expected to be operational within a similar period of time.
The Third Sector Resilience Fund (TSRF) – (Scotland only)
The Scottish Government has announced a £20m Third Sector Resilience Fund (TSRF) for charities, community groups, social enterprises and voluntary organisations.
The Fund will be delivered by Firstport, Social Investment Scotland and the Corra Foundation and will provide grants between £5,000-£100,000. In addition, there will be up to a further £5m available in fully flexible, 0% interest loans starting at £50,000.
There will also be additional specialist business advice from Just Enterprise to help grant recipients maximise the impact of the financial support.
To be eligible, interested organisations must be:
- a charity, social enterprise or voluntary organisation based in Scotland and/or primarily delivering services/activities in Scottish communities
- already delivering those products or services prior to March 2020
- and needing funding to stabilise cashflows directly as a result of the impact of COVID-19, as opposed to pre-existing financial difficulties.
The scheme is open and details can be found here on the Scottish Council for Voluntary Organisations (SCVO) website.
Arts Council England (England only)
The Arts Council England will be making £90 million available to National Portfolio Organisations (NPOs) to help alleviate the financial pressures for these organisations. The full list of NPOs can be found on the Arts Council England website.
For those organisations in the cultural sector who are not NPOs, the Arts Council England are making £50 million available, accepting applications for up to a maximum of £35,000.
In addition, the Arts Council England are making £20 million available to individuals working in the cultural sector, including artists, creative practitioners and freelancers.
More information on all of the funding can be found here on the Arts Council England website.
Support for the Heritage Sector
The National Lottery Heritage Fund has announced a £50million fund to support the heritage sector in response to the COVID-19 outbreak. It will provide grants of between £3,000 and £50,000 and is available to organisations including historic sites, industrial and maritime heritage, museums, libraries and archives, parks and gardens, landscapes and nature.
Those organisations eligible will have received funding in the past, be a current recipient of a grant from the fund or still under contract following a previous grant.
Grants will be prioritised to applications from organisations or causes where there is limited or no access to other sources of support, heritage is most at risk and where an organisation is at risk of severe financial crisis due to the COVID-19 crisis.
More details and a list of FAQs can be found on the National Lottery Heritage Fund website.
Statutory Residence Test (SRT)
With future flight and travel being severely limited, HMRC have published guidance on whether extended stays in the UK due to COVID-19 between 1 March and 1 June 2020 can be ignored for the purposes of the Statutory Residence Test (SRT).
It has been confirmed that time spent by individuals in the UK between 1 March 2020 and 1 June 2020 working on COVID-19 related activities will not count towards the residence test. The changes are temporary and only cover individuals whose skill sets are currently required.
However, this change does not apply for off-shore workers who have been in the UK longer than normal due to COVID 19.
In ‘normal’ circumstances, individuals will be automatically resident in the UK if they spend at least 183 days here in a tax year. However, there may be many who are not working and are unable to leave due to the travel restrictions. The SRT does provide for “exceptional circumstances” and the categories of individual who qualify, which include:
- an individual who is put under quarantine as a result of the virus
- an individual who is advised by a health professional or public health guidance to self-isolate in the UK because of COVID-19
- when official Government advice is not to travel from the UK as a result of COVID-19
- an individual who is not able to leave the UK because international borders are closed
- an individual who is requested to return to the UK by their employer because of COVID-19
The guidance does not cover all situations, for example if you are caring for someone self-isolating, or if you are detained overseas and fail to get enough days in the UK to remain UK tax resident. In addition, many migrants who hold a UK visa but are not UK-tax residents could find themselves spending longer in the UK than planned which could result in hefty tax bills in the following years.
If you are not ordinarily a UK taxpayer and find yourself in the UK for longer than you normally would, or are a UK taxpayer and find yourself unable to return to the UK, we would urge you to get in touch to review your income tax position within the UK.
Loans, Credit Card and Overdraft Relief
The Financial Conduct Authority (FCA) has confirmed that banks and lenders should now offer a package of temporary measures for those individuals affected by financial problems due to COVID-19. The measures introduced include:
- the offer of a temporary payment freeze on loans and credit cards for up to three months
- allowing customers who already have an arranged overdraft on their main personal current account, up to £500 to be charged at 0% interest for three months
- individuals who have a 0% credit card deal and miss a payment will not be penalised and get to keep the 0% deal.
Banks have also been asked to ensure that should consumers make use any of these arrangements, their credit files will not be affected.
If you are struggling with any loans or credit cards etc. that may be covered by these measures please speak to your bank. Banks will not automatically apply the measures to all customers.
It should be emphasised that the measures are temporary, are a payment holiday only, will not be interest free and are not a cancellation of any monies owed. You will still be liable for any borrowings and the interest on those borrowings, which may mean paying slightly more in the long term. If you are struggling these options will offer some relief but if you are able to continue make payments as normal, you should continue to do so.
Provision of food takeaway service
To support the food industry and help provide meals for people who need to self-isolate, the government has relaxed planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.
School Closures/Key Workers
Schools are only open to vulnerable children and those with a parent identified as being critical to the Covid-19 response ie. a key worker.
If your work or an employee’s work is critical to the COVID-19 response, and the child or children cannot be kept at home then they will be prioritised for education provision. Guidance outlining the definition of a ‘Key Worker’ can be found on the Department of Education’s webpage.
It is worth noting that your employees may not fall into the key worker category, but they may have partners who do. Therefore, your employees may still be able to access schools or nurseries which could enable them to continue to work until further guidance is provided.
HMRC and Scottish Government Helplines
HMRC has a set up helplines providing practical help and advice to support businesses and self-employed people concerned about not being able to pay their tax as a result of COVID-19.
The main helpline number is 0800 0159 559.
Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.
The helpline will not be available on Bank Holidays.
To increase capacity there is now an additional dedicated phone number 0800 024 1222.
Opening hours for the helpline will be 8am to 4pm Monday to Friday only.
The Scottish business helpline specific to COVID-19 is based at the existing Scottish Enterprise call centre in Clydebank.
The business helpline number is 0300 303 0660.
Opening hours are Monday to Friday 8.30am to 5.30pm.
Guidance for employees, employers and businesses
Government guidance on healthcare advice for employers and support for businesses can be found here on the GOV.UK website.
Those Falling Outside Government Measures
In spite of the financial and economic support being the most far-reaching in living memory, we are very aware that there are businesses and individuals who still fall outside the scope of these measures.
We have contacted local MPs, MSPs, councillors, with key business federations, financial institutions and organisations on both sides of the border highlighting those areas that require further clarification and individuals that require further support. An outline of our areas of concern can be found in our previous update.
We have been encouraged that the feedback from this communication has been very supportive. We hope that our efforts combined with those of others in applying consistent and high-level pressure will result in measures being extended to assist those that may currently run a serious risk of being left behind.
We do appreciate that the range and breadth of the financial support on offer is fast moving and can be confusing. We continue to encourage you to contact us if you need support or would like a query or question answered. Our phone numbers and email addresses remain as they were. We are open for business and happy to help.